Trouble in Paradise.

Once the legislative session starts next January, senators face several issues making this upcoming legislative session one to pay close attention to. One of those issues is with the crafting of the states biennial 2015-17 budget, which is expected to have a $177 million deficit.

Nebraska’s cash reserve fund now stands at $707.7 million the largest ever in state history, while senators were very conservative in how much they spent from the reserve the last two legislative session’s, they may not be able to be so fiscally conservative this go around.

The Legislatures Tax Revenue Committee which meets twice a year has said spending will increase in the areas of : Funding for K-12, Medicaid, Public Assistance, Employee Salaries, and Inmate costs per diem. A more formal estimate will be made once all state agencies have submitted budget requests for the next biennium.

Spending on several major items at least a couple of which benefit state taxpayers are said to contribute to the shortfall in the 2014-15 fiscal year. They include income tax cuts, redirection of a quarter-cent sales tax to road projects, a $25 million transfer to the Property Tax Credit Fund, and spending growth of 6.3 percent that exceeds revenue growth of 4.7 percent.

The legislature will have its work cut out for them in the next session as senators attempt to deal with serious issues that remain ongoing like entitlement reform, prison reform, a $5.5 million Republican River Compact settlement, federal penalties for failure to properly track payments by the Nebraska Department of Health and Human Services, and any claims against the state because of blunders by the state Department of Correctional Services.

The Legislature will begin work on the projected $8.6 billion budget for 2015-17 with at least 17 new senators, including at least four new Appropriations Committee members, and a new governor who will craft a budget to serve as a foundation for work by the committee.


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