When Nebraska legislators gathered in Lincoln in January, they faced one big job that had to be finished: Writing the state budget.
The Legislature last week completed that work, sending Gov. Pete Ricketts a plan that balances spending with revenues.
Lawmakers have even gone a step further, building up a healthy savings account. Thanks to responsible budgeting over the past several years, the state should have a cash reserve of about $718 million on June 30, 2016. That "rainy day" fund will provide an important cushion when the economy eventually turns from boom to bust.
Still, not everyone will be satisfied when lawmakers adjourn.
Each legislative session, requests for more spending include everything from school aid to prisons to social services. Good, often emotional arguments are offered for the additional dollars being sought. Making the difficult decisions on which programs get more and which don't is an area where the 49 state senators — and particularly those on the budget-writing Appropriations Committee — earn their pay.
But the importance of balancing needs and wants with available revenue can't be overstated. That is reflected in a new report that finds nearly half the 50 states struggling to get the job done.
Even with the U.S. economy at its healthiest since the Great Recession, an Associated Press analysis of statehouse finances nationwide finds at least 22 states dealing with projected budget shortfalls. The number of states facing budget gaps prompted Standard & Poor's Ratings Service to call the trend a sort of "early warning."
"After all, if a state is grappling with a budget deficit now, with the economic expansion approaching its sixth anniversary, what will be its condition when the next slowdown strikes?" credit analyst Gabriel Petek wrote.
The causes for these budget gaps are many. In some states, revenue growth has been stagnant, making it difficult to keep up with growing populations and higher costs for health care and education. Other states have been hurt by a steep decline in oil prices, or they saw efforts to promote growth with tax cuts fail to work as anticipated.
Alabama faces a $290 million shortfall. Some projected cuts would create a $27 million hole in the state's court system, forcing more than 600 layoffs and leaving courts without staff to send jury notices, monitor juvenile delinquents, process protection orders and collect and distribute child support payments.
While the Census Bureau recently reported that total state government tax collections in fiscal year 2014 rose 2.2 percent, a fourth straight year of increases, 17 states saw declines in their tax revenues. Alaska had the biggest drop, $1.7 billion. The state, which leans heavily on oil revenue, projected a $3.2 billion budget shortfall.
In Illinois, lawmakers are trying to figure out how to close a $6 billion shortfall, largest in the nation, while also struggling to remedy $105 billion — with a "b" — in public pension debt.
In Kansas, Gov. Sam Brownback and lawmakers faced deficits after aggressive tax cutting. That led them to reduce school funding this spring, the AP reports.
In Nebraska, meanwhile, the Legislature gave final approval to an $8.7 billion, two-year state budget designed to fund essential needs and provide additional money for the state's Property Tax Credit Fund, education and corrections.
The budget kept the state's overall spending increase to the 3.1 percent mark laid down by Gov. Ricketts.
This combination of diligent work and prudence is testament to the state's longstanding pay-asyou-go philosophy.
Not all Nebraskans will be satisfied with every decision state senators have made. But looking at the 22 states struggling to climb out of budget holes, Nebraskans can take satisfaction that the state lives within its means.
Unlike states facing budget gaps, Nebraska has built up a 'rainy day' fund.