State lawmakers again face a difficult budget year.
Last year, state legislators worked to close a $1 billion revenue shortfall to balance the two-year $8.9 billion state budget.
Revenues continue to sag.
This year, state legislators face a projected $200 million revenue shortfall.
Appropriations Committee chair, Sen. John Stinner of Gering, anticipates another tough battle to pass a balanced budget.
“I think it’s going to be very difficult, making those choices,” Stinner tells Nebraska Radio Network. “Now, we still have the priorities, we still have property taxes as a priority. We still have prisons and justice reinvestment as a priority. We still have K through 12 as a priority. We’ll work around those priorities and see just where we come out.”
Much depends on what budget cuts Gov. Pete Ricketts proposes. Ricketts is scheduled to deliver his State of the State address January 10th in which he will outline his proposals to trim the state budget. Stinner expects the governor to call for across-the-board cuts to most state agencies, likely exempting school funding as well as money for the Department of Correctional Services which is working to ease prison crowding and avert a judicial order to release prisoners.
“Then, we’ll have some strategic cuts. We’ll have some cash transfers. And then it becomes a matter of how much you want to use that Rainy Day Fund,” Stinner says.
A final revenue projection will be issued by the Nebraska Economic Forecasting Advisory Board in February. Stinner doesn’t expect much change, if any, though he points out state revenue seemed to pick up in December, signaling the state economy might be picking up.
Though a slumping farm economy gets much of the blame for the fall-off of state revenue, Stinner believes other factors play a role. He speculates Nebraska’s aging population is spending less and its younger residents are putting off big-ticket items, such as buying a house. Also, Stinner says the state needs to adjust to an online economy and find a way to capture sales tax receipts from Internet sales.
AUDIO: Brent Martin reports [:50]