Every successful organization and household has to manage a budget. Our farmers and ranchers work to control the cost of inputs so that they operate profitably when it comes time to market their crop. Families watch their spending so that they can meet their household needs. Our Main Street job creators monitor their bottom line so they can deliver value to their customers, attract quality talent to their organizations and grow opportunities.
Just like Nebraska’s ag producers, households and job creators, the state must operate within a budget. Over the past few years, the Legislature and I have successfully worked together to cut the rate of growth in state spending by 90 percent, from 6.5 percent before I took office to 0.6 percent for our current budget.
Right now, my team is preparing for the 60-day legislative session, which will begin early next month. This session, balancing the state’s budget will be at the top of our to-do list. While revenues have started to grow again, a reduced revenue forecast means that the Legislature and I will be working together to modify and reduce our budget in the upcoming legislative session. In October, the Nebraska Economic Forecasting Advisory Board (Board) revised revenue projections downward by $100 million for fiscal year 2018. For fiscal year 2019, the board revised projections downward by $123 million. The board’s actions will require us to revise our budget in the upcoming session.
Nebraska’s time-honored tradition of balancing the budget is key to our state’s financial health and has earned us high marks nationally. Nebraska has a AAA credit rating. We consistently rank high nationally for the lowest debt supported by state taxes per capita. In addition, the Mercatus Center at George Mason University ranks Nebraska sixth-best in the nation for fiscal condition.
This year our budget work will help maintain taxpayer confidence. As I prepare for session, three principles have guided my budget-making process. First, my budget will rely on current revenues. Nebraskans expect the state to live within its means, and I will not support raising taxes. Second, any budget that is passed must be balanced. Third, the budget must restrain government spending to create a more effective and more efficient state government.
In January, I will unveil my budget recommendations in my State of the State address. In preparation for this, I have been working with my team to control spending and prepare adjustments to the budget. In October, I renewed budget restraint directives to state agencies. This included slowing the allocation and use of state appropriations, preparing budget reductions and continuing other spending restraint measures.
One of those measures that has been helping us manage the budget is a hiring freeze I put in place over a year ago. Since October 2016, we have reduced the number of people working in my agencies by almost 500, which is approximately 3.5 percent of our personnel. To achieve these reductions, we have reviewed the need for positions as they have come open through retirement and attrition. Exceptions have been made for positions critical to protecting public safety and for service delivery. In addition to reducing headcount, we’ve also eliminated over 1,500 vacant positions.
While we’ve been reducing our headcount, my administration has also been working to deliver a higher level of service. Like private-sector businesses, the state of Nebraska is learning to do more with less. To achieve this, we have trained over 12,500 of our teammates in process improvement skills. This is helping our agencies provide services such as delivering professional licenses more quickly and speeding up processing tax credit applications. It also helps us reduce wasteful paperwork and red tape.
While I have been preparing budget reductions for consideration by senators, I have also been working with senators on tax reforms that can fit within the budget. Tax relief continues to be one of the top priorities I hear about from Nebraskans. While the revenue picture limits our options for the state’s work in the area of tax relief, we are collaborating on innovative ways to deliver relief. As I work on proposals for the upcoming session, I am following two standards: First, we are not going to increase taxes on Nebraska’s families and ag producers. Second, whatever change we make must fit into the budget.
During the upcoming session, it’s important to remember the words emblazoned on the side of the State Capitol: “The Salvation of the State is Watchfulness in the Citizen.” In the coming months, I encourage you to be watchful over the work on the state budget and efforts on tax reform. Make sure that your senator hears your priorities. You can find your senator’s information by visiting www.NebraskaLegislature.gov.