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The Legislature has jumped into a full 90-day session that will last until June 6th. Committee hearings have commenced in nearly every committee, and they will continue until March 28th. Full-day floor debate will begin the following week on April 2nd, and extended floor debate will begin on April 29th.
At the beginning of session, I was honored to be re-elected by my peers as Chair of the Appropriations Committee, which is a position I also held during the previous biennium. As Chair, my major focus is fulfilling the only requirement we have as a Legislature, which is to pass a fair and balanced budget subsequent to the Governor’s recommendations. Over the past few weeks, the Appropriations Committee has been reviewing the Governor’s recommendations and evaluating each agency’s budget requests.
Nebraska passes budgets each biennium, meaning that a proposed budget will fund the state for two consecutive fiscal years, each beginning on the first day of July and ending on the last day of June. These budgets are proposed, debated and passed in odd-numbered years, such as this year.
On the 15th of July prior to a long session, the Department of Administrative Services (DAS) sends forms to each state agency to request funding for the next budget. These forms are returned to the Department of Administrative Services to be forwarded to the Budget Office and the Fiscal Office by September 15th.
The fiscal office staff then review each agency’s requests. The DAS will also do its own analysis of the requests for the Governor, who proposes his own budget. The fiscal office then works with the Appropriations Committee during meetings held in January and February to understand all of the state agencies’ requests. The committee may create their own budget or alter the Governor’s suggestions.
Just like any household, it is important for legislators to know how much money they have to spend. This is where the Economic Forecasting Board comes in. This board projects how much revenue the state will receive. Their meeting on October 26th of last year projected revenue for the remainder of FY 2018-19, as well as FY 2019-20 and FY 2020-21. The board meets again on February 28th.
With those estimations, the Committee creates a “Preliminary Report” which combines those estimates with the agency requests. This report is used as a basis for each Appropriations hearing. Every Nebraska agency will get an opportunity to come before the Committee and testify in explanation of their funding request. Constituents are also given the opportunity to testify at these hearings. After all the hearings are complete, the Committee must meet a deadline (the 70th legislative day) to pass a final recommendation in the form of multiple bills to General File (the first stage of debate for the entire legislative body). Otherwise, the Legislature is required to consider the Governor’s suggested budget instead
The Legislature must pass the appropriations bills by the deadline (legislative day 80). Since nearly every appropriations budget bill contains an Emergency Clause, the bill must pass with 33 votes. An Emergency Clause activates a bill earlier than the default date, and that requires a higher threshold of approval.
After the Legislature passes a budget, the bills are presented to the Governor to sign. The Governor can veto the whole or parts of the bills, or he could choose to sign it and make it law. If vetoed, the Legislature can either override the Governor’s veto or amend the bills to fit the Governor’s requests. Once signed by the Governor, the process is complete.
Actual tax receipts from October-January are $80 million below the current forecast. The Forecasting Board will meet again on February 28th to revise its revenue projections for fiscal years 2019-21, which align with the upcoming biennial budget. Based on October-January tax receipts and expected revenue projections for February, I am not optimistic on the outlook.
In addition to the current and expected budget shortfalls, there are a number of signature budget challenges facing the Committee. Medicaid Expansion will be a significant cost item, costing an estimated $63 million a biennium. The Committee also expects to have some significant challenges in funding K-12 education and higher education. There is a significant challenge in the funding of the 384-bed maximum security prison under Corrections. Also, provider rates in numerous segments of the healthcare sector such as nursing homes and mental and behavioral health will present some significant budgetary challenges. Saving money for Nebraska’s Rainy Day Fund is also a high priority for me, as the State has drawn down its reserves and faces a potential economic downturn in the near future.
I am always open to your feedback about how to address the issues that mean the most to you. You are more than welcome to contact my office with any questions you may have, and I thank everybody who has already taken the time to express their views on various issues. Below, you can find all my contact information:
Senator John P. Stinner
District 48, State Capitol
PO Box 94604
Lincoln, NE 68209
Telephone: (402) 471-2802