Nebraska state budget (2011-2012)

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The state of Nebraska passed a biennial budget for FY 2011-2012 on May 11, 2011. The budget spent approximately $7 billion over the biennium and closed a budget gap that had been projected to be nearly $1 billion.[1]

The passed budget did not raise taxes, but it did cut state agency budgets. It also rewrote the school funding formula, which saved $410 million over the biennium and left nearly $300 million in the state's cash reserves.[1] A General Fund Appropriations Summary prepared by the state for the 2011‐2013 Biennium can be found here.

Governor Dave Heineman said he opposed dipping into the state's $325 million cash reserve fund to cover the budget gap.[2] The governor supported a bill that would eliminate state aid to local governments, saving $44 million a year.[3]

Lawmakers said they planned to close the budget gap without tax increases.[4] Options on the table included transferring $270 million from the state's cash reserve fund and holding total state spending growth to about 1.5 percent to two percent for the next two years.[4] The November spending estimates showed a growth increase of 7.6 percent, down from the 10.4 percent growth of prior estimates.[4] The growth in spending decreased due to lower school aid calculations and a new contract with the largest state employees union that called for a pay freeze the following year and two percent raises in 2012-2013.[4]

Federal funds accounted for approximately one-third of the state budget. The state expected about $2.6 billion in 2011.[5]

Collective Bargaining and Public Employee Unions

Senator John Nelson introduced LB664, which would have abolished the Commission on Industrial Relations and prohibited the state from engaging in collective bargaining, saving the state about $500,000 over two years.[6]

Budget Cuts

Nebraska lawmakers were told that the fat had been cut and the next step was for legislative committees to identify possible cuts totaling 10 percent of state general-fund appropriations for all agencies under their purview.[7] Nebraska Education Commissioner Roger Breed told the Legislature's Education Committee that cutting 10 percent would mean eliminating programs.[7] The Health and Human Services Committee had to identify possible cuts of $235 million that could be made over the next two-year budget cycle.[8] The Department of Health and Human Services oversees welfare and Medicaid, accounting for 35 percent of the state's general-fund budget, where as it used less than 31 percent of the state budget a decade ago.[8]