Gov. Heineman Urges Agencies to Restrain Spending Following Economic Forecasting Board's Project

Gov. Heineman Urges Agencies to Restrain Spending Following Economic Forecasting Board's Project

Gov. Dave Heineman today commented on the Nebraska Economic Forecasting Advisory Board's revision of the state's revenue forecast for Fiscal Years 2007-08 and 2008-09.

The board lowered projections for FY 07-08 tax receipts by $51 million and $75 million for FY 08-09; a total of $126 million.

As a result of the lower projections, the Governor has directed agency heads to scrutinize all spending decisions in an effort to exercise the greatest economy and restraint possible.

Code agency directors have been asked to look for savings in five areas, and independent agencies, boards and commissions are encouraged to implement similar measures for budget reductions.

Departments are encouraged to review personnel vacancies and not fill positions that may be left vacant. Directors are to restrict state employee travel and consider options to use telecommunications options as a low-cost substitute for meetings.

State agencies are also to assess the need for software and equipment purchases and make only purchases that guarantee cost savings or are necessary for delivery of services; review operating costs and adopt alternatives capable of delivering equivalent service to residents; and review timing of grant or aid payments to ensure maximum efficiency

Gov. Heineman said, "Other states are already experiencing revenue shortfalls and as the prospect of a national economic slowdown increases, we need to seriously consider ways state government can prepare to weather a dip in revenue. While our state economy has been very strong in recent years, the forecasting board's latest projections indicate that the rest of this fiscal year and the one to come will present challenges.

"It is clear some adjustments are needed and that is why I've called on the heads of state agencies to find ways to begin conserving money immediately. Today's forecast indicates we will be short $68 million by the end of this legislative session. Nebraska must balance its budget and we need to balance the budget by reducing spending. Raising taxes is not an option."

The Governor sent a letter in advance of today's forecasting board meeting to Speaker Mike Flood, Appropriations Chairman Sen. Lavon Heidemann and Revenue Chairman Sen. Ray Janssen outlining his concerns regarding the impact of a potential economic slowdown in Nebraska.

He hopes to meet next week with legislative leaders to address the budget implications of the forecasting board's projections.

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