This has been a big week for the Legislature.
The Appropriations Committee introduced the budget package to the floor last Friday and debate has already began this week. Over the course of the next couple weeks, the Legislature will continue to debate the budget package, which determines spending for Nebraska for the next full biennial (two-year) budget starting in July 2017 and ending June of 2019.
There will be a lot of debate over the state’s spending, with some major priorities being discussed. Property taxes and the Property Tax Credit Cash Fund will be a major source of contention as the Legislature seeks to provide comprehensive property tax relief to Nebraskans. The Property Tax Credit Cash Fund is the second largest increase in the budget at $40 million over the two-year biennium.
Another big item will be the Tax Equity and Educational Opportunities Support Act (TEEOSA) funding for our public schools. TEEOSA includes the funding formula used to allocate state aid dollars to public school districts. TEEOSA is the largest increasing item in the budget at $62 million over the next biennial budgeting period.
The third major item in the budget is going to be Justice Reinvestment Act Funding. The Justice Reinvestment Act was a culmination of policy changes implemented to address Nebraska’s prison overcrowding issues. Increases for the Justice Reinvestment Act will increase by $11 million as more prisoners become eligible.
As prison issues continue to present a significant challenge for the state, there will be an increased focus on Correctional Services and an increase in funding for staffing at our state’s prisons. The budget recommendation includes an $8 million increase in the proposed biennial budget. This does not include the Governor’s and Committee’s budget proposal for staffing level increases to address the shortage at the Department of Corrections.
Additionally, the Department of Health and Human Services’ (DHHS) provider rates will be another item of contention as the Legislature debates budgetary issues. Behavioral health, developmental disability, and Medicaid will all be debated. These rates are typically raised each year, but in order to shore up the budget deficit, the Committee has proposed a net 0 increase in provider rates, with an exception of a 3% reduction for hospitals and physicians.
As the Legislature debates its priorities and accounts for all incoming bills which will affect the budget, there will be debate on how much we pull from the Rainy Day Fund. The current proposal includes a $173 million transfer to the General Fund to shore up the deficit and a $75 million transfer to the Department of Corrections for its Reception and Treatment Center project. This would bring our reserve down to $370 million. But that number will likely change as yesterday’s Forecasting Board reported a net decrease of nearly $50 million after April tax receipts.
Outside of the budget, the Legislature passed a good number of bills on Monday, sending them to the Governor’s desk for his signature to officially become law. Three of my bills, LB101, LB151 & LB222 were among those passed by the Legislature.
LB101 makes the bidding process for the State’s main administrative arm, the Department of Administrative Services, more competitive by putting limitations on contract renewals and extensions. It was amended into LB151.
LB151 would add oversight measures to state agencies during the auditing process by empowering the State Auditor to conduct post-audit reviews. As mentioned already, it has LB101 amended into it along with three more bills appropriate to the theme of responsible state agency management.
LB222 also follows along the theme of responsible agency management. It has been one of my most anticipated bills of the year. It restructures the Nebraska Tourism Commission into an 11-district system based on lodging revenues. It would implement oversight measures by requiring the adoption of formal rules, regulations, and would clarify its innovative grant program to promote the tourism industry in Nebraska.
Ever since first arriving to the Legislature in 2015, I have worked hard implementing oversight measures into the Commission to save taxpayer dollars. Many of the issues I witnessed came to a head when its Director was fired last year for misuse of state funds and unethical management behaviors. LB222 is the culmination of those efforts to realign the Commission to its mission and purpose.
On Tuesday, the Legislature debated an amendment I introduced – AM998 – to one of Senator Smith’s bills, LB233. AM998 is a part of my efforts to shore up the state’s biennial budget. My amendment is an attempt to put on hold tax credit programs for two years to help us taper down the $173 million proposal to draw from the Rainy Day Fund. The Legislature is working on some changes with the Governor on my amendment. We hope to bring the state an additional $35.4 million.
One of my major concerns lies in balancing the budget for the next biennium. Using available opportunities in 2017 and 2018 will achieve that end. Neither of these options are favorable. But this is not “business as usual.” Stay tuned. There will be a lot of political theater in the coming days.
As always, I remain open to your feedback on how I may address the issues that mean most to you. Please do not hesitate to contact my office with any questions you may have. Thank you to those who have taken the time to express their views on various issues. My contact information is located on the right hand side of this webpage.