As was highlighted in a recent editorial by the Omaha World-Herald, Nebraska lawmakers are about to debate several priority bills that would have a fiscal impact that far exceeds the $209 million lawmakers have to enact new legislation this session.
OpenSky analysis shows that priority bills advanced by the Revenue Committee — many of which are tax reductions — account for the vast majority of the potential fiscal impact. These bills would alone combine to deplete state revenues by about $297 million in the upcoming budget cycle and $567 million in the following biennium, according to the bills’ fiscal notes. The cost of the measures would then likely grow to exceed $365 million annually once they are fully implemented.
In comparison to the potential impact of the revenue bills, all other priority measures this session would cost the state an estimated $122 million in the next biennium and then have an ongoing fiscal impact of just over $32 million. Of these ongoing measures, the largest fiscal impact ($20 million annually) would come from LB 388, which would expand broadband access in Nebraska, a priority of the Governor that OpenSky supports. (See a comparison of the revenue priority measures and all other priority measures.)
Many of the measures advanced by the Revenue Committee would be ongoing obligations while most other priority measures would be of limited duration. This is important to note given that the state’s fiscal health is currently being propped up by a temporary influx of coronavirus relief funds and other federal dollars.
Relying on a short-term influx of federal dollars to pass ongoing expenditures like those advanced by the Revenue Committee would likely put lawmakers in a bind once the federal money is depleted. Conversely, using such dollars for one-time expenditures like those proposed in some other priority measures or for purposes like replenishing our cash reserve can help address state needs in a way that maintains Nebraska’s fiscal health.