After highlighting the need for property tax relief and tax incentives, Governor Dave Heineman stressed the importance of higher education institutions in Nebraska increasing cooperation with one another and increasing enrollment numbers.

"The University of Nebraska is a key component to Nebraska's future, and they must redefine their priorities to reflect the education and financial challenges of the 21st century," Heineman said.

The governor said increases in enrollment would help higher education institutions with Nebraska’s fiscally tight budget.

Ron Withem, University of Nebraska director of government relations, told the Daily Nebraskan that increasing enrollment is one area in which the university and the governor see eye to eye. He said the Nebraska Board of Regents has set a goal to increase enrollment by 1.5 percent annually.

The governor recommended the university receive $10 million to partially fund a $22-million project that would replace the university's student information system.

Walter Weir, chief information officer for the University of Nebraska, told the Daily Nebraskan the system is the main way to connect the university and its students.

Weir said the system oversees class registration, housing information, degree audits, recruiting and administration of financial records, among other things.

"It is absolutely critical to carrying out the mission of the university," he said.

Tax cuts
Heineman suggests pumping $75 million more into a property tax credit program approved last year. This would save homeowners about $151 for every $100,000 of property value next year, an increase from the current $83.

Tax breaks
The breaks he proposes would total about $13 million annually beginning in about five years. Companies would have to create at least 75 jobs that pay at least 150 percent of the state average wage or 200 percent of the average wage in the county where the business is located, whichever is greater.

Spending
State agencies wanted to increase their appropriations by $40 million, but most of them were rejected. Heineman proposes a net increase in spending of $8.3 million. Big-ticket items include about $15 million for roads to offset the sting of reduced federal funding and a $10 million down payment on a massive computer system for student affairs that would be shared by the University of Nebraska and state colleges.

Cash reserve
Heineman urged lawmakers not to spend the state's rainy-day fund, which could hover around $500 million, a record. State budget trends suggest the state could be entering a period of slower-than-average revenue growth. At the same time, there are concerns about a national economic slowdown.

State aid for schools
Estimates are the state may have to give $53 million more to schools than expected. Heineman says he's still searching for answers why, but thinks it is a combination of higher spending by school districts and a formula for state aid that he says is too complicated and unstable.

The Associated Press and the Daily Nebraskan contributed to this story.
To view the Governor's State of the State speech, click here