December 22, 2014

Specter of budget shortfall might not be so scary (AUDIO)

A projected budget shortfall for the next two years might not be as ominous as it appears.

The Legislative Fiscal Office projects a shortfall greater than $600 million over the next two-year budget cycle.

State Tax Commissioner Doug Ewald says the projection is based on a couple of assumption he doesn’t buy: that spending will grow 4 1/2% and that tax receipts will not see much growth.

“I think there’s probably a little bit of room on both those to ratchet them down to a more realistic state of the world right now,” according to Ewald. “We’re not going to see big increases in tax receipts, but also we’re not going to see big spending increases on that side of the table, either.”

Ewald expects Gov. Dave Heineman to submit a budget to the legislature next year that will keep spending in check. Ewald also believes the state will continue to enjoy good revenue growth.

Nebraska just concluded its fiscal year with enough of an uptick to transfer $105 million into the cash reserve fund.

PDF of Legislative Fiscal Office budget projection

AUDIO: Brent Martin reports [:40]