The Legislature should focus on one-time investments in areas like economic development, workforce, broadband and health care access as it decides how to spend an influx of federal American Rescue Plan Act dollars expected over the next couple of years, Appropriations Committee Chair John Stinner said during a recent OpenSky webinar.
Enacting ongoing spending obligations, on the other hand, could be problematic for future legislators because it isn’t clear how much of the state’s growing revenues are attributable to federal stimulus versus a strong state economy, Stinner said.
State revenues grew at a record 14.7% in FY 21 over the prior year; however, at least some of that is the result of over $21 billion in federal funds allocated to the state over the course of the pandemic, he said. The $21 billion, Stinner said, is a “huge number” and “we’re still trying to figure out what this means.”
Based on historic trends, however, the state should currently be experiencing a down year following a year with such high revenue growth, Stinner said.
“Interestingly, in this forecast … we actually have a 2.9% and a 3.2% increase (in each year of the current biennium) — not negative,” he said. “It really demonstrates the carryover of stimulus as it relates to the biennium.”
Sen. Stinner said that after the most recent revenue forecast, which was revised on Oct. 29, the Legislature will have around $300 million in revenue to pass new legislation in the next session but he noted that the body may need to use some of that money to raise state wages in areas like health care and corrections to help increase retention in these critical areas.
That means lawmakers could, in actuality, have about $200 million for new legislation, Stinner said, and then again cautioned against using those dollars for ongoing expenditures. Instead, he encouraged lawmakers to consider one-time investments in items such as internship programs, broadband service and expanding the number of acute-care beds in the state.
The discussion with Sen. Stinner, which can be viewed here, is part of a series of webinars OpenSky is hosting this fall. The series continues on Wednesday as Michael Griffith of the Learning Policy Institute discusses how K-12 funding systems can impact poverty during a session moderated by Sen. Lynne Walz, Chair of the Legislature’s Education Committee. The webinar will start at 2 p.m. Register to attend here.
On Thursday, Sens. Eliot Bostar of Lincoln, Curt Friesen of Henderson, Suzanne Geist of Lincoln and Terrell McKinney of Omaha will participate in a panel discussion titled, “What I Wish I’d Known as a Candidate: A Discussion with Past and Present Nebraska Lawmakers.” The panel starts at noon and is reserved for those who are running for or considering a run for Legislature. Register to attend here.
More information about additional Fall webinars will be announced soon!