Dire predictions occur as legislators continue to wrangle over the $8.9 billion dollar state budget.
Sen. Anna Wishart of Lincoln warns colleagues against a deadlock which could trigger a government shutdown.
“And that means no heating, no lighting, no money to Corrections,” Wishart cautions during legislative floor debate.
Legislators began the session facing a projected billion dollar state tax revenue shortfall. Gov. Pete Ricketts submitted a budget which proposed lower spending, budget cuts, sweeping some cash reserve funds, and a transfer from the so-called rainy day fund to balance the upcoming two-year state budget. The Appropriations Committee revised the proposal and submitted it to the Unicameral which advanced the biennium budget.
In the meantime, the Nebraska Economic Forecasting Advisory Board has revised downward its projection for future state tax revenue, now predicting it will fall another $55 million over the next three years.
Members of the Appropriations Committee adjusted its recommendation by proposing between $10-and-12 million in additional budget cuts as well as a reduction in the required minimum budget reserve. Lawmakers have advanced its recommendation to lower the reserve from 3% to 2 ½%, which is estimated to save approximately $42 million.
Not without disagreement, though.
A number of lawmakers take to the floor to propose deeper cuts, rather than a reduction in the budget reserve. They argue the budget is built on too rosy an economic projection and if revenue continues to lag and drops below that new minimum threshold, the legislature will be forced to return for a special session to revise the budget.
Sen. Paul Schumacher of Columbus, who has been warning about the state’s fiscal outlook, calls the debate the best he’s heard all year.
“It almost appeared as though it was the awakening, particularly among the freshman class who now I think begin to see the tip of the iceberg of what you’re going to have to deal with,” according to Schumacher.
AUDIO: Brent Martin reports [:50]