Projections up, veto down, redistricting crossways


April 29th, 2011

Lincoln, NE – State revenue projections are up, a governor’s veto goes down, and legislative redistricting plans have senators crossways with each other. Fred Knapp has all the angles in this Capitol update.

This week at the Capitol: The Governor's first veto of the year was handily shot down by lawmakers, who also got an unexpected cash infusion from the revenue board, all while battling boundaries.

The state will collect $233.5 million more than previously projected over the current and next two fiscal years. That’s the word from the Economic Forecasting Advisory Board, which revised its official projections. Board member Tom Henning, president of a food distribution company in Kearney, said manufacturing, tourism, construction and agriculture are all doing well.

“Theres not a lot of stress out there, which I think is good,” he said. “And I think as far as our economy is concerned, what we’re looking at for the next two, three years I think is — we can be fairly optimistic about.”
Board member Steve Ferris, a Lincoln financial consultant, offered a note of caution.

“Gas prices, food prices, you just don’t know where that’s going to take you,” he said. “My only concern right now is being drawn into being overly optimistic, because I’m somewhat optimistic.”

The increase in the forecast comes as the Legislature prepares to begin debating the next two-year state budget on Monday. Sen. LaVon Heidemann of Elk Creek, chairman of the Appropriations Committee, said lawmakers should not spend any more money than the committee has recommended.

“It would be my intention to stay where we’re at,” he said. Heidemann said the Legislature should take the extra money from the forecasting board and “park it in the cash reserve.” Then, he said, “See what the October forecasting board does to us. Next year, we’ll have more time to responsibly go back in and see how much money we got, and go back agency to agency and see what we can do at that time.”

Heidemann pointed out that the amount of school aid for next year, nearly one-third of the budget, has already been set. And he suggested it would be unfair to go back in and restore other cuts the committee has recommended, such as cuts in the rates paid to Medicaid providers. Governor Dave Heineman, in a written statement, echoed Heidemann’s call to put any extra revenue toward rebuilding the state’s cash reserve. But Lincoln Senator Danielle Conrad, also a member of the Appropriations Committee, said that’s just one option.

“I hope it provides a lot of food for thought,” she said, about doing a better job to ensure “we take care of all our important state obligations.” Conrad added, “I think we’ll look forward to a robust debate on that when the budget hits the floor next week.”

In legislative floor action, senators voted 44-0 to override the governor’s veto of a nursing home tax. Heineman had said the proposal, which is designed to attract more federal matching funds, amounted to raising taxes and an accounting gimmick. Senator Kathy Campbell of Lincoln provided the counterpoint.

“I certainly do not feel that LB600 is a tax increase,” Campbell said. “A little overlooked fact in the bill is that for every dollar assessed for a facility, that dollar is returned to the facility, as well as an additional dollar and a half from the federal Medicaid fund.”

The nursing home industry supported the proposal.

And finally, public arguing began on over legislative redistricting. Omaha Senator Scott Lautenbaugh, a Republican, proposed a plan that would readjust boundaries in south Omaha to create a district that would have a majority of Hispanic voters. That led Omaha Sen. Heath Mello, a Democrat, to complain that Lautenbaugh was trying to “pack” largely Democratic Hispanic voters into one district to dilute their overall influence. The redistricting discussion is scheduled to expand to include redrawing congressional lines next week.

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