Session Review: Appropriations

June 2, 2011March 11, 2013 admin

After starting the calendar year with a $987 million budget shortfall, lawmakers balanced the budget in large part due to the work of the Appropriations Committee.

The approved state budget 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 2.7 percent per year. The budget has a projected ending balance of $215.4 million, which is $3.3 million greater than the required 3 percent minimum reserve.

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.

Medicaid and state aid to schools required additional state funds to make up for expenses covered by federal stimulus funds received last biennium. The proposed budget increased 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 Appropriations Committee budget package comprised nine bills.

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

LB374, the mainline budget bill, provides the vast majority of appropriations for state operations and state aid. It passed 43-0.

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

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

LB377, passed 42-1, provides $28.6 million in general funds for new and existing capital construction projects. 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.

LB378, passed 43-0, 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.

LB379, approved 43-0, transfers $105 million from the Cash Reserve Fund to the general fund. Under the bill, the state’s cash reserve is projected to enter FY2013-14 with a balance of $299 million.

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.

A bill that was not part of the budget package but resulted in general fund savings was LB464, introduced by Lincoln Sen. Kathy Campbell at the request of the governor and passed 42-2. Under the bill, the state Department of Health and Human Services will no longer be required to set child care reimbursement rates at a level between the 60th and 75th percentile of a market survey. Instead, the bill lowers to the 50th percentile the minimum rate that HHS may pay for the next two years, beginning July 1, 2011. In addition, the rate paid to child-care providers may be no lower than the rate paid in the preceding fiscal year.

The state would provide funding for a drug rehabilitation program serving mothers under a bill that was held in committee. LB325, introduced by Omaha Sen. Gwen Howard, would appropriate $250,000 annually in the next biennium to the Behavioral Health Aid program for allocation to Heartland Family Service’s Family Works program.