Gov. Dave Heineman today released his proposed state biennium budget for Fiscal Years 2013 – 2015. The Governor’s budget is in line with the vision for Nebraska’s future that he has emphasized throughout his tenure as Governor: education, growing the State’s economy and rebuilding the state’s cash reserve fund.
The first priority identified is education. In his budget, Gov. Heineman proposed funding that would be necessary for the university and state colleges to freeze tuition for Nebraska students for two years. The Governor is recommending that the University of Nebraska’s appropriation increase from its current level of $498 million to $541 million in fiscal year 2015, and that the Nebraska State College System’s funding increase from $45.5 million to $49.6 million in fiscal year 2015. Gov. Heineman also proposed a similar funding increase for Community Colleges, noting that he is hopeful they will freeze tuition, as well.
In his State of the State address, Gov. Heineman said, “Our students of today are the leaders of tomorrow, and it is critical to our future that they have affordable access to a quality higher education.” He added, “This is very good news for Nebraska families who are working hard to ensure that their sons and daughters can afford to go to college.”
Gov. Heineman has proposed 5% annual increases for State Aid to Education and Special Education for each of the next 2 years. Under this proposal, State Aid would increase from its current level of $852 million to $939 million in FY 2015.
“Education is the great equalizer and education is one of our state’s top priorities. We invest in education because we know how important it is,” said Gov. Heineman.
The second priority of growing the State’s economy is two-fold. In the proposed budget, there are no tax increases. The budget includes continued funding of the Governor’s Property Tax Credit Program, which provides direct property tax relief to Nebraskans. Since the program began in 2007, the State has provided approximately $680 million to property owners and businesses.
Additionally, supporting growth of the State’s economy, separate from the budget proposal; the Governor is calling for reforming Nebraska’s tax code. The tax reform will look to eliminate the individual income tax and the corporate income tax or lower rates, helping hardworking Nebraskans, small businesses and retirees. The tax reform proposal is separate from the budget because it is revenue neutral and budget neutral.
A final, significant point of the budget proposal is the costly impact of President Obama’s federal health care law. In the next two year budget cycle, the State of Nebraska and every state in America is required by federal law to implement President Obama’s new federal health care law, having an enormous financial impact on the State’s budget.
Implementing President Obama’s new federal health care law has significant costs to the taxpayers in a variety of ways. It will cost more than $170 million in federal and state funds over the next eight years to implement just the technology and administration required by the new federal health care law.
And even more significant: it will cost the State of Nebraska $72 million in new general funds in this budget for the growth of the current Medicaid program as a result of President Obama’s new federal health care law.
In his State of the State address, Gov. Heineman stated, “That’s $72 million in new general fund spending for President Obama’s new federal health care law that should be going to state aid to education or higher education.”
One of the reasons why Nebraska fared far better during the national economic slowdown was that Nebraska had a robust cash reserve, which was utilized in the State’s budget during the slowdown. Now that Nebraska is again poised for growth, it is important to rebuild the depleted reserve fund. The Governor’s budget proposal currently estimates rebuilding the cash reserve from its current $384 million to $442 million in FY 16-17.
“Unlike the federal government, we don’t spend money we don’t have,” said Gov. Heineman. “We balance our budget in state government and our family budgets by controlling spending, not by raising taxes. Nebraskans are very careful and conservative in how they spend their money.”
Regarding general projects included in the budget, there is funding for a new Central Nebraska Veterans Home. While the project is at its inception, the Governor, a veteran himself, said, “Having a new, modern facility to care for our veterans is important. This new veterans home will serve those who have served our country, protecting our freedoms.”