Budget package clears first round
Following two days of debate, lawmakers gave first-round approval March 11 to three bills comprising the Appropriations Committee budget adjustment package.
The state budget is structured on a two-year basis, with the budget enacted during legislative sessions held in odd-numbered years. Sessions in even-numbered years are used to make adjustments to the state’s $8 billion budget.
The committee’s funding recommendations would result in an increase in general fund appropriations of approximately $28,000 over the two-year budget. It would leave approximately $91.5 million above the state’s required minimum reserve available to fund bills passed this session.
Appropriations Committee chairperson Omaha Sen. Heath Mello said the adjustments would retain a growth rate of 5.5 percent and address long-deferred priorities while maintaining a strong cash reserve.
“There’s an overarching policy that the Appropriations Committee took this year to help set the stage for what we feel is responsible, cautious [and] conservative fiscal policy for years to come,” he said. “That is protecting and being very judicious with the use of our cash reserve fund.”
Mainline budget bill
LB905, introduced by York Sen. Greg Adams on behalf of the governor, would make various deficit appropriations. Following a failed attempt to divide it into component parts, an Appropriations Committee amendment was adopted March 11 on a 34-0 vote and replaced the bill.
Among other provisions, the amendment included the following adjustments:
• $25 million to the state’s Property Tax Relief Fund;
• $14 million to address issues in the state’s corrections system;
• $10 million to the Job Training Cash Fund;
• $5 million to provide service to individuals on the developmental disability waiting list; and
• $2.5 million for the early childhood grant program.
During debate March 10, Kearney Sen. Galen Hadley offered an amendment that would have added an additional $20 million to the state’s Property Tax Relief Fund. He said property taxes were the number one issue heard by the Legislature’s Tax Modernization Committee during hearings over the summer.
Hadley said the credits paid by the fund, founded in 2007 to provide tax relief, have lessened in value to property owners over the years. The fund should be increased, he said, to make the credits more closely reflect their original worth.
“We haven’t done anything to really help the property taxpayers of Nebraska,” Hadley said, “and I think it’s time we do so.”
Lincoln Sen. Danielle Conrad opposed the amendment, saying the minimal amount of relief an additional $20 million would provide to property tax payers would not be worth other cuts to programs and services that might result.
“That gives the average taxpayer an additional $10 to $12 dollars [a year],” she said.
Sen. Kate Sullivan of Cedar Rapids also opposed the amendment, saying property tax relief should not come at the expense of other programs.
“We heard that property tax relief was important, but we also heard that Nebraskans want quality education and they want the state to put more aid into funding our schools,” she said. “Therein lies the challenge; therein lies the balancing.”
Columbus Sen. Paul Schumacher supported the amendment, while acknowledging that the average property taxpayer would see a minimal benefit.
“Right now … this is simply a message to our taxpayers that we hear you,” Schumacher said.
The amendment failed on a 20-18 vote, five votes short of adoption.
Papillion Sen. Bill Kintner offered an amendment that would have removed $2.5 million proposed for four fountains in the State Capitol courtyards that were part of the Capitol’s original design but were never constructed. The funding originally was proposed in LB797, introduced by Omaha Sen. John Nelson.
Kintner said the fountains are not a necessity and should not be funded if the state is unable to provide tax relief to Nebraskans.
“This is clearly a want; it’s not a need,” he said, adding that corporate sponsors could be found if senators insisted on installing the fountains.
Nelson opposed the amendment, saying it is important to add the fountains as the building’s final design element and complete the architect’s vision for the Capitol.
“I can’t think of a better way and a more long-term way of leaving our mark on this building,” he said. “The fountains will be a symbolic representation of the importance of our state’s water … which is otherwise unrepresented in the building’s design.”
The Kintner amendment failed on a 5-27 vote.
Hoskins Sen. Dave Bloomfield offered and later withdrew an amendment that would have removed a $60,000 appropriation to pay the state’s Midwest Interstate Passenger Rail Compact dues. The funding originally was introduced as LB891, sponsored by Fullerton Sen. Annette Dubas, and was amended into the budget proposal.
Mello opposed the amendment, saying the state has an obligation to pay its dues, which have been in arrears since 2009.
“The Legislature has a financial obligation to pay its [dues] as a statutory member of this compact,” Mello said.
Dubas also opposed the amendment, saying that as long as the state is a member of the compact, the dues should be paid. She said concerns regarding the value of the state’s membership in the compact is a separate question.
“What we need to decide right now is: do we pay our bills?” Dubas said.
Lawmakers voted 37-2 to advance LB905 to select file.
Additional provisions
Three additional components of the budget adjustment package also were advanced March 11.
LB906, introduced by Adams at the request of the governor, would make transfers between funds and create and eliminate funds. An Appropriations Committee amendment, adopted 31-0, became the bill.
Among other provisions, the amendment would create the following funds and make the following transfers:
• $21 million to the Water Sustainability Fund;
• $15 million to the Game and Parks Improvement and Maintenance Fund; and
• $12 million to the Vehicle Title Registration System Replacement and Maintenance Cash Fund.
Mello said the funds and transfers represent important priorities for the state, including creation of a new vehicle title registration system and assistance to the Nebraska Game and Parks Commission for deferred maintenance projects.
The bill advanced on a 31-1 vote.
LB130, introduced by Mello, would make transfers from the state’s Cash Reserve Fund. An Appropriations Committee amendment, adopted 35-0, replaced the bill.
The amendment would transfer $50 million to the General Fund and $14.5 million to the Nebraska Capitol Construction Fund to begin work on upgrading the State Capitol heating, ventilating and air-conditioning system.
Mello said the bill reflects the committee’s desire to use the cash reserve only for one-time items and not for ongoing obligations. He said the approach would maintain a strong cash reserve in order to weather future economic downturns.
Senators advanced the bill 36-0.
Finally, LB949, introduced by the Business and Labor Committee, would approve claims against the state and agency write-offs.
Omaha Sen. Steve Lathrop, chairperson of the committee, offered an amendment that was adopted 33-0. It added a $2 million claim made by the family of Joyce Meeks, who was killed in a vehicle accident by an inmate authorized to drive a state vehicle.
Following the 33-0 adoption of a committee amendment, which added three claims that were settled or adjudicated after the bill was introduced, senators advanced LB949 to select file on a 34-0 vote.
