Photo by George Lauby Tom Hansen

Courtesy Photo/Image State revenue growth, by year, 1982 to 2013 estimate. Source: Legislature's Appropriations Committee. (Click to enlarge)

The Legislature's first Special Session of 2009 wrapped up its work in 12 legislative days. During that time, many difficult decisions had to be made.

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Here are the highlights leading up to the introduction and passage of the budget bills in order to make up for the state's revenue shortfall.

First, the General Fund financial status had deteriorated significantly since the end of the 2009 regular session that ended in June.

At the end of the current biennium (two-year budget), the current estimates showed a projected balance at the end of fiscal year 2010-11 that was $334 million below the minimum reserve and on track to grow to $1.2 billion below the minimum reserve by 2012.

State revenue is roughly 16 percent below what would be experienced in an average two-year period.

The Appropriations Committee proposal called for a total of $337 million of budget actions over the two-year biennium of which 20% ($66.8 million) is from fund transfers and 80% ($270.2 million) from reducing new appropriations as well as reducing reappropriated balances carried forward from the prior biennium.

While there was a significant shortfall projected for this biennium, the current cash position, plus the Cash Reserve Fund and proposed budget reductions, provided adequate cash flow to pay the state’s bills during the next two years.

Spending cuts

Of the spending cuts over the two-year period, $56.7 million comes from the across-the-board budget cuts. In general these across-the-board cuts were 2.5% for FY2009-10 and 5% for FY2010-11.

Certain areas were excluded in the cuts in one or both years.

-- TEEOSA (school aid);

-- Special Education;

-- Medicaid;

-- Kids Connection;

-- Homestead Exemption;

-- Behavioral Health Aid;

-- Developmental Disability Aid;

-- Health Aid;

-- Aid to Aging Programs;

-- Health and Human Services care and treatment facilities;

-- Nebraska State Patrol;

-- Corrections;

-- Juvenile Services Aid;

-- HHS protection and safety; and

-- State Emergency Fund and Public Safety Communications.

The across the board cut for the court system was 1.5% (FY09-10) and 3% (FY10-11). The University of Nebraska and State Colleges will see cuts of 1.8% this year and 3.4% in 2010-11.

Commodity checkoffs were spared any cuts – about $1.2 million. These funds have been accumulated from farmers to be used for certain expenditures – not to balance General Funds.

Also spared was about $330,000 from the Nebraska Brand Committee.

Changes in the state aid formula allows aid to remain flat next year instead of increasing. This is a $32 million savings to the state.

Prior to the debate on the budget bills, Sen. LaVon Heidemann, Chairman of the Appropriations Committee, held a detailed briefing for all senators and their staffs explaining every item proposed in the committee’s package of budget bills.

Many questions were raised and answered. Everyone was well-informed when the bills were discussed on the legislative floor.

Making the decisions on solving the budget deficit were not easy and everyone in state government shared in the pain – from the largest agencies to the smallest, and including the Legislature.

We are definitely moving towards a more efficient government…trying to do the same job with less. It’s a delicate balance.

Sen. Tom Hansen, a Lincoln County rancher, is a member of the Legislature’s Appropriations Committee.