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The Nebraska revenue forecasting board has not been especially kind in the past year, offering up and down projections for tax collections that nine senators had to then use to shape state spending.

But the Appropriations Committee got it crafted, bound it with a cosmic orange cover and on Thursday delivered a $9.3 billion budget for study by senators on their four-day weekend beginning Friday. Next week, perhaps as early as Wednesday, they will debate the seven bills that make up that budget.

"I think it's a good budget. It's a fair budget. It's a responsible budget," said Appropriations Chairman John Stinner.

It's also fairly meager, he said, given that if you don't include Medicaid expansion when adding up spending, it's a 2.5% increase in spending. The increase is 3% with Medicaid expansion funding, approved by voters in 2018. 

Gov. Pete Ricketts signaled his displeasure that the budget shifts money away from property tax relief and K-12 education toward more government spending.

"Nebraska taxpayers need property tax relief, and I will work with senators to control spending and restore the property tax relief cut by the committee,” Ricketts said.

The committee's marks on the budget included their priorities to fund increases for Medicaid service providers and to aid in bringing down prison overcrowding. Also, in funding Medicaid expansion, adding to the property tax credit fund and expanding problem-solving courts. And in shoring up the state's rainy day fund.

It honored Ricketts' priority to increase funding for K-12 schools, Stinner said. 

Stinner said provider rate increases were always on the top of the priority list. Ricketts had proposed a 2% increase only for long-term care providers. The committee expanded that to all other providers, recommending 2% for Medicaid, child welfare and Children's Health Insurance providers. 

In addition, behavioral health providers would get a 2% per year average increase and developmental disabilities providers the same.

In the previous two-year budget, provider rates were cut by $58 million, and the committee wanted to start to pay that back, Stinner said. 

The committee's decision to inject only half the money recommended by Ricketts into the property tax credit fund — $26 million rather than $51 million with the remainder going to the rainy day fund — could bring the most contentious debate. 

Two Appropriations Committee members — Sens. Steve Erdman and Robert Clements — voted against that shift, and also voted no on the mainline budget.

Erdman, from Bayard in the Nebraska Panhandle, said he was opposed to halving the money put into the property tax credit program, and to the spending the committee was putting into place.

"We just spend money like, 'Well, how do we feel today?' That's how we spend money. We don't set any priorities in there," he said.

The state can't continue to grow its budget by 3% or more every year, he said. He predicted the revenue forecast would be dropped in October, when the Nebraska Economic Forecasting Board meets again. The decrease in tax revenue would be caused by a continued agricultural downturn, he said.

Erdman said there's a defined difference between eastern Nebraska, which seems to be growing and prospering, and western Nebraska and its rural areas. 

"You see the pain and the agony that people are going through because of the property tax and the commodity prices that we're suffering under now," he said. 

He cited the increase in salaries and utilities recommended for the University of Nebraska as another reason to vote against the recommended budget.

Salary increases of 2% for faculty were based on agreements with bargaining units at the University of Nebraska at Omaha and at the University of Nebraska at Kearney, and 2.2% for all other employees. The committee also offered a 2% increase in funding for utilities.

University of Nebraska President Hank Bounds said the committee's recommendation would keep tuition affordable for 52,000 University of Nebraska students.

"It positions us to continue to address the urgent workforce challenges facing our state," Bounds said. "And, it will help the university turn the corner after several difficult budget years."

Debate is expected to begin Wednesday morning, with the possibility of going into the evening if needed, said Speaker Jim Scheer.

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Reach the writer at 402-473-7228 or jyoung@journalstar.com

On Twitter @LJSLegislature.

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State government reporter

JoAnne Young covers state government, including the Legislature and state agencies, and the people they serve.

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