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Political wrangling over the state’s biennial budget began in the Nebraska Legislature last week. Some Senators like to say that we don’t have a revenue problem. Actually, we do! There simply isn’t going to be enough of it to go around. Revenues will likely go down or stay similar to last year. Therefore, increases in the biennial budget can no longer be justified. Budgetary cuts must be made this year. Unfortunately, many of the Senators who comprise our state’s Legislature do not have the guts to make these necessary budgetary cuts.
The Appropriations Committee’s current budget proposal assumes a five percent revenue increase this year. I believe this is a faulty assumption to make. Because revenues will likely be down or be similar to last year, I believe the budget should have been prepared on the basis of actual numbers instead of projected income, which is really nothing more than a speculative guess. Therefore, I introduced an amendment to a budget bill which would have replaced the current budget proposal with last year’s budgetary numbers with an exception made for payment increases for state employees and health insurance increases, which have already been agreed upon through collective bargaining. My amendment, AM 1288, lost by a vote of 19-10-19. This means that 19 Senators voted for the amendment; 10 Senators voted against it; and 19 Senators voted “Present – Not Voting.” The amendment needed 25 “Yes” votes or what we call “green” votes to pass.
In an effort to increase revenues for the State, Sen. Watermeier had introduced LB 44 back in January of this year. LB 44 would impose a state sales tax on Internet sales. LB 44 was debated on Select File on Thursday with no vote ever being taken on the bill. LB 44 is a very controversial bill.
LB 44 puts lawmakers, like me, into a conundrum. If the Appropriations Committee’s budget is to become law, we would need the extra income collected through Internet sales in order to balance the budget and to make ends meet. However, the State’s Attorney’s General office has already declared the bill to be unconstitutional and the Governor has vowed to veto the bill should it ever reach his desk. Complicating matters even further is the fact that my bill, LB 601, would direct any revenues collected through an Internet sales tax to the Property Tax Cash Credit Fund. Therefore, I believe the only real solution to our State’s budgetary problems is to cut spending now!
If our State Senators do not make the necessary budgetary cuts they need to make now, we may suffer a greater budgetary shortfall than we experienced last year. Last year, we fell $900 million short of what we needed to meet the demands of the budget. Consequently, I have told the members of the Legislature from the legislative floor that if we do not make these necessary budgetary cuts now, we will likely be called back for a special session of the Legislature sometime in the autumn months in order to make these necessary cuts then. The issue of budgetary cuts is no longer a question of, “should we?”; instead, it is a question of, “when will we?”
The current budgetary crisis facing the Nebraska State Legislature reminds me of what former President Ronald Reagan wrote in an Opinion article in the New York Times on February 18, 1993: “The problem is not that people are taxed too little; the problem is that government spends too much.”