Nebraska begins 2016 session with looming budget shortfall

By GRANT SCHULTE and ANNA GRONEWOLD

Associated Press

LINCOLN, Neb. (AP) - Nebraska lawmakers kicked off the 2016 session Wednesday with an expected focus on property taxes and a looming state budget shortfall.

Senators, staff members and other onlookers filled the legislative chamber at the outset of the short, 60-day session, which will require lawmakers and Gov. Pete Ricketts to fill a projected $110 million shortfall in the current state budget.

Ricketts has identified property tax cuts as his top priority this year, but the budget could complicate efforts to pass major legislation. Senators expect to fill at least some of the shortfall by tapping the state’s cash reserve fund, which is expected to reach a record high of nearly $729 million on June 30.

Even so, the chairman of the Legislature’s Appropriation Committee said he has warned senators not to set their sights too high.

“We can make progress, but it’s going to have to be very small progress,” said Sen. Heath Mello of Omaha.

Sen. Bill Kintner said he believes lawmakers will rely on a combination of cash reserve money and spending cuts to balance the budget, but the appropriation committee member from Papillion first wants to see Ricketts’ budget recommendations.

Lawmakers also are waiting for the Nebraska Economic Forecasting Advisory Board’s next meeting in February, when revenue estimates will be updated. If the board predicts another decline in revenue, the projected budget shortfall will grow and senators could have to raise taxes, cut even more spending or pull money from the cash reserve.

“The key is what comes from that forecasting board,” Kintner said.

Despite the projected shortfall, Sen. Kate Sullivan of Cedar Rapids said she expects to see a push to increase state funding to schools as a way to lower property taxes. Sullivan helped lead a joint committee over the summer that looked at ways to encourage school districts to lower such levies.

She also thinks lawmakers will look to the cash reserve to fund some of their priorities.

“That’s what it’s there for, quite frankly,” she said. “I certainly don’t want to raid it, but by the same token, there are critical things that need to be accomplished.”

Others doubted that tapping the cash reserve was necessary.

“Is this severe enough we should tap into that? Probably not,” said Sen. Jerry Johnson of Wahoo.

This year’s session will be the last for at least 11 of the Legislature’s 49 senators who cannot run again because of term limits. That said, senior lawmakers and the 13 senators that have filed for re-election this year may also push harder than usual to achieve their priorities, said Sen. Paul Schumacher of Columbus.

“I think there will be quite a bit of handwringing about the fact that everyone would like tax relief, but numbers limit the amount that can be considered,” Schumacher said.

Sen. Mike Groene of North Platte said he plans to fight legislation that requires additional state spending without cuts to offset it. But he learned in 2015, his first year in office, that change comes slowly.

“The drive down here wasn’t as exciting as it was last year,” he said. “You know, as a rookie, you think you’re going to change the world on the first day.”

Lawmakers also are expected to consider a comprehensive roads bill to speed up certain projects, K-12 education funding and a new Medicaid proposal to help cover thousands of uninsured residents.

Speaker of the Legislature Galen Hadley told lawmakers that he hopes to allow debate for every bill that has received a “priority” designation from senators, a designation that increases the legislation’s odds of being debated.

Last modified onThursday, 07 January 2016 13:27

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