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State Sen. Stinner says the state budget will probably have to be adjusted downward

March 1, 2019

LINCOLN — During a Thursday conference call, State Sen. John Stinner of Gering said the state budget would probably have to be adjusted downward after the Nebraska Economic Forecasting Advisory Board released its latest numbers on Feb. 28.

The Forecasting Board provides an advisory projection of general fund receipts to the Legislature. State Senators use the numbers to help hammer out the state budget.

Stinner said he looked at the recommendations from both the Fiscal Office and the Department of Revenue.

“Both of those forecasts are considerably down,” Stinner said. “The average is around $100 million. Over the first three months since the last forecast, we’re down $80 million. So far this month we’re down about $4.6 million. So I’m expecting to have to adjust the budget down by at least $100 million.”

Total projected revenue receipts for the 2018-19 fiscal year were lowered to $4.72 billion, a decrease of $80 million. For the 2019-20 fiscal year, the Forecasting Board projected revenue receipts of $4.87 billion, a decrease of $20 million.

Projected receipts were based primarily on anticipated decreases in sales and use tax receipts, $60 million for fiscal year 2018-19 and $20 million for 2019-20.

The Forecasting Board also projected revenue receipts for 2020-21 would be $4.99 billion, a $10 million decrease.

Stinner, chairman of the Legislature’s Appropriations Committee, said a preliminary budget is ready. However, it will need to be adjusted in light of the projected decrease in state revenue.

Stinner said the Forecasting Board meets next on April 25 and by then the budget will be on the floor of the Legislature for debate. If another down forecast is reported, further adjustments will need to be made from the floor.

In other news from the Legislature, Stinner said he’s been watching the progress on LB 457, which would allow for growing industrial hemp in Nebraska. The bill is consistent with federal law and “makes clear that industrial hemp and resins extracted from industrial hemp are not marijuana under Nebraska law.”

“Industrial hemp is a multi-million dollar crop I think could do some good for western Nebraska, but it has a fiscal note attached to it,” Stinner said.

The Nebraska State Patrol indicated their labs don’t have the necessary equipment to perform the testing to determine whether industrial hemp meets the definition of the bill.

The equipment would cost about $229,000, and with an additional forensic scientist, the cost would be close to $70,000 in fiscal years 2020 and 2021.

Stinner said that costs will be involved, but industrial hemp will bring in revenue for the state in the long term.

Stinner said there are also about four or five competing bills to help reduce property taxes. The one supported by Gov. Pete Ricketts would put a hard cap on expenditures, which isn’t getting much support in the Legislature.

“Starting March 4, several senators that proposed property tax legislation will be meeting to see how we could possibly fund some of these ideas,” Stinner said. “We should have a property tax bill this session but I’m not sure what it will look like just now.”

The Nebraska Legislature is in its 90-day session with the last day scheduled for June 6.