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Nebraska lawmakers gave first-round approval yesterday to the bill that makes mid-biennium adjustments to the 2-year $10-billion dollars state budget passed last year that reflect changes encountered since then.
The bill makes few changes from the revised spending proposals offered in January by Governor Jim Pillen, but does increase spending by 3.1% instead of the governor’s 2.4% because of an unexpected, $94 million dollar increase in state aid to K-12 schools.
Some of the biggest objections came on proposed spending cuts for services for the developmentally disabled and those with mental illnesses that advocates maintain are already underfunded.
The bill includes Pillen’s suggestions to “sweep up” around $200 million dollars in unspent funds held by state agencies and use them to balance the budget and help pay for property tax relief.
Among the “sweep up” funds is a $70 million dollar transfer out of the state’s unemployment insurance trust fund, raised by employers paying a tax on their payrolls to pay unemployment benefits.
Under the budget proposal, some of it would go to the general fund, where it can be used for many other purposes.
It also takes $25 million from the Affordable Housing Trust Fund and redistributes it, with $20 million going to rural workforce housing and $5 million for middle-income housing.
Supporters say the change is good because the Affordable Housing Fund is not being used to the fullest extent, Housing Fund advocates say the problem is that the state’s not disbursing the money quickly enough.
The Legislative Fiscal Office says that under the budget bill, there will still be $904 million left in the state’s cash reserve fund at the end of the two-year budget next June as well as nearly $575-million in budget reserves.
Some senators have raised concerns about whether the state can sustain the deep cuts in state income taxes passed a year ago, leading to talk of amendments to the budget adjustment during second-round debate.