LINCOLN, Neb.—Nebraska Gov. Dave Heineman signed a two-year, nearly $7 billion state budget Tuesday without vetoing anything.
The spending plan closely mirrors what Heineman asked for in the first place. It relies heavily on federal stimulus dollars and the state’s rainy-day fund to balance the budget. State lawmakers approved the spending plan last week.
State spending will increase an average of 1 percent each of the next two years, well below the historical average of about 7 percent.
Sen. LaVon Heideman of Elk Creek, chairman of the Legislature’s budget-writing Appropriations Committee, said Heineman’s lack of vetoes—which is unusual—shows cooperation and a “responsible budget.
But Heineman’s blanket approval came with a warning: “Given that Nebraska’s revenues are declining, I would ask that you carefully review each remaining appropriations bill,” the governor said in a letter to senators. “Are there appropriations bills that can wait until next year when we will have a more clear picture of the impact of the national economic slowdown on Nebraska’s economy?”
Heideman said he’d set aside his own bill (LB112), which would offer a tax break to health care providers with student loans who work in places where there’s a shortage of services.
“I’m not going to bring it because I don’t think it shows leadership on my part,” Heideman said.
Speaker Mike Flood of Norfolk, who sets the legislative agenda, said if senators agree to set aside upcoming bills with a fiscal impact, he’ll put them on the schedule next year without requiring a prioritization. Senators have a limited number of priority bills, which move their measure up on the legislative calendar.
“I think all senators are going to take a step back and evaluate their bills,” said Sen. Heath Mello of Omaha.
He’s deciding what to do with his bill (LB633) which would provide money for neighborhood associations to encourage community development.
Nebraska’s cut of the $787 billion federal stimulus package designed to buoy the economy is about $1.5 billion. Lawmakers were able to use about half of it to help with the state budget, but they have less control over how the other half is spent.
Without about $515 million in federal stimulus dollars that will mainly go to K-12 education and Medicaid, program cuts were likely.
But even with the stimulus money, many state agencies will have to reduce costs and pare programs. The State Patrol, for example, will leave seven vacant trooper positions open, and the Game and Parks Commission plans to do less maintenance at some state parks.
The budget does, however, retain some big-ticket items, including a $230 million property tax credit program over the next two years. The fund, established two years ago, gives lump sums to local governments, which provides tax credits to property owners.
Besides federal-stimulus dollars, the budget also leans on the state’s record cash reserve, filled with money lawmakers saved when revenues were strong. Lawmakers plan on taking more than $254 million out of the reserve, which is less than half the total amount in the account.
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