The Appropriations Committee released a preliminary budget plan Wednesday that would increase state spending at twice the rate proposed by Gov. Jim Pillen.Â
Sen. Rob Clements of Elmwood, the committee chairman, said the difference largely lies with the decision to include pending requests in the committee's preliminary plan. Those requests are under consideration but have not been approved.
"Those are not final numbers," he said.
The preliminary budget would leave $465 million of state tax revenues available for other uses during the two-year period ending June 30, 2025. But that's barely enough to cover the income and property tax cuts that Pillen put forth. Those cuts add up to $457 million, according to legislative fiscal office estimates.
The committee's plan also came out as the latest report of state tax receipts showed possible clouds on the economic horizon. The report for January showed that tax collections for November through January were $53.7 million — or 1.5% — lower than expected.Â
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A Wednesday report from the state Department of Revenue showed Nebraska netted roughly $536 million in January, which is 7.7% lower than the $581 million projected. The numbers are reflective of fluctuating revenues for the state over the past three months. In December, net revenues were 9% higher than projections, while in November they were 10% lower.Â
The latest revenue projections were set by the Nebraska Economic Forecasting Advisory Board in October, which added $1.8 billion to the state’s overall revenue forecast for the next two fiscal years. The board will meet next week and again in April to update its projections.Â
Meanwhile, the Appropriations Committee will be holding public hearings on each state agency, plus 87 legislative bills, as members continue with the budget-crafting process.Â
Legislative rules require the committee to get its final budget plan to the full Legislature by May 2, the 70th day of the session. The budget must be passed by May 18, the 80th day.Â
Under the committee's preliminary plan, state spending would increase by 4.9% in the fiscal year ending June 30, 2024, and 0.5% in the following year. Pillen recommended increases of 2.6% and zero for the two years.
His budget recommendations were finalized before his administration negotiated contracts with employee unions to give raises to state employees. The final salary numbers were higher than those Pillen had included in his plan.Â
Among the items awaiting further review is a $1.25 billion transfer out of general fund revenues — the amount that Pillen proposed be set aside in a new Education Future Fund to be used for changes in school aid. But the committee approved a $135 million, two-year increase in the state's original property tax credit fund.Â
Other pending items include a 2% annual increase in the University of Nebraska budget, which made it into Pillen's budget recommendations, but is not among the approved items in the committee's plan.Â
Money to cover previously negotiated salary increases for the Department of Correctional Services employees and authorization to build a proposed new prison also ended up among the pending items.Â
Nebraska has been reporting high revenue growth for the last several fiscal years, beating a record previously set in the late 1980s. However, financial analysts have warned state officials that the growth may be foreshadowing an looming drop.
Clements said the drop in January’s tax receipts isn't cause for alarm. He said it’s common for revenues to fluctuate from month to month, and the decrease in January was offset by the gains in December. He said he expects state revenues will bounce back some in February’s numbers.
“The revenue for the fiscal year is still holding stable,†he said.