Governor Pete Ricketts announced his plans to narrow the estimated $900 million gap in the state budget through June of 2019.
It includes a four percent cut for most state agencies. But the Governor's plan protects funding for essential programs - including K12 education, the Department of Corrections and some Health and Human Services programs.
Governor Ricketts addressed concerns with this fiscal year at the Governor's Budget Recommendations hearing Thursday morning. He emphasized a balanced budget without raising taxes.
"Well, what this demonstrates is that we have to do is make tough decisions, so that is something in any budget you're going to have to do," said Governor Pete Ricketts. "And that we've always got opportunities to be able to improve on how we provide services."
The revised 2016-2017 budget would pull $92 million from the cash reserve with a total of $276 million in adjustments to fill the hole between revenue and current appropriations.
In the last fiscal year, tax receipts were $95 million below what was forecasted.
But not all agencies are affected equally. The Governor's plan protects funding in some areas like education, the Department of Corrections and the Department of Health and Human Services. Funding for child welfare, developmental disabilities aid and veterans' homes would be protected.
"In child and family services, for example, we actually added more money into the budget to help their budget," said Governor Ricketts. "So, there were areas that yes, absolutely some places we did the four percent across the board. "Some places got no cuts to them, some people actually got more money."
Disappointing turns in the agriculture sector contributed to the downturn in revenue.
Sales tax from online spending is expected to contribute to revenue. Revenue from an Amazon sales tax is expected to bring in about $11.2 million in the next five months.
This Summer, the Governor asked agencies to look at spending and see where they could tighten the purse strings. In October, Governor Ricketts recommended a hiring freeze and travel ban on non-essential out-of-state travel.
The Fiscal Year 2016-2017 Budget Adjustment Proposal was introduced Thursday. The next step -
"It will go to referencing and hit Appropriations next Monday," said Sen. John Stinner, Chair of the Appropriations Committee. "We'll schedule it for hearing and there's about a seven day period."
The Governor plans for the 2016-2017 budget adjustments be brought to the full legislature by the first week of February.
Governor Ricketts will address the 2018-2019 biennial budget revision January 12th during the State of the State Address.
