Cash transfer, state claims budget bills advance

Three bills that make up a portion of the state’s budget package were advanced to select file May 2. The mainline budget bill and other components of the $8.9 billion biennial budget were advanced last week.

<a href='' target='_blank' title='Link to the website of Sen. John Stinner'>Sen. John Stinner</a>
Sen. John Stinner

LB331, introduced by Speaker Jim Scheer at the request of the governor, would create funds and make certain fund transfers. An Appropriations Committee amendment, adopted 35-1, replaced the bill and adds $83.4 million in additional cash fund transfers to the General Fund, including:
• $30 million from the Roads Operations Fund;
• $20 million from the Medicaid Intergovernmental Transfer Fund; and
• $9 million from the Game and Parks Capital Maintenance Fund.

Gering Sen. John Stinner, chairperson of the Appropriations Committee, said transfers from agency cash funds were higher than usual during this budget cycle due to the projected shortfall facing the state.

“Transfers are a normal and necessary part of the budget process,” he said, and explained that the additional $153 million projected shortfall that was forecast during the budget hearing process required changes in order to ensure an adequate “rainy day” fund.

“This was an unusual situation used to get to the 3 percent limit and balance the budget,” Stinner said.

Henderson Sen. Curt Friesen, chairperson of the Transportation and Telecommunications Committee, offered and then withdrew an amendment that would have reduced the Roads Operations Fund transfer from $30 million to $15 million over the biennium.

Friesen said the state cannot “sweep the cupboard bare” by transferring money from agency cash funds to balance the budget. Doing so would negatively impact infrastructure projects without solving structural problems with the budget, he said, especially if the state’s agricultural sector does not bounce back soon.

“As we continue to use cash funds – to be swept into these fixes – we’re going to be digging ourselves a deeper hole and more cuts are coming,” Friesen said.

Stinner opposed the reduction, saying the state is asking all agencies to weather cuts during difficult economic times and the roads department should not be exempt.

Sen. John Kuehn of Heartwell then offered an amendment that would strike a 2018 transfer of $100,000 from the Nebraska Brand Inspection and Theft Prevention Fund to the General Fund.

Calling the transfer a “dangerous precedent,” Kuehn said the Nebraska Brand Committee’s fund is generated through user fees for the purpose of carrying out their brand inspection duties. Taking those funds to balance the budget only would make their job more difficult, he said.

“When we make these types of transfers after the public hearing – when it’s something that wasn’t brought up for public comment – it’s really hard for the stakeholders and those affected by these particular decisions to have an opportunity and a voice to weigh in,” Kuehn said.

Sen. Dan Hughes of Venango supported the amendment. The Nebraska Brand Committee has had difficult times recently with personnel issues, he said, but they are on the right track now and need the cash fund for technology updates and other expenditures.

“It’s not a lot of money in our budget, but it’s a massive amount of money in their budget,” he said.

But O’Neill Sen. Tyson Larson said the commission has a long history of mismanagement and misuse of state funds. In addition, he said, the commission’s cash fund is projected to have a $2.1 million balance at the end of fiscal year 2018-19.

“That means that their overall balance is growing every year,” Larson said. “Which means – even with this $100,000 taken out – they’re overcharging our producers right now. Really what they should be doing is lowering how much they’re charging per head so they’re not building that much of a cash balance.”

The Kuehn amendment was adopted on a 26-2 vote and the bill advanced to select file 37-1.

LB332, a bill that would make transfers to and from the state’s Cash Reserve Fund, also advanced.

An Appropriations Committee amendment, adopted 35-1, became the bill and would make a series of transfers totaling $173 million from the Cash Reserve Fund to the General Fund during FY2018-19.

The amendment also includes a $75 million transfer to the Nebraska Capital Construction fund to pay for the state Department of Correctional Services Reception and Treatment Center (RTC) project.

Stinner said the amended bill would ensure a sufficient cash reserve going forward while allowing the state to bridge the current budget gap. Changes proposed in the amendment would leave the cash reserve at approximately $379 million at the end of the 2019 fiscal year, he said, adding that Nebraska’s cash reserve is the fourth largest in the country.

The bill advanced to select file 27-3.

Also advanced was LB171, introduced by Business and Labor Committee chairperson Sen. Joni Albrecht of Thurston, which would provide for payment of claims against the state.

If a person sues the state, he or she files with the state claims board. Approved claims exceeding $50,000 must be reviewed by the Legislature.

A committee amendment, adopted 30-0, replaced the bill and would approve over $2.6 million in tort claims and a $395,000 miscellaneous claim.

The miscellaneous claim would cover the constitutionally and statutorily required publishing of legal notices in newspapers across the state regarding the death penalty ballot measure voted on in the 2016 general election.

Among the tort claims included in the amendment is a $2.1 million claim from a 2014 accident in Stanton County that left three people dead. The state Department of Roads was replacing and repairing stop signs and had omitted placing a stop sign at an intersection, resulting in the crash.

The amendment also includes approximately $937,000 in agency write-offs for FY2016-17. That amount includes $792,000 in uncollectible debts from the state Department of Health and Human Services.

LB171 advanced to select file 35-0.

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