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Budget advances after Nebraska lawmakers weigh making cuts, boosting aid to families

Budget advances after Nebraska lawmakers weigh making cuts, boosting aid to families

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LINCOLN — Nebraska lawmakers weighed competing budget priorities Tuesday before sticking with the balance drawn by the Appropriations Committee.

First they looked at using federal coronavirus aid to boost support for families hit economically by the coronavirus. Then they considered cutting nearly $15 million from the budget proposal in light of fiscal uncertainties created by the pandemic.

In the end, they advanced the budget bills just as they had been put forth by the Appropriations Committee. The bills make changes in the state budget passed last year, which covers the two-year period ending June 30.

State Sen. Kate Bolz of Lincoln, the Appropriations Committee vice chairwoman, said the budget plan includes spending for immediate needs as well as investments addressing longer-term problems.

“I think this budget does what it needs to do,” she said.

But she and others acknowledged that the state’s fiscal picture has changed since the committee crafted the plan early in the year. First-round debate occurred before lawmakers took a four-month break to avoid potential spread of the coronavirus. Since then, state tax revenues have dropped while unemployment numbers shot up.

Plans to more than double the state’s cash reserve fund have fallen by the wayside, and the amount of money left for property tax relief and business tax incentives dropped to about $90 million, down from the nearly $134 million estimated before the break.

Federal coronavirus aid has helped Nebraska avoid worse pain. The federal government gave $1.25 billion to state and local governments, while other programs provided aid directly to unemployed workers, struggling businesses and Nebraska households.

Sen. Machaela Cavanaugh of Omaha proposed an amendment to use about $130 million of the state’s coronavirus relief for struggling families.

She called for temporarily boosting housing assistance, food assistance and child care subsidies, while giving $500 for every child in families getting Aid to Dependent Children and $500 to every low-income family that suffered a 50% cut in income since March 13.

“This is our moment. This is our opportunity to do something for the people of Nebraska,” she said. “This money can’t go to property tax relief but it can go to people.”

Under a plan developed by Gov. Pete Ricketts, that $130 million is to be set aside to shore up the state’s unemployment insurance fund or to help the state’s bottom line.

The amendment failed with 16 votes in favor and 28 against it.

Sen. Curt Friesen of Henderson introduced the next amendment, which would have eliminated several spending increases included in the budget by the Appropriations Committee.

Among the items to be cut were $10 million to build rural workforce housing, $250,000 for child advocacy centers, $1 million for need-based college scholarships, $3.7 million to boost rates paid to developmental disability services providers and $250,000 for testing sexual assault evidence kits.

Friesen said he proposed the amendment out of concern about balancing the budget in future years. Current projections show gap between expected revenues and estimated spending for the two-year budget period beginning July 1, 2021.

But Stinner argued that making the proposed cuts while putting more money into property tax relief would be unbalanced. He noted that the state already puts $275 million a year into the Property Tax Credit Fund, along with money to ease personal property taxes and to relieve taxes for some elderly and disabled homeowners.

“You have to run the government, folks,” he said.

Friesen, who is a major voice for property tax relief, ended up withdrawing his amendment.

As advanced, the budget would result in 3% average annual spending growth. It would leave the cash reserve fund at an estimated $382 million at the end of the two-year budget period, although the total could grow if the state is able to keep unused portions of the $1.25 billion coronavirus aid.

The budget plan includes $55 million to pay the state’s share of costs for recovery from last year’s flooding and other weather disasters. Of that, about $9 million would go toward helping the hardest-hit counties meet their share of costs.

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