Special Shortfall Session

Nebraska Gov. Dave Heineman called lawmakers back to Lincoln for a special session starting today to tackle the state’s anticipated $334 million shortfall over the 2009-2011 biennium. He also unveiled his own proposals to close the gap.

Most state agencies would cut budgets by 2.5% this year and 5% in 2010, saving $80 million, according to the governor’s office. The state would save $65 million by carrying over previous years’ excess funds in state agency budgets.

Another $37 million would be transferred into the general fund from several other cash funds. Heineman also proposed cutting $154 million in spending from education, provider rates, Medicaid, corrections, and the state police. The education cuts would come in the second year of the biennium, the governor said.

“By maintaining the current-year funding level for this year and next, school districts have ample time to plan for the next school year,” Heineman said. “My hope is that school districts will find ways to reduce spending to limit the impact.”

Nebraska operates under a $6.9 billion two-year budget. Last week the state’s economic forecasting board predicted that revenue would come in about $334 million lower than expected through 2011.

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