By GRANT SCHULTE
LINCOLN, Neb. (AP) - Nebraska lawmakers gave initial approval Thursday to an $8.6 billion budget with new spending for property tax reductions, education and a controversial dental-school project in Omaha.
The first-round vote on this year’s budget bills came after lawmakers learned that they will likely have more money at their disposal than expected.
The two-year budget would increase annual state spending by an average of 3.1 percent - one of the lowest rates in three decades - although that percentage could increase if other spending bills pass. Lawmakers debated individual spending items into the evening after giving the bill initial approval.
“The decisions in this budget package recognize the priorities of this Legislature, reflect the values of Nebraskans and respond to the needs of our communities across the state,” said Sen. Heath Mello of Omaha, chairman of the Appropriations Committee.
The budget includes $200 million a year in state money to help reduce local property taxes, matching the recommendations in Gov. Pete Ricketts’ budget proposal.
If approved, owners of a $100,000 home would receive a $93.33 credit against their property tax bill - a $28 increase over the current funding level. Farm- and ranchland owners would receive the largest share of the credits because of surging agricultural land values, resulting in higher taxes.
The budget also would boost funding for K-12 and higher education, with a 3 percent increase for the University of Nebraska, the state colleges and community colleges. Funding for the K-12 state aid formula would grow by $47.7 million over two years, and each school would receive more money for special education students.
Another committee member, Sen. Bill Kintner of Papillion, said the budget package reflects a compromise that gives no one everything that they wanted. Kintner said he was pleased with the additional millions to help lower property taxes.
“It’s never an easy thing to do,” Kintner said. “But I think on balance, this is probably a good budget.”
Several senators criticized an $8 million appropriation for services and equipment for training of dental students. Critics said budget was intended to benefit Creighton University, a Catholic university in Omaha. Creighton’s dental school provides charity services and is planning to build a new clinic in Omaha to treat more patients and teach more students.
“I don’t want to see the state getting into the business of giving public money to private operations, especially when they are sectarian,” said Sen. Ernie Chambers of Omaha.
Mello said the budget item would help create a valuable public-private partnership to help treat thousands of Nebraska residents. He said lawmakers would try to reach a compromise before the second- or third-round votes.
Sen. Mike Groene of North Platte said the university should pay for its own projects and argued that lawmakers need to cut spending more aggressively.
Lawmakers also went after a $25 million budget item for a virtual reality training center at the University of Nebraska Medical Center in Omaha. University leaders testified in March that the facility would help attract students and give them new ways to teach.
“I’d just like to see this go back to the taxpayer,” said Sen. David Schnoor, of Scribner.
Lawmakers will have roughly $58.7 million available for spending beyond what’s included in this year’s budget.
The Nebraska Economic Forecasting Advisory Board projected Thursday that state revenue will grow 5 percent during the fiscal year that starts on July 1 and 4.3 percent in the following year.
Mello said he was “pleasantly surprised” by the new forecast because he had expected a downturn, but stressed that lawmakers should remain cautious. He said the Appropriations Committee would meet Friday to discuss how to use the additional money.
Ricketts, a Republican, urged lawmakers to use the revenue on tax cuts.
“Today’s forecast shows that property tax relief is well within reach for hard-working Nebraskans,” Ricketts said.