Initial budget cuts clear first round

After four days of debate, lawmakers gave first-round approval Feb. 3 to a bill that would make cuts to the state’s budget for the current fiscal year.

LB22, introduced by Norfolk Sen. Jim Scheer at the request of Gov. Pete Ricketts, is part of the governor’s expedited adjustments proposed for the state budget ending June 30, 2017. The regular budget process for setting spending for the next two fiscal years will be taken up separately later in the session.

The Appropriations Committee amendment, adopted 46-0, became the bill. Sen. John Stinner of Gering, chairperson of the committee, said the amendment resulted from a thoughtful consideration of the governor’s proposal and contains adjustments based on input from state agencies provided in public hearings.

Much of the debate focused on the amended bill’s provisions to re-appropriate unspent agency funds. With minor exceptions, the bill would re-appropriate funds to the general fund that were held back by the governor at a rate of 1 percent per quarter from agency budget allotments during the current fiscal year.

During debate Feb. 1, Omaha Sen. Bob Krist offered a motion to return the bill to the Appropriations Committee. Krist expressed concern with the governor’s decision to hold back those budgeted allotments, in what he said amounted to a 4 percent, across-the-board cut in what the Legislature appropriated to state agencies in the last budget cycle.

Krist urged the committee to reconsider accepting that proposal.

“This is not the way to do business,” he said. “We don’t have to slash and burn in the first 19 days … of this legislative session. We can carefully and judiciously walk through this process.”

Omaha Sen. Burke Harr also raised concerns, saying agencies should be able to save the funds appropriated to them for use at a later time. Re-appropriating unspent funds would disincentivize agencies from frugally managing their budgets, he said.

“We’re taking money that is being saved for a rainy day … and we’re stealing it,” Harr said.

Sen. Adam Morfeld of Lincoln said Ricketts does not have the authority to unilaterally alter the budget passed by the Legislature by withholding those allocations.

“A budget is more than just a direct allocation to the governor’s office to do as he sees fit,” Morfeld said. “The governor, by withholding funds from agencies, has altered the intent of the Legislature.”

Omaha Sen. Robert Hilkemann said the governor’s actions, and in turn those of the Appropriations Committee, are the responsible approach to the looming revenue shortfall. Re-appropriating unspent funds now will make future budget cuts less painful, he said.

“I consider the governor as the CEO of the state of Nebraska,” Hilkemann said. “It is the responsible thing to start cutting back spending and that’s what our governor did.”

Sen. Kate Bolz of Lincoln, vice chairperson of the Appropriations Committee, said the Legislature acted independently and used its authority to alter the governor’s recommendations in important ways.

“Part of our goal here is to make cuts that are easier — when we can make them — rather than to make more difficult decisions down the line,” she said.

Krist withdrew his motion Feb. 3. Following two unsuccessful attempts to bracket the bill by Omaha Sen. Ernie Chambers, lawmakers voted 46-1 to advance LB22 to select file.