HIGHLIGHTS OF THE 2009 SPECIAL SESSION

The First Special Session of 2009 wrapped up its work in 12 Legislative days. In that time, many difficult decisions had to be made in order to make up for our revenue shortfall.

Here are the highlights leading up to the introduction and passage of the budget bills.

First, the General Fund financial status had deteriorated significantly since the end of the 2009 Regular Session that ended in June. At the end of the current biennium, the current estimates showed a projected balance at the end of Fiscal Year (FY) 2010-11 that was $334 million below the minimum reserve and growing to $1.2 billion below the minimum reserve by 2012.

Revenue is roughly 16% below what would be experienced in an average two year period.

The Appropriations Committee proposal called for a total of $337 million of budget actions over the two year biennium of which 20% ($66.8 million) is from fund transfers and 80% ($270.2 million) from reducing new appropriations and reducing reappropriated balance carried over forward from the prior biennium.

While there was a significant shortfall projected for this biennium, the current cash position plus the balance retained in the Cash Reserve Fund and proposed budget reductions provided adequate cash flow to pay the state’s bills over the next two years.

Of the spending cuts over the two year period, $56.7 million comes from the across the board budget cuts. In general these across the board cuts were 2.5% for FY2009-10 and 5% for FY2010-11.

Certain areas were excluded in the cuts in one or both years. Those are a)TEEOSA school aid; b) Special Education; c) Medicaid; d) Kids Connection; e) Homestead Exemption; f) Behavioral Health Aid; g) Developmental Disability Aid; h) Health Aid; i) Aid to Aging Programs; j) Health and Human Services care and treatment facilities; k) State Patrol; l) Corrections; m) Juvenile Services Aid; n) HHS protection and safety; and o) State Emergency Fund and Public Safety Communications.
The across the board cut for the Court System was 1.5% (FY09-10) and 3% (FY10-11). Cuts to the University and State Colleges will see cuts of 1.8% this year and 3.4% in 2010-11.

Commodities checkoffs were spared any cuts – about $1.2 million. These funds have been accumulated from farmers to be used for certain expenditures – not to balance General Funds.

Also spared was about $330,000 from the Nebraska Brand Committee.

Changes made in the state aid formula allowed aid to remain flat next year instead of increasing. This was a $32 million savings to the state.

Prior to the debate on the budget bills, Senator LaVon Heidemann, Chairman of the Appropriations Committee held a detailed briefing for all Senators and their Staffs explaining every item proposed in the Committee’s package of budget bills. Many questions were raised and answered. Everyone was well informed when the bills were discussed on the legislative floor.

Making the decisions on solving the budget deficit was not easy and everyone in state government shared in the pain – from the largest agencies to the smallest, and including the Legislature. We are definitely moving towards a more efficient government…trying to do the same job with less. It’s a delicate balance.