Senator Rob Clements Column 4-9-2021
The Nebraska Legislature is over halfway through this year’s 90-day session. I have been working on the budget with the Appropriations Committee since January. On April 8th we had the first round of debate on the two-year budget and advanced it to the second round. There are a few highlights I would like to discuss.
The General Fund budget is $4.78 billion for fiscal year 2021-22 and $4.94 billion for fiscal year 2022-23, an average growth rate of 1.6 percent per year.
One of my budget priorities is property tax relief. In 2020 we passed LB 1107 which created a new income tax credit based on the property tax paid to public schools. The 2020 appropriation was $125 million, providing for an income tax credit of 6 percent of school tax paid. This tax credit increases when state revenues grow more than 3.5 percent. State revenue has grown enough to allow for credits totaling $313 million for 2021, which would be a 14 percent credit. In addition, we are increasing the original property tax credit on your property tax statement, going from $275 million to $313 million by June 30, 2022.
Another budget priority was to replenish the Cash Reserve Fund, the State’s savings account. Increased revenues allowed the reserve to increase from $426 million to $763 million by June 30, 2022. This reserve helps stabilize the budget if there is an economic downturn in the future.
State aid to schools is a priority and is fully funded. School aid will increase by $18.4 million over the next two years. The state will send $1.047 billion to K-12 public schools this coming year.
The budget also sets aside $115 million for a potential new state penitentiary or remodel of the current facility. A new prison would cost $235 million and would increase the number of beds, would be more efficient, and provide more space for inmate rehab programs. A new prison study will help decide the best option.
Nebraska is still in the competition for a new Space Force Command headquarters. We set aside $50 million for the state share if Nebraska is chosen. If not, the money will add to the reserve.
Provider rates were increased for Department of Health and Human Services Medicaid programs, community corrections and juvenile services. The budget increases these payments by 2 percent each year. This is an increase of $89.3 million and helps providers keep up with inflation.
There is $211 million still available for spending in bills up for debate. Senators will be wanting to fund their proposals with these unobligated funds. I prefer to give it back to the taxpayer with property tax credits or tax decreases. I will work to avoid adding new on-going spending increases.
The Revenue Forecasting Board will meet again April 29th to adjust the budget forecast. This will affect the budget for the next biennium. State revenues continue to be favorable due to Nebraskan’s decision to remain open as much as possible during the pandemic, plus the substantial federal stimulus payments.
Feel free to contact me or my staff for assistance, information, or questions on issues. You may reach me at: Senator Robert Clements, State Capitol Rm 1120, Lincoln, NE 68509, Phone 4024712613
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