Increased revenue forecast eases budget crunch

Nebraska lawmakers struggling to balance the state’s budget got a little more wiggle room Wednesday, as officials raised their estimate of how much tax revenue the state will collect.

The Nebraska Economic Forecasting Advisory Board is a group of business people and academics who meet every few months to project how much tax revenue the state will collect, based on how the economy is performing. Those projections are then used by the Legislature in shaping the state budget.

Last October, the board cut its estimates, leading Gov. Pete Ricketts to propose budget cuts that set off an uproar, particularly at the University of Nebraska, which warned of potential cuts ranging from degree programs and faculty to sports and cancer research. After revenues exceeded projections for December and January, the Legislature’s Appropriations Committee voted last week to put back into its budget recommendation some of the money the governor had proposed cutting. But those “putbacks” depended on what the forecast board did.

Wednesday, the Board raised its official estimates by a total of $55 million for the current and next fiscal years. That’s not much in the grand scheme of things – it’s an increase of about six tenths of one percent over the $9.3 billion the state had been projected to collect. But it drew a relieved reaction from Sen. John Stinner, chairman of the Appropriations Committee. “I’m not going to say it’s a strong report. I think it’s an up report that we can work with – take some pressure off of what we did in committee, in terms of putbacks,” Stinner said.

The "putbacks” Stinner referred to include the committee’s recommendation to reduce the size of the proposed cut to higher education, including the university, from 4 percent next year to 1 percent, and for other state agencies from 4 percent to 2 percent. Stinner said those changes would cost about $30 million. A university spokeswoman said it was too early to say which possible cuts would be prevented by the looser budget strings.

Stinner said the some of the projected increased revenue could be used to start rebuilding the state’s cash reserve. There are also still proposals alive to cut taxes, but those have much higher price tags – some up to $1 billion dollars a year.

Tax Commissioner Tony Fulton reacted with caution after the board raised its forecast. “It’s not unreasonable what I saw here – somewhat predictable. (I) had a sense this is probably coming. I’m just not going to feel entirely comfortable until after April. It’s just the way I’m wired,” Fulton said.

April can make a big difference in receipts for the year, as people file their income tax returns and either have to pay in or get a refund.

And in legislative floor debate Wednesday, senators continued to deadlock over the question of whether juveniles should automatically be assigned lawyers before they go to court. Sen. Mike Groene, who’s against the proposal, criticized Nebraska Supreme Court Chief Justice Mike Heavican.

Groene said Heavican told judges not to contact senators with their concerns about the legislation, but then had an assistant lobbying in support of it. “That is not his place. He has the power to overturn our legislation. That is his power. He should not be lobbying for legislation. Tells the judges they can’t do it – they lose their citizenship, they can’t contact their senators with the knowledge they know. And then he has his man out there lobbying. That is wrong,” Groene said.

Court administrator Corey Steel said that as on other bills, Heavican told judges they can talk to senators about judicial processes, but should avoid advocating for specific policy changes. Steel added he had visited the lobby area briefly Tuesday to answer senators’ questions.

Sen. Patty Pansing Brooks, sponsor of the legislation, has said she thinks she has enough votes to keep trying to get it passed.

Editor's note: By way of full disclosure, NET Television receives some funding from the University of Nebraska-Lincoln.