Bill proposes funding source for water management projects

The Natural Resources Committee held a hearing Jan. 19 on a bill proposing a new funding source for the Water Resources Cash Fund.

LB229, introduced by Valentine Sen. Deb Fischer, would provide for annual transfers of $7 million from the Environmental Trust Fund to the Water Resources Cash Fund for 10 years.

The Water Resources Cash Fund is used by the state Department of Natural Resources primarily to aid water management actions taken by natural resource districts in overappropriated and fully appropriated basins bound by an interstate compact, decree or agreement.

Last year, the Legislature repealed a future corn checkoff, which would have provided approximately $7.5 million annually for the Water Resources Cash Fund from FY2012-13 through FY2018-19.

Fischer said the Water Resources Cash Fund will need to be adequately supported to cover costs associated with the Platte River Recovery Implementation Program, which is estimated to cost the state between $53 to $100 million through FY2018-19.

“Given this future fiscal responsibility by the state of Nebraska for simply this one project,” she said, “I think it is abundantly clear to us that the state must look for funding sources for this and other projects of this nature.”

The Nebraska Environmental Trust Fund receives 44.5 percent of Nebraska lottery profits, which has netted the fund $13.2 million to $14 million annually since FY2007-08. The fund is used to carry out the provisions of the Nebraska Environmental Trust Act.

State Department of Natural Resources director Brian Dunnigan testified in support of the bill. He said the Water Resources Cash Fund has been used recently for water leasing costs associated with Republican River Compact compliance in years with low rainfall. The cash fund also has been used to meet the first increment of state costs associated with the Platte River Recovery Implementation Program, Dunnigan said.

Fischer said the Nebraska Environmental Trust Fund is a logical choice for funding water-related projects because its intended use is to conserve and restore the environment of Nebraska. Furthermore, she said, a dedicated funding source, as opposed to general fund appropriations, is needed to ensure the cash fund has a sufficient balance.

“The state is currently facing a significant budget shortfall,” Fischer said. “While I agree the state should help fund these efforts, … relying on general funds is not a possibility at the present time, nor, I believe, will it be in the foreseeable future.”

The bill also would broaden acceptable uses of the cash fund to include expenditures for studies and grants to facilitate compliance with the Nebraska Ground Water Management and Protection Act.

Fischer said this measure would permit all natural resources districts — not just those in overappropriated and fully appropriated basins — to access the Water Resources Cash Fund.

Jasper Fanning, general manager of the Upper Republican NRD, testified in support of LB229. He said support for water issues has been piecemeal and insufficient. A long-term solution, he said, would require dedicated state funding in addition to local funding, such as the occupation tax on irrigators.

Mark Brohman, executive director of the Nebraska Environmental Trust, spoke in opposition to the bill. Funding is awarded from the Nebraska Environmental Trust Fund based on a merit, he said, and LB229 would take away half of the funds that could be granted to other deserving and valuable projects.

“This is cutting the golden goose in half and still expecting the eggs to be there,” he said.

Brohman also pointed out that the trust fund already has been used to help with water issues, specifically in the Platte River. Since 1994, the trust fund has provided $27.5 million for Platte River projects, he said.

“When Nebraskans voted for the lottery, they said, ‘We want to do special things with [the proceeds],’ and special things are not reallocating the money and earmarking it,” Brohman said.

Marty Grate, representing the city of Omaha, also testified in opposition to the bill. He said the city is funding its own combined sewer overflow and flood control projects without significant state or federal money. Water management projects should be supported by local efforts, he said, which require additional bonding authority for NRDs.

Brohman urged the committee to convene a task force to search for an alternative funding source — a proposal met with disagreement from Fischer.

“The idea of forming another task force to look at this issue, I don’t believe is being responsible,” she said.

The committee took no immediate action on the bill.