- Associated Press - Thursday, July 14, 2016

LINCOLN, Neb. (AP) - Gov. Pete Ricketts has ordered Nebraska agencies to tighten their spending after the state collected $95 million less than expected in the last fiscal year, officials announced Thursday.

Ricketts said he has directed department leaders to look carefully at whether new hires are necessary, limit travel when possible and delay hardware and software purchases.

The state will also reduce the allotment of money it distributes to state agencies by 1 percent each quarter, unless an agency can show the money is needed. Instead of getting 25 percent of their total annual budget every three months, agencies will only receive 24 percent.

Ricketts said it wasn’t necessary to call a special legislative session, which would let lawmakers adjust the state budget. The state had been projected to collect about $4.4 billion during the fiscal year that ended June 30, but the total was closer to $4.3 billion.

“This is not a crisis,” Ricketts said at a news conference. “This is what we get paid to do, to manage our budgets.”

Nebraska State Tax Commissioner Tony Fulton said a slowing agricultural economy and lower commodity prices contributed to the shortfall.

“It’s too early to tell” whether the downturn will continue, Fulton said.

State Budget Administrator Gerry Oligmueller said the state’s response to the shortfall is similar to budget crunches Nebraska has faced in the past.

“You look for ways to save, to become better stewards of tax dollars,” he said.

Ricketts said certain agencies, such as the Department of Correctional Services, will still have the flexibility to hire new employees as needed. That department has faced numerous problems in recent years including a high-profile escape and prison riot, and a state employee union has blamed many of the issues on a lack of staffing.

“What we’re telling people is they have to manage their budget,” Ricketts said.

A memo from the governor to state agencies said department leaders should give priority to travel “necessary for the safety and protection of our citizens” and consider video conferencing and web meetings in other cases. Technology purchases should be limited to those that maintain services or help the state run more efficiently, the memo said.

It also suggests that agencies join forces with local governments on delivering state services.

Ricketts said he requested that independent state agencies consider lowering their fees in hopes of helping stimulate economic growth in the state.

Sen. Heath Mello, chairman of the budget-focused Appropriations Committee, said agencies were asked last month to submit a list of potential cuts totaling 8 percent of their budgets so that lawmakers and the governor know where they can trim.

“I believe this unforeseen revenue shortfall requires all state agencies to begin reevaluating all budget priorities,” said Mello, of Omaha.

Renee Fry, executive director of the OpenSky Policy Institute, a tax policy think tank, said the downturn shows why it’s important for policymakers to proceed cautiously with the budget.

“This also highlights the need to maintain a strong cash reserve to help protect our investments in our schools, roads and other vital services,” she said.

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