OpenSky Analysis of Proposed Amendment to LB970
Updated March 8th
Proposed Changes to LB970 Still Unaffordable
The most recent figures from the Appropriations Committee and LFO project a $461 million budget deficit for the 2013-2015 biennium, without the tax cuts proposed in LB970.
Passing the tax cuts in LB970 – even as revised – would bring that projected deficit to $678 million, which would constitute 9.1% of the budget, the second-largest budget deficit projected in Nebraska in at least 15 years. This approximately equates to our entire budget for public safety (Corrections, Supreme Court, State Patrol, etc.)
Further, in 13 of the last 15 years, the legislature has finished the session with a deficit projected in the following biennium. Clearly, Nebraska has a recurring revenue adequacy problem. It would be more prudent to address this underlying structural deficit through careful tax and spending reform to improve the adequacy and predictability of the budget. Adding new tax cuts now only exacerbates the problem, setting us up for greater budget woes down the road.
* By reducing the overall budget, LB 970 would also reduce the amount that must be held in reserve at the end of the biennium.
Source: Appropriations Committee Budget Recommendations, March 2012