Erdman Edition: Major Issues Before the 100th Legislature, Second Session

During this Legislative session, we face an exciting opportunity to address important issues such as the state budget, addressing the formula for state aid to schools, and finding viable alternatives to fund our roads, among others.

Passing a balanced state budget is the Legislature's main responsibility during a session. Based on current spending and anticipated revenues, it is projected that the state will end the current two-year budget cycle with nearly a $500 million surplus over the 3% minimum reserve. However there are forecasts which project a deficit in the next two-year state budget because spending will exceed projected tax receipts. Prudence requires that we strictly scrutinize ongoing budget commitments as well as any new programs because the ability to balance future budgets depend on our actions now. As I have done since I have been in the Legislature, I believe it is vital to hold the line on state spending while pursuing tax relief. Tax relief is a vital tool to ensure a growing economy which enhances the ability of the state to provide necessary services without overburdening our residents. In addition to the tax relief provided by the Legislature last year, the Governor has proposed an additional $75 million in direct property tax relief. I am encouraged that tax relief will again be part of the agenda.

Another issue that touches all Nebraskans is the stability and sustainability of Nebraska's state aid to schools. This year, the state aid formula will require $53 million dollars beyond what was previously estimated and the cost of the state aid program will increase an additional 17.5% next year. If double digit annual growth in the cost of state aid and Medicaid continue, these two programs alone will easily outpace the growth in tax receipts by fiscal year 2013-14. If these trends continue, the entire state general fund budget will be completely consumed by these two items alone within 20 years.

Funding for Nebraska's highway system is another issue we will discuss. As the costs of construction and maintenance have increased dramatically, traditional revenue sources including federal funds have not kept pace. Several proposals have been offered from one-time transfers, to make up for recent shortfalls to increases in the gas tax to raise additional revenue. Other proposals include a wholesale percentage tax based on the average wholesale price of gasoline similar to a sales tax. This would increase state gas tax revenues when the price of gas increases. I did not support an increase in the gas tax last year and I am not inclined to support a bill that adds to the increasing burden fuel prices place on Nebraskans.

Hopefully this gives you an idea of a few of the issues before the Nebraska Legislature. Obviously this is not a comprehensive review of all issues, which would have included water, cloning, death penalty, immigration reform, and school district organization.

It is an honor to represent and work with you to advance the principles that make Nebraska a better place for our families. It is my hope that you will continue to be involved in your Legislature. Please contact me, toll free at 1-866-800-7445, by mail at: State Capitol, District 47, PO Box 94604, Lincoln, NE 68509, or by email at perdman@leg.ne.gov.