Senators will get a first look Friday at the final recommendation on an $8.8 billion state budget that raised spending only a half-percent for the remainder of this fiscal year and next.
It was a good session for the Legislature's Appropriations Committee, said Chairman John Stinner of Gering, after the committee advanced three bills Thursday that senators will begin to debate Tuesday.
"I think we turned out a pretty good proposal. I think it's a fair and balanced proposal," he said. "I'm pretty proud of the committee, frankly."
A number of items in the budget are bound to lead to extended debate — cuts to higher education that some senators might want to increase or decrease, and an anti-abortion provision from Gov. Pete Ricketts related to federal Title X funding that some on the committee argued would hurt access to health care and family-planning services for women and men.
Sen. Steve Halloran of Hastings predicted there would be challenges during the budget debate next week to the reduction in cuts to the University of Nebraska. He asked where the money needed to balance the budget comes from if not, in part, from the university.
"Does it come from Health and Human Services that provide a lot of the services to the most-vulnerable people in the state?" he said. "Where does it come from?"
Nobody on the committee got 100 percent of what they wanted by any stretch of the imagination, Stinner said, but the nine senators turned out a good budget.
Because of an uptick in state tax collections predicted by the Nebraska Economic Forecasting Advisory Board, the committee was able to reduce cuts that had been recommended by Ricketts to the NU and state agencies, Stinner said.
He wasn't sure in January, he said, how much the rainy-day fund might be depleted by the end of the process. But with $296 million predicted to be left by the end of the 2019 fiscal year, it's in better shape than he thought it would be. The cash reserve was at $680.6 million in June 2017.
"That will be our big challenge as we move forward, rebuilding this cash reserve," he said.
That, he said, would mean adding about $450 million for the next business cycle, that cycle being based on the natural rise and fall of economic growth that occurs over time.
A number of challenges to doing that lie ahead, with deferred maintenance of state buildings needing about $600 million to $700 million, costs to address prison crowding and understaffing, tax reform, and the need to address Medicaid and provider rates.
The budget amounts presume a bill (LB1090), which advanced from first-round debate Thursday on a 38-0 vote, will offset income that could be gained by the federal Tax Cuts and Jobs Act enacted in December.
Stinner said during its deliberations, the committee tried to take into account the cumulative effects on state agencies of budget cuts over two years.
"We shrunk the size of government," he said, with 500 fewer people and 1,500 vacancies and just enough money to cover existing salaries and health insurance costs. Much of the workforce reduction is the result of a hiring freeze by Ricketts, put into effect in October 2016.
The main budget bill (LB944) advanced with a unanimous 9-0 committee vote. Two other bills (LB945 and LB946) that are focused on the cash reserve and funding transfers had 8-1 votes, with Sen. John Kuehn of Heartwell opposed to both. Kuehn was not available Thursday to discuss his opposition to those bills.