LINCOLN — A preliminary budget report issued Wednesday by a legislative committee leaves open the allocation for the University of Nebraska system, an allocation that has been criticized as failing to keep up with inflation.
The university system had requested a 3% annual increase in its budget, but new Gov. Jim Pillen’s budget recommendation came in below that.
Pillen, a former member of the NU Board of Regents, had penciled in a 2% increase for each of the next two fiscal years in his proposed budget.
State Sen. Robert Clements of Elmwood, who chairs the Legislature’s budget-writing Appropriations Committee, said the committee wanted to hear from university officials before making a final budget recommendation.
The university’s budget hearing with the committee is scheduled March 3.
Clements said the committee’s decision will likely fall between 2% and 3%.
Wednesday’s “preliminary report” on the state budget from the Appropriations Committee was the first hint of where the state budget might land.
By and large, it followed the governor’s proposals, beyond leaving open later adjustments for the university system, state corrections and Health and Human Services.
While the governor proposes a budget, state lawmakers get the final say after taking testimony from state agency officials and the public, and after debating budget bills over three rounds of consideration.
Pillen has proposed a spending increase of 1.3% over the next two fiscal years, and instead focusing his allocations on a $1 billion fund to finance increased state aid to K-12 schools, cuts in income taxes and construction of a new prison and the Perkins County Canal.
Keeping up with inflation
Some groups, including the OpenSky Policy Institute, have questioned whether the 2% spending increases for NU would allow its campuses to keep up with inflation.
The state is sitting on an unprecedented amount of excess tax revenue, as well as a $1.8 million cash reserve, prompting a slew of proposals to cut taxes, increase tax credits or invest those funds in workforce or economic development programs.
Clements said he does want to keep the cash reserve at about $1.3 billion, which is above the $900 million that has been recommended to cover two months of state expenses.
The senator, a banker who worked through the farm crisis of the 1980s, said he wants to protect against a possible economic downturn.
“I got more conservative after that,” Clements said.