Premium ContentMouse over Home then click on Premium Content for information.LINCOLN — The first day of the rest of the Nebraska legislative session arrives Friday.
That's when a state board issues the last official revenue forecast for the current budget period and when lawmakers have to start confronting the reality of budget choices.
Should they cut income taxes, as the governor wants, or put money into fixing the child welfare system?
Boost school aid, or partially restore payment cuts to Medicaid providers?
Build a new University of Nebraska cancer center, or serve more people with developmental disabilities?
Speaker of the Legislature Mike Flood of Norfolk predicted that those and other budget decisions will make for some tough weeks ahead.
"My sense is March is going to be a very difficult month," he said. "The forecasting board will set the stage for what we can and cannot do."
Clearly the state can't do it all.
Emerging from three lean budget years, the Legislature has been inundated with requests for money and tax breaks.
"Because of the recession, there is a need that has been building up," said State Sen. Abbie Cornett of Bellevue, chairwoman of the Revenue Committee. "Even though we have some money, it's not enough for everything."
The Appropriations Committee's preliminary budget, based on the current forecast, would leave an estimated $63 million of revenue on the table for the budget period ending June 30, 2013.
An increase in the forecast would mean more room for spending or tax cuts. The forecasting board sets the revenue figure that both the Legislature and the governor use in developing state budgets.
But legislative fiscal analysts say they don't expect the board will make a significant change to the forecast when it meets Friday.
That could set up clashes over the state's priorities among members of the Appropriations, Revenue, Education and Health and Human Services Committees.
"I think there will be some kind of collision, although I don't know whether you call it collision or debate," said Sen. Greg Adams of York, the Education Committee chairman.
The Revenue Committee is looking at the governor's proposal to cut individual and corporate income taxes, which would reduce revenues by $52 million during this budget period. The plan would cost $131 million per year when fully implemented.
That would be offset somewhat by a bill aimed at luring a large data center to the state. The center would mean $26 million more in tax revenue during the current budget cycle, then would cost the state in future years.
Other tax cut measures that have been named as priority bills would reduce revenues by more than $11 million next year.
The Education Committee, meanwhile, is looking at boosting state school aid, which took a hit during the last few years.
A proposal by Sen. Galen Hadley of Kearney would increase aid for next year by $29 million. Adams' alternative would mean a $19 million increase.
"The committee is interested in doing something," Adams said. "What dollar amount it will be and how we get there remains to be seen."
The Health and Human Services Committee has several bills aimed at fixing problems with the state's child welfare system, a concern brought to the forefront by the state's controversial two-year experiment in privatization. Those bills carry a $6 million price tag.
The committee also is working on bills to shore up the new call center system used to process applications for public benefits and to restore government-funded prenatal care for the unborn babies of illegal immigrants and other women.
Restoring the prenatal care would cost $2 million, with call center system improvements estimated to cost nearly $2 million more.
The Appropriations Committee has been tackling other HHS matters, among them a push to reverse some of last year's rate cuts for doctors, hospitals and other health care providers serving Medicaid patients.
Going back to the rates paid in 2010-11 would cost $14.3 million a year. The committee is looking at restoring $8.6 million worth.
Appropriations also is considering taking more developmentally disabled people off the state's waiting list. It would cost $30 million to serve everyone who wanted services as of Nov. 14, 2011, although the committee isn't considering that large a step.
Yet to be decided is how to handle the University of Nebraska's request for $91 million to build a cancer center, expand nursing education space and plan for a new veterinary laboratory.
Deciding among the possibilities and fitting the results into the budget will take collaboration and communication, Flood said.
Lawmakers are having many discussions, formal and informal, about the options. The Revenue and Appropriations Committees will meet after the forecast comes out.
"The Legislature has historically been able to look at where we're at and find a balance," Adams said.
Contact the writer:
402-473-9583, martha.stoddard@owh.com
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