January  2004      Vol. 13, No. 1  REAP HOME PAGE  A publication of the Center for Rural Affairs    
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Budget Shortfall Looms over Nebraska Legislature
The regular session of the Nebraska Legislature begins January 7, 2004 and concludes in mid-April. Funding for essential microenterprise services has paid major economic development dividends in the state and is urgently needed across rural Nebraska.


Nebraska and a number of other states face unprecedented budget woes. The current two-year budget, which began on July 1, 2003, included $344 million in tax increases. The economic forecasting board, which meets three times a year, uses economic and other data to predict state tax revenue.

October estimates showed the state would collect $200 million less than projected between now and June 30, 2005. The latest figure calculated by the Legislature’s fiscal office raises that gap to $210 million. These projections clearly show significant problems ahead for Nebraska.

Lawmakers can fill the gap with budget cuts, tax increases, or some combination during the approaching session or by special session. Governor Johanns will release his budget in early January. The Legislature uses the Governor’s plan as a blueprint in forming their proposal.

Microenterprise Funding Is Effective Spending
Nebraska Microenterprise Development Act funds have taken a beating in recent years. Previous state budget cuts slashed half of this funding. It is currently budgeted at $250,000 for the 2004 appropriation. These funds are used by Nebraska-based programs to provide loans, training, and technical assistance to businesses with five or fewer employees. This represents the overall majority of Nebraska’s businesses.

This funding has paid major dividends for economic development efforts in Nebraska. Please see http://crd.neded.org/micro_annual.html to check out the latest data and statistics on the significant impacts of this funding as documented in the Nebraska Microenterprise Development Act Report to the Legislature.

REAP collaborates with many other individuals and organizations and is a member of the Nebraska Enterprise Opportunity Network (NEON), the state trade association for micro-enterprise programs. NEON offers policy and training for microenterprise programs and practitioners. A complete list of microenterprise service providers in Nebraska can be found at http://neon.neded.org .

REAP continues to collaborate with NEON to advocate for microenterprise funding. Activities during the session will again include key Senator visits, letter and phone call campaigns, among other items.

REAP Members the Most Influential Advocates
It is clear that REAP members and other beneficiaries of microenterprise programming carry the greatest voice in advocating for this critical funding. Meetings with your local state senator or letters and/or phone calls are effective means for advocating.

Please contact Jeff Reynolds or your area REAP Business Specialist if you would like to advocate for microenterprise small business development in Nebraska. Your personal story about your business and how REAP was able to help is the best form of advocacy. We can also provide you with key statewide statistics for use in communicating with your senator.

Legislative Timeline
January 7, Unicameral convenes
Mid January, Bill introduced re: agency deficit budget requests and other budget action
Late February, Economic Forecasting Board meets and determines new revenue forecast, which becomes the official revenue estimate for any 2004 legislative budget action
Late February/early March, Look for Appropriations Committee budget action and bills
March/April, Floor debate and votes on budget action

Demand for business development services far outweighs the capacity currently available in Nebraska. Microenterprise Development Act funds are critical to maintaining adequate services and continuing successful startup of businesses and expansion of existing business in this great state. Further, these funds are a potent, cost-effective, economy-growing tool that must be used to their fullest in these uncertain times.

By working together we can keep these vital funds in place – funds that have had such a tremendous impact in the state. Microenterprise development is a core service in Nebraska and a service that must carry on and continue to grow.

 Contact: Jeff Reynolds, REAP Program Director, 402.656.3091 or jeffr@alltel.net .
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