Last week, the Appropriations Committee advanced the mainline budget bills and issued the biennial budget report for fiscal year 2023-24 and fiscal year 2024-25. The state’s fiscal year begins on July 1 and ends on June 30 each year. The report reflects the current projected budget line items for the current fiscal year and the projected fiscal year numbers for each year through June 30, 2027. These projections take into consideration the most recent revenue projects released by the economic forecasting board and include the spending projections from bills included in the committee’s budget.

The budget bills are broken down into three bills: LB814, LB818, and LB813. LB814 outlines the Legislature’s mainline budget and capital funding. LB818 makes transfers from the Cash Reserve Fund, and LB813 deals with adjustments between individual funds. All three bills were debated on General File and moved on to Select File last week. These bills will continue to be debated over the next two weeks and will be the primary focus of the Legislature until these bills are passed. By rule, the budget bills must be passed by Day 80 or May 18.

There are several large projects funded in LB814, including $574 million to build the Perkins County Canal, $1 billion to the Education Future Fund, and the balance of the projected funding costs to build a new $350 million prison. There are some smaller projects with given funding. I am happy to report that LB814 allocates $10 million in matching funds to rebuild the former State 4-H Camp near Halsey and $20 million in funding for both rural workforce housing and middle-income workforce housing.

After line-item budget appropriations and any other appropriations bills passed by the Unicameral, the remainder of the state’s net revenues will go towards funding the Revenue Committee’s tax proposals to provide property and income tax relief. With just the proposed biennium budget items, the remaining net revenue for the next two years will be $714,929,728. In their current form, the proposed property and income tax relief packages are estimated to reduce state revenues by approximately $870 million over the next two years. Since these proposals would outstrip revenues, it is anticipated that some of the tax relief provisions may need to be pared back. Alternatively, the Governor could utilize his line-item veto authority to reduce spending measures. However, the current budget is already very conservative. As currently advanced, LB814 will only increase state General Fund spending by an average of 2.3% over the next two years, which is much lower than the current level of inflation.

As we continue the budget and tax discussions this week, I want you to know that I believe that our strong cash position is a result of “over” taxing those who pay income and sales taxes to the state. As a result, the Legislature should primarily focus on giving these funds back to those who paid them to reduce this surplus. Many are hopeful that – even though the state does not assess property taxes – it can help reduce them by properly funding our public schools and therefore reducing the local reliance on property taxes. I also believe that one-time expenditures focused on our state’s growth are also a wise use of funds. By making smart investments, we can help grow the tax base to ensure stable revenues in the future.

With the limited number of days remaining this session, many Senators are pushing to get their bills scheduled and doing all they can to find a path forward for their priorities. It is important to remember that if your bill does not get defeated along the way, it will carry over to next year’s session.

In closing, I want to thank our firefighters and first responders for their bravery and sacrifice as they fight new wildfires in our area. I am glad that the newest fire in the Nebraska National Forest at Halsey has been contained. Hopefully, the much-needed rainfall in parts of the District this past week will help green up the Sandhills and give our firefighters a break.

I look forward to hearing from constituents about issues impacting you. Please feel free to reach out to me at mjacobson@leg.ne.gov or 402-471-2729. My door is always open!