(Lincoln, Neb.) Video - Gov. Dave Heineman delivered his State of the State address to the Nebraska Legislature today focusing on four priorities: ensuring no tax increases, providing additional funding for K-12 and higher education, preserving services for vulnerable Nebraskans, and maintaining a strong cash reserve fund.

The Governor proposed maintaining tax relief programs enacted during the past four years and continuing the property tax credit program begun two years ago. In FY 2010 and 2011, the program will provide $230 million in tax credits to property owners.

Gov. Heineman said, “Failing to fund this program would be a property tax increase on every home owner in Nebraska. In an economic downturn, increasing property taxes on middle class families, seniors living on fixed incomes, small businesses, and farmers and ranchers is unacceptable.”

The Governor proposed an additional $100 million in K-12 school funding and $16.8 million for special education programs. His budget also includes an additional $25.6 million for the University of Nebraska and a combined $4 million for state and community colleges.

School and college funding accounts for 85 percent of the new spending in the Governor’s budget, and brings the state’s support for education to a record $1.7 billion annually in the next biennium.

The Governor’s budget recommendations include a commitment to preserving a safety net for vulnerable children and families and developing new family support programs for children with behavioral issues.

Working with the Legislature’s Health and Human Services committee Chairman Sen. Tim Gay of Omaha and Sen. Gwen Howard of Omaha, the Governor proposed new services to support children and families dealing with behavioral health challenges. Funding for the proposal totals $5 million a year, achieved through a reallocation of resources within the Department of Health and Human Services budget. The Children and Families Support proposal includes:

• A statewide hotline for families facing a behavioral health crisis available 24/7 and staffed by professionals trained in mental health assessment.

• A family navigator program providing follow-up assistance and one-on-one peer support to families contacting the crisis hotline.

• Providing services to families following an adoption or entering into guardianship of a child with behavioral health challenges. Case management and post-adoption services would be available on a voluntary basis to an estimated 700 families each year.

Gov. Heineman also proposes maintaining a strong cash reserve fund to avoid future tax increases. He designated $200 million for contingent liabilities, including potential water litigation, possible loss of funds for the Beatrice State Developmental Center, and teacher and state employee pension losses due to a declining stock market. The projected cash reserve fund balance at the end of FY 2011would be $300 million.

“We made the tough budget decisions two years ago necessary to control spending, but we must prepare our state for a slowing economy,” Gov. Heineman said. “My budget anticipates no revenue growth in FY 2010 and we are working with state agencies to encourage each department to save money in the current fiscal year. State agencies that conserve funding now will be able to apply their savings toward next year’s budget. Encouraging agencies to ‘save it and keep it’ is a more business-like approach than the past practice of ‘spend it or lose it.’

“Our hard work during the past few years has better positioned us to weather the coming fiscal storm, but state government must tighten its belt just as Nebraska families and businesses are doing. Making difficult but wise decisions today will position our state to emerge stronger when the national economy improves.”

State of the State Address (PDF 51K)