Budget package clears first round
Lawmakers gave first-round approval March 15 to three bills comprising the Appropriations Committee’s adjustment proposal to the state’s $8.7 billion budget.
The state budget is structured on a two-year basis, with the budget enacted during legislative sessions held in odd-numbered years. Adjustments are made during sessions in even-numbered years.
Appropriations Committee chairperson Sen. Heath Mello of Omaha said the adjustments reflect the same priorities that guided the budget package enacted in 2015.
“The decisions in the biennial budget recognize the priorities of both the governor and the Legislature, reflect the values of Nebraskans and respond to the needs of our communities across the state,” Mello said.
Mainline budget bill
LB956, introduced by Kearney Sen. Galen Hadley at the request of the governor, was replaced by an Appropriations Committee amendment, adopted 35-0.
The amendment proposes adjustments to appropriations for state operations, aid and construction programs in the current and next fiscal year.
Mello said the provisions would address a budget gap from the end of the 2015 legislative session—the result of a downward revision in forecasted tax receipts and requests for additional appropriations in state aid.
The projected gap was resolved mainly by utilizing $98.9 million in prior year unexpended funds in several state Department of Health and Human Services (DHHS) programs, he said. The reductions were made possible by savings in the state’s Medicaid program, the lack of an expected federal penalty regarding use of behavioral health funds and lower than expected needs in the Children’s Health Insurance Program and public assistance.
The amendment includes provisions from LB733, introduced by Syracuse Sen. Dan Watermeier, which would appropriate $1.5 million in general funds this fiscal year to recruit and retain quality staff in workforce shortage areas within the state Department of Correctional Services.
Mello said the funding is an extension of work done by the Legislature to investigate and resolve systemic problems within the state’s correctional system.
“The actions taken by the Appropriations Committee in this area are a piece of the larger conversation around how we approach criminal justice reform in our state and the critical impact it has on public safety in all of our communities,” Mello said.
Lincoln Sen. Colby Coash expressed concern that the funds would not be spent by the department and, as a result, would not have the intended impact.
“You can allocate more money but unless the culture changes, retention will continue to be an issue,” Coash said. “Corrections does not have a recruitment problem, they have a retention problem. It is more than pay that needs to change in order to provide for the ongoing safety of corrections workers within our system.”
Watermeier acknowledged that the department may choose not to utilize the funds, but said the appropriation sends a message that the Legislature prioritizes the safety and security of correctional employees.
“It’s an effort that we can make,” he said. “We’re recognizing the need.”
The amendment includes $1.8 million to address capacity and programming needs within the state Department of Correctional Services while the Lincoln Community Corrections Center project is being completed.
The amendment also included provisions of LB923, introduced by Gering Sen. John Stinner, which would provide a total of $1 million in general funds to the state’s seven federally qualified health centers.
Following adoption of a technical amendment offered by Mello, LB956 advanced to select file on a 32-1 vote.
Fund transfers
LB957, also introduced by Hadley at the request of the governor, would make transfers between funds and create and eliminate funds. An Appropriations Committee amendment, adopted 33-1, became the bill.
The amendment includes three significant transfers from the state’s Cash Reserve Fund and would leave a projected, unobligated ending cash reserve balance of $643.2 million. Mello said that amount is approximately 14 percent of general fund revenues.
Among other provisions, the amendment would transfer from the cash reserve $27.3 million to the Nebraska Capital Construction Fund to cover the three-year cost of adding capacity to the Lincoln Community Corrections Center and $13.7 million to the Military Installation Infrastructure Fund.
The amendment would create the Military Installation Infrastructure Fund within the state Department of Natural Resources. The fund would serve as a mechanism to provide grant funds to a political subdivision where a military installation is located to assist with infrastructure related to management of water and soil resources.
Mello said the provisions would ensure that the state is able to successfully complete federally mandated modifications to two levy systems in Sarpy County. The levy project—which has been mandated by the Federal Emergency Management System—would protect many valuable assets in the Omaha metro area, including Offutt Air Force Base, he said.
Stinner spoke in favor of the levy funds and the budget package as a whole. He said the levy project is critical to avoid the loss of Offutt AFB, which would be detrimental to the entire state’s economy.
“Our state budget is a numerical depiction of our priorities,” he said.
North Platte Sen. Mike Groene questioned whether the state should make a habit of funding local entities that have their own taxing authority—such as natural resources districts—when those entities encounter a crisis. Doing so would not set a good precedent for the next generation of lawmakers, he said.
“We take care of our own,” Groene said. “We handle our own problems.”
Sen. Bob Krist of Omaha said the levy project is a concern for all Nebraskans, given the economic impact of Offutt AFB as well as the hundreds of acres of commercial property and a wastewater treatment plant serving 50,000 people that the levy also protects.
Papillion Sen. Bill Kintner said the one-time spending items in the committee’s proposal are a concern and represent more than just adjustments to the established budget passed last session. He said that while he supported many of the important priorities within the proposal, he voted against it coming out of committee.
“This budget proposes growth that I’m not comfortable with,” Kintner said.
LB957 advanced to select file 37-1.
Additional provisions
Finally, LB981, introduced by the Business and Labor Committee, would approve claims against the state and agency write-offs.
Omaha Sen. Burke Harr, chairperson of the committee, offered an amendment that was adopted 37-0. It added several additional claims that were settled or adjudicated after the bill was introduced, including three tort claims and two workers’ compensation claims.
Among the additional claims were:
• $800,000 for a tort claim against the state Department of Roads involving a vehicle accident resulting from a traffic control system problem;
• $243,000 for a tort claim against DHHS for failure to provide Medicaid coverage for medically necessary autism treatment; and
• $185,000 in negotiated attorney fees to the American Civil Liberties Union of Nebraska for a claim filed by seven couples who challenged the Nebraska constitutional prohibition against same-sex marriage.
Harr offered an amendment, adopted 35-0, which would authorize a $230,000 payment to Nebraska Appleseed for attorney fees related to a claim settled by the state regarding non-timely processing of applications for the Supplemental Nutrition Assistance Program (SNAP).
Haar said the state chose to settle the lawsuit in light of improvements to the SNAP processing system and to avoid extended litigation.
“When we don’t follow what we’re supposed to do—our obligations—this is what happens,” he said.
Following adoption of an additional Harr amendment for an $11,000 lottery write-off, senators advanced LB981 to select file on a 35-0 vote.
