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Legislative leaders optimistic about Nebraska’s fiscal health after careful spending

State Sen. Lou Ann Linehan of Elkhorn, heart, talks with State Sens. Lynne Walz of Fremont (proper) and Anna Wishart of Lincoln. April 9, 2024. (Zach Wendling/Nebraska Examiner)

LINCOLN — Top Nebraska state senators say they really feel comfy with the extent of state reserves they left behind in 2024 and past after rigorously contemplating spending requests throughout this yr’s legislative session.

Nebraska lawmakers are statutorily required to have a balanced funds and are projected to finish the following fiscal yr, on June 30, 2025, with greater than $500 million within the state’s money reserves, or 4.5%, above the specified minimal quantity. The state is projected within the following biennium to finish about $50 million underneath that minimal reserve.

These figures might change when precise revenues are available in. They additionally don’t account for any particular periods, reminiscent of one anticipated in late July on property taxes.

Positive financial horizons

State Sen. Robert Clements of Elmwood, who chairs the Legislature’s Appropriations Committee, stated the $50 million shortfall by June 30, 2027, is an “acceptable number” and stays in an satisfactory vary.

State Sen. Robert Clements of Elmwood. Oct. 27, 2023. (Zach Wendling/Nebraska Examiner)

He famous that simply days earlier than the Legislature adjourned on April 18, projections have been that spending would draw state funds down by greater than $1 billion underneath that minimal reserve purpose. As a outcome, lawmakers labored to convey down their fiscal requests.

“If it was $100 million, we probably would have to make some adjustments,” Clements stated.

State Sen. Lou Ann Linehan of Elkhorn, who chairs the Legislature’s Revenue Committee, stated financial forecasts are too conservative, so the state could possibly be in a greater place than estimates present. She stated she additionally doesn’t see state revenues declining or remaining flat.

Linehan and Clements stated that there is no such thing as a recession and that Nebraska’s fiscal health is safe.

Every yr, lawmakers convey payments asking for “more than we can possibly do,” Linehan stated. Those requests are calculated every day on what’s known as the “green sheet.”

Lowering fiscal requests

State Sen. Myron Dorn of Adams was one senator who usually spoke about the estimated tally of requested funding, bringing consideration to the necessity to preserve about 16% of state revenues within the money reserves, which he stated is about $880 million.

State Sen. Myron Dorn of Adams. Jan. 5, 2023. (Zach Wendling/Nebraska News Service)

Lawmakers didn’t want to finish the yr at a wash with the specified minimal reserve quantity, Dorn famous. But had it been one thing nearer to $500 million, it might seemingly be an issue for future challenges when the Appropriations Committee assembles the following two-year funds.

“It didn’t seem like people were really aware,” Dorn stated.

During at some point of debate on a tax credit score proposal, Dorn bluntly stated lawmakers didn’t must combat about what to fund. Rather, they wanted to seek out out whether funding was available.

“This bill won’t go nowhere unless you come back and bring us some funding sources back,” he stated on the time.

Lawmakers did exactly that underneath the steering of Speaker John Arch of La Vista and committee chairs, Clements stated, stating invoice introducers introduced many proposals all the way down to the  “minimum number” they may work with.

“I was very pleased at how hard people worked to do that,” Clements stated.

The want for negotiation

Linehan was one such lawmaker who, in her quest to safe funding for Nebraska college students to attend personal Okay-12 faculties somewhat than public counterparts, lowered her annual request by $15 million.

State Sen. Lou Ann Linehan of Elkhorn, heart, talks with State Sens. Fred Meyer of St. Paul and Danielle Conrad of Lincoln. Dec. 7, 2023. (Zach Wendling/Nebraska Examiner)

She introduced Legislative Bill 1402 instead that might repeal final yr’s measure — which had an annual price ticket of $25 million and will have later ballooned to $100 million — and changed the funding as a direct appropriation to the state treasurer somewhat than tax credit.

Linehan lowered LB 1402’s value to $10 million yearly as properly with no “escalator clause,” or annual development that might come exterior legislative motion.

“I knew what the green sheet said. I knew that there were some people concerned about the money. And I knew I had to get to 33,” Linehan stated, referring to the variety of votes she wanted. “So you negotiate.”

Attracting out-of-state staff

Four different lawmakers — State Sens. Beau Ballard of Lincoln, John Fredrickson of Omaha, Teresa Ibach of Sumner and Lynne Walz of Fremont — joined Linehan in a number of lawmakers who equally wanted to regulate for his or her proposals to attain passage this yr.

Ballard’s proposal, LB 1400, created the Relocation Incentive Act at Gov. Jim Pillen’s request, establishing incentives for companies to draw out-of-state staff. This consists of relocation bills for workers making between $70,000 and $250,000, as much as 50% of such bills with a most of $5,000 in credit allowed per worker.

State Sen. Beau Ballard of Lincoln, heart, speaks with State Sen. Robert Dover of Norfolk. Dec. 7, 2023. (Zach Wendling/Nebraska Examiner)

The proposal was amended into LB 1023 and had an authentic estimated value of about $8 million in its first yr and $27 million the following. Lawmakers capped this system at $5 million per yr.

“I mean, I was fine with the fiscal note because that means people are coming to the state,” Ballard stated. “I think $5 million is a good starting point.”

The state should discover a method to appeal to people to Nebraska, Ballard stated, particularly to develop the state’s tax base for property tax aid, so he checked out “pro business, pro economy” approaches. This resulted within the new “innovative” pilot program that may start Jan. 1.

“It’s an immediate ROI (return on investment),” Ballard stated.

Child care proposal loses funding

But not all lawmakers with a excessive fiscal notice have been as fortunate. Fredrickson sought a multiplying impact to usher in extra baby care staff via his precedence invoice, LB 856.

State Sen. John Fredrickson testifies regarding mental and behavioral health challengesState Sen. John Fredrickson testifies regarding mental and behavioral health challenges

State Sen. John Fredrickson testifies concerning psychological and behavioral health challenges

State Sen. John Fredrickson of Omaha testifies earlier than the Health and Human Services Committee. Sept. 20, 2023. (Zach Wendling/Nebraska Examiner)

Like Ballard, Fredrickson added a cap to the invoice — $10 million yearly — however he stated it grew to become “more and more clear” that lawmakers had restricted funds. And regardless of his colleagues articulating that workforce and baby care have been high priorities, the Omaha senator stated, they “did not have the political will” to make important investments via his invoice.

“We can talk the talk but we have got to walk the walk as well,” Fredrickson stated.

Fredrickson dropped all state funding, as a substitute making a technical change to a Nebraska Department of Health and Human Services rule that prohibited dwelling baby care suppliers from receiving free baby care help for their very own kids if no different lodging have been out there.

Such staff have been in any other case eligible for the federal subsidy, Fredrickson stated, and the change will assist suppliers in significantly rural areas or components of the state the place baby care is proscribed.

Fredrickson stated he’ll proceed engaged on his invoice within the interim and can convey again funding laws. He is assured he and his colleagues can attain an settlement, with Pillen’s assist.

Plethora of schooling proposals

Ibach and Walz took a distinct method, discovering current money reserves that would fund their proposals.

Walz, in her ultimate yr as a lawmaker, took a tough have a look at her precedence invoice, a bundle of schooling payments in LB 1284, which had an estimated value of $20.8 million. 

State Sen. Lynne Walz of Fremont, heart left, meets with State Sen. Lou Ann Linehan of Elkhorn, left, and their respective legislative aides, Amanda Callaway and Ryan Yang, on the ground of the Legislature. April 9, 2024. (Zach Wendling/Nebraska Examiner)

Along with different lawmakers who had payments in her bundle — Linehan and State Sens. George Dungan and Danielle Conrad, each of Lincoln — she checked out what could be reduced and what stakeholders might live with as a result of “everybody deserves the opportunity to a good education.”

“This bill is just so important to education that I didn’t want to take the chance of having to fight for the funds on the floor,” Walz stated.

She discovered a house within the Education Future Fund, which was created in final yr’s legislative session via an preliminary $1 billion funding and $250 million yearly after. 

As handed, LB 1284 will value about $4.1 million in its first yr and $3.8 million within the second, practically all from the Education Future Fund. About $150,000 within the first yr and $80,000 within the second are for administrative prices.

Included within the invoice are proposals to:

  • Establish a Computer Science and Technology Education Fund that may prepare lecturers and assist college students to finish a commencement requirement in these areas (from Walz).

  • Train lecturers in kindergarten via third grade educate studying via studying enchancment mentorship packages and regional coaches (from Linehan).

  • Create a Dyslexia Research Grant Program to assist Nebraska corporations researching artificial-intelligence-based writing for people with dyslexia (from Linehan).

  • Expand eligibility for Nebraska Career Scholarships to incorporate particular schooling (from Dungan).

  • Distribute menstrual merchandise to pick out faculties in a pilot program, starting in 2025 (from Conrad).

Incentivizing the combat once more nitrates

Ibach’s precedence invoice, the Nitrogen Reduction Incentive Act in LB 1368, will encourage Nebraska farmers to undertake environment friendly and sustainable practices that may defend the state’s pure assets, reminiscent of from nitrates, and promote competitors amongst farmers.

State Sen. Teresa Ibach of Sumner. March 3, 2023. (Zach Wendling/Nebraska News Service)

Under Ibach’s invoice, the Nebraska Department of Natural Resources will set up a grant program for an annual per-acre incentive of at the least $10. 

Farmers should confirm that they’ve lowered their business fertilizer use by the lesser of 40 kilos per acre for nitrogen or 15% by incorporating a qualifying product within the farmer’s nutrient plans.

The act features a $5 million cap however features a provision that the state will fund nonetheless a lot lawmakers make out there, which within the first yr will encompass at the least $1 million from curiosity accrued within the state’s Water Resources Cash Fund, although Ibach stated she and division officers will proceed to search for different funds.

“Any private, public or grant opportunity I can find, I will tap into it,” Ibach stated.

Ibach stated it’s essential to be fiscally accountable, and when confronted with the chance of no funding, she regarded elsewhere and met with Tom Reilly, director of the Department of Natural Resources.

“I was not going to settle for not putting the program in place because I think it’s that important to our producers, that important to our environment and that important to our state to be the first and fastest to find solutions to the nitrate issue that all Nebraskans think is an issue,” Ibach stated.

She stated it’s a part of lawmakers’ jobs to be options pushed, artistic and discover completely different funding mechanisms on behalf of Nebraskans.

“When you partner with really out-of-the-box thinking folks, you come up with solutions,” Ibach stated. “I think that’s what we do every day.”

The submit Legislative leaders optimistic about Nebraska’s fiscal health after careful spending appeared first on Nebraska Examiner.

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