Legislature passes budget

Lawmakers approved a state budget on final reading May 11 that will result in general fund appropriations totaling $7 billion during the next biennium.

General funds expended in the two-year budget will increase an average of 2.6 percent per year, while revenues are expected to increase 3.9 percent. The budget has an ending balance of $212.3 million, which is $17.9 million greater than the 3 percent minimum reserve.

Lawmakers began the year with a $985.5 million projected shortfall based on spending projections and revenue forecasts. Significant spending reductions made in the budget include a $67.7 million reduction in agency operations, $29.3 million less for health and human services provider rates and $19.8 million less for public assistance. The budget also takes into account LB383, which eliminated state aid programs to cities, counties and natural resources districts, for a savings of $44 million.

Medicaid and state aid to schools required additional state funds to make up for lost stimulus funds received last biennium. The proposed budget increases Medicaid appropriations by $110.5 million and $140.8 million over the next biennium from fiscal year 2010-11 funding levels. Likewise, state funds appropriated for state aid to schools will increase by $10.7 million and $67.9 million from the current fiscal year, although the total appropriation still will be $200 million less than the combined state and federal funds for FY2010-11.

Other appropriation increases include $20 million for the homestead exemption program and $18.5 million for employee salary increases, which generally are scheduled to take place in FY2012-13.

The budget package comprises nine bills.

LB373 provides deficit appropriations for the current fiscal year. Adjustments in LB373 include $27 million in savings through a reduction in the FY2010-11 appropriation. The bill was passed 41-0.

LB374, the mainline budget bill, provides the vast majority of appropriations in the budget. It passed 43-0.

LB375, which provides for the $12,000 annual salaries of Nebraska’s 49 state senators, was passed on a 43-0 vote.

LB376 appropriates funds for salaries of constitutional officers. The bill also includes funding for a new district court judge in Lancaster County. It passed 43-0.

LB377 provides $28.6 million in general funds for new and existing capital construction projects, ranging from security system upgrades for the state Department of Corrections to radio tower and network equipment costs associated with the Nebraska Public Safety Communication System. The bill also includes a $25 million appropriation from the Nebraska Capital Construction Fund to the University of Nebraska to finance the renovation of the 4-H Building and construction of the Food, Fuel and Water Research Building. Both projects are part of the Nebraska Innovation Campus.

Lawmakers voted 42-1 to approve LB377.

LB378 provides a number of fund transfers, including:

  • $220 million from the general fund to the Property Tax Credit Cash Fund;
  • $25 million from the general fund to the Nebraska Capital Construction Fund;
  • $6.3 million from the general fund to the Ethanol Production Incentive Cash Fund;
  • $5.4 million from the general fund to the Water Resources Cash Fund;
  • $970,000 from the Tobacco Control and Prevention Cash Fund to the Health and Human Services Cash Fund; and
  • $470,000 from the Uniform Commercial Cash Fund to the Election Administration Fund.

LB378 was passed 43-0.

LB379, a bill transferring funds from the Cash Reserve Fund, originally called for transfers of $260 million to the general fund. As amended during general file debate, this amount was reduced to $105 million. The state’s cash reserve will enter FY2013-14 with a balance of $299 million.

Senators voted 43-0 to approve LB379.

LB380 addresses depreciation charges assessed to state agencies based on a percentage of capital construction costs. The depreciation surcharge was suspended for FY2009-10 and FY2010-11 and was scheduled to be reinstated at a 1 percent rate beginning in FY2011-12. LB380, which eliminates the surcharge, was approved 44-0.

Lawmakers also considered LB585, introduced by the Business and Labor Committee. The bill approves $2.5 million in tort claims, $382,000 in workers’ compensation claims and $222,000 in miscellaneous claims against the state. LB585 also includes $1 million in write-offs for FY2010-11.

LB585 passed on final reading 43-0.

The budget bills were sent to the governor, who has five days, excluding Sunday, to consider the bills.

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