EDITORIAL: Record cash surplus should allow state to pay debts to counties

The good news in Lincoln is that the state cash reserves have burgeoned to a record $574 million dollars. As the state closed the books last week on fiscal 2008, the coffers have collected $100 million more than anticipated.

This happy news arrived a scant four months after the Legislature adjourned amid fears that the cash reserves would be slipping.

Before the announcement was finished, assorted interest groups began lobbying for spending more on their pet projects. The options are simple:

1) Spend it. Finance some one-time projects that have been on the back burner.

2) Save it. The state will not have this economic  boom every quarter.

3) Give it back to the taxpayers.

The 2007 legislative session saw significant tax cuts doled out to taxpayers. Yet, the cash reserves grew significantly, now estimated to be over 16 percent of the $3.5 billion state budget.

Imagine if a typical family gets a significant financial windfall. Their budget suddenly looks different. First thing any family would do is to clean up any debts that were owed. When  the debt is paid off, perhaps a family vacation or a few new pieces of furniture might be in the offing. The majority of it would be socked away for retirement or a rainy day emergency. Frugal, yet common-sense wisdom.

In the case of the state of Nebraska, they should pay off what they owe to counties who incur significant costs while housing state inmates before they are sent to the state prisons. It isn't chump change. In the case of Hall County, the state of Nebraska owes the county over $265,446 through May. The June amount is not available, but it will not be collected either. Since 2001, the state owes Hall County a whopping $937,000. That money would  go a long way in taking care of road repair and other burdens.

We have pointed out this discrepancy for many years. The state legislature and governor have not seen fit to take care of the problem. It is a considerable drain on the state's largest counties at a time when the counties are not allowed to accumulate significant reserves. They try to simply break even.

As for the cash reserves, there may be a project or two that can be funded with a portion of the surplus. For example, the state's infrastructure and roads are in trouble and need an infusion of immediate cash. The needs of education and health care are always enormous. It may be a good time to invest in alternative energy incentives.

A stringent look at shedding state taxes is again warranted in the face of the reserves. Keep more money in the taxpayers' checkbooks.

When the dust settles, hopefully the legislature will have paid its obligations to the counties, a few projects get off the drawing board and the legislature will find a way to reduce taxes again. In the meantime, the bulk of the cash reserves should remain intact to be used on that inevitable rainy day. Don't fritter it away.