Mixed reactions to Heineman’s budget proposals

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January 14th, 2011

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Lincoln, NE – People affected by Governor Dave Heineman’s budget recommendations, released in his annual State of the State speech, Thursday, had reactions ranging from enthusiasm to caution and concern.

2011 State of the State address by Gov. Dave Heineman (Photo courtesy State of Nebraska)

The governor said Nebraska is doing well in spite of its budget challenges. He proposed holding funding for the higher education steady over the next two years. University of Nebraska President JB Milliken said in normal times, that would be disappointing, but these are not normal times. And Milliken was enthusiastic about Heineman’s endorsement of $25 million towards renovating the 4-H building and building a research and development building on the former State Fairgrounds in Lincoln.

“Over time, successful development of this phase one, with an initial investment from the state of $25 million,” Milliken said, “will result in many multiples of investment from the private sector in the innovation.”

Heineman is also proposing to hold state support for K-12 education constant, but with the ending of federal stimulus aid, that could mean a loss of up to $140 million in overall aid to schools next year. That could be partially offset by $59 million in another federal appropriation, but schools would be still down $81 million. Sen. Greg Adams of York, chairman of the Education Committee, said that could have significant effects.

“Collective bargaining can be affected, property taxes can be affected, employment can be affected, programs can be affected, all kinds of things,” he said. “But I’m convinced the schools will try to hold everything together as best they possibly can before they have to take those kinds of measures. I certainly hope they do.”

The governor’s budget also calls for a 5% cut in the fees paid to many health care providers reimbursed through Medicaid. Dave Buntain, a lobbyist for the Nebraska Medical Association, said that cut could make it harder for people on Medicaid to get care.

“Right now the system is such that reimbursement rates under the Medicaid program are well below what providers received from other payers,” he said. “And to ask providers to swallow an additional 5% cut will be, I think, detrimental to the providers themselves and could affect access.”

Buntain said a cigarette tax increase could offset the need for Medicaid cuts but Heineman opposes such a move. The state’s revenue forecasts could still be revised upwards or downward before lawmakers make final budget decisions this spring.

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