LINCOLN — Nebraska lawmakers will get their first look Wednesday at the Appropriations Committee's $7.8 billion, two-year state budget proposal.
That gives them nearly a week to decide whether they can support a 5.2 percent average annual growth in state spending and are willing to add $51 million to the state savings account.
The Appropriations Committee signed off on the budget package Monday. Debate on the plan is slated to begin next week.
State Sen. Heath Mello of Omaha, the committee chairman, praised the committee's product.
He called it “a positive first step to getting a budget on the floor with no dissenting votes.”
“It's a good budget,” Mello said.
But he predicted that other lawmakers will not be entirely happy with the plan because it takes money off the table that could otherwise be used for new programs or tax-cut measures.
Before wrapping up their work Monday, committee members voted to take $51 million of tax revenue off the table and add it to the state cash reserve fund.
That represents the amount added last week to official projections of state tax revenues for the two fiscal years beginning on July 1.
The $51 million would push the cash reserve fund to an estimated $625 million.
Mello argued that moving the money to the cash reserve would be fiscally prudent, given uncertainties about the drought and the importance of the reserve fund in helping the state weather recent economic difficulties.
Sen. John Harms of Scottsbluff agreed but warned that “everyone's going to want a piece of that” money.
One committee member, Sen. Bill Kintner of Papillion, said he would rather give the money back to taxpayers than collect it in a state fund. His position was similar to that of Gov. Dave Heineman, who said last week that the brighter revenue forecast should make tax relief a priority.
Other panel members said the money could still be used for tax cuts once a planned tax study commission finishes its work. The commission is expected to work over the summer and fall to develop tax overhaul ideas.
Sen. Paul Schumacher of Columbus, vice chairman of the Revenue Committee, and Jim Smith of Papillion said they didn't know of any plans to push for additional tax cuts before the commission finishes its work.
But Kintner and committee colleague Sen. Tyson Larson of O'Neill left themselves open to supporting tax relief measures that might conflict with the budget package.
Kintner abstained on the motion to put the money in the cash reserve fund. Larson supported that motion and voted for the main budget bill, but with a caveat. He said he would support ideas such as enlarging the fund used to provide property tax credits.
He also abstained on a bill to fund capital construction projects. He said he had concerns about renovations at the State Historical Society and about some university and state college projects.
The main budget bill won unanimous 9-0 support from the sometimes-fractious committee.
Before the vote, Kintner expressed qualms about the amount of state spending growth in the budget package. He said he would prefer 5 percent or 5.1 percent average growth, not the 5.2 percent in the package.
“We've gone above my comfort zone,” he said.
Mello said a compromise reached on the state school aid bill reduces the amount needed for K-12 schools and should bring down the average.
He also noted that the budget package makes room for increases in state school aid and for higher state contributions to retirement plans for school employees, judges and State Patrol employees.
Without those items, the committee's proposal would average a 4.9 percent increase — the same level that Heineman had recommended. It would leave about $48 million for spending initiatives and tax-cut measures advanced by other committees.
The proposal would increase spending for the University of Nebraska and state colleges enough that they have said they can freeze tuition for two years.
It also includes money to serve more people with intellectual disabilities who are on the state waiting list and to increase the payment rate for child welfare and health care providers.
In addition, it includes money to meet requirements of the federal health care overhaul.
Among the more controversial items in the proposal is $2.2 million to buy an airplane from the NU Foundation. Sen. Bob Krist of Omaha, a pilot, plans to fight the proposed purchase.
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