LB 1413, the governor’s proposal to transfer $192 million currently held in cash funds to the state’s General Fund, will be the subject of an Appropriations Committee hearing today.
Unlike the General Fund, there are more than 250 individual cash funds across 75 different state agencies. These cash funds are established for specific uses and funded based on fees or charges paid by specific individuals and entities. For example, the Universal Service Fund draws from fees paid on phone bills and is used to improve cellphone service. LB 1413 proposes to transfer $13 million from the Universal Service Fund to the General Fund.
Overall, a $192 million transfer from cash funds to the General Fund would represent 1.8% of General Fund spending over the biennium. An OpenSky analysis shows that the percentage is higher than the amount of cash funds transferred in 2009 and 2017, the last two times when cash funds were transferred into the General Fund for the purposes of preventing a budget deficit when the Nebraska economy was struggling.
Cash fund transfers proposed this year come at a time when the state has a projected $380 million budget surplus, and state revenue growth is projected to be 6.1% this fiscal year. Meanwhile, the projected balance in the Cash Reserve, the state’s savings account for emergencies, is $858 million. Pulling from cash funds at this time would be a shift from the Committee’s historical cash fund policy, in which large-scale cash fund transfers would only happen in times of significant fiscal crisis.
The Appropriations Committee meets at 1:30 p.m. OpenSky will provide updates on X.
Watch livestream of hearing on Nebraska Public Media
Proposal would reappropriate ARPA funds to surface transportation
Another Appropriations Committee hearing will focus on LB 1412, the governor’s mid-biennium reappropriations measure.
As proposed, LB 1412 would reappropriate $87 million of APRA funds for surface transportation. The ARPA funds approved by Congress in 2021 provided Nebraska and other states with a historic influx of federal funding to support public health expenditures, address negative impacts caused by the public health emergency and replace lost public sector revenue.
Separate federal legislation – the Bipartisan Infrastructure Law – allocated funding to states for transportation-related projects. Additionally, the Legislature authorized an audit of ARPA funds by the State Auditor last session, and those findings will help to inform Nebraskans on progress in getting ARPA funds to the projects that the Legislature intended.
Register for Wednesday webinar on ARPA funding
Join OpenSky for a webinar at noon on Wednesday, January 31, with researchers from The Pew Charitable Trusts who will review how the decisions that states made in spending ARPA funds could contribute to – or reduce the risk of – future imbalances in state budgets.
Sen. Wendy DeBoer will get things started with an update on initial findings from the State Auditor’s review of ARPA allocations.