AppropriationsSession Review 2022

Session Review: Appropriations

Lawmakers allocated more than a billion dollars in federal pandemic relief this session and made adjustments to the state’s two-year budget.

ARPA funds

LB1014, introduced by Speaker Mike Hilgers of Lincoln at the request of Gov. Pete Ricketts, allocates $1.4 billion in federal American Rescue Plan Act funds for fiscal year 2021-22 and FY2022-23.

Funds were allocated to Nebraska to mitigate the impact of the coronavirus pandemic and will be used to support COVID-19 mitigation efforts, respond to negative economic impacts, replace lost revenue, provide premium pay for essential workers and fund water, sewer and broadband infrastructure projects.

The Appropriations Committee considered 130 proposals related to the use of the pandemic recovery funds. Among the measures included in LB1014 are provisions of the following:
• LB755, sponsored by Plymouth Sen. Tom Brandt, which allocates $10 million to the state Department of Agriculture for the Independent Processor Assistance Program;
• LB867, sponsored by Lincoln Sen. Adam Morfeld, which allocates $500,000 to the state Department of Health and Human Services for HIV Surveillance and Prevention Programs;
• LB1025, sponsored by Omaha Sen. Justin Wayne, which appropriates $150 million for a grant program in qualified census tracts within a metropolitan class city;
• LB1066, sponsored by Gering Sen. John Stinner, which appropriates $28 million to DHHS and the University of Nebraska for behavioral health care services;
• LB1087, sponsored by Stinner, which appropriates $15 million to community colleges for dual enrollment programs;
• LB1089, sponsored by Stinner, which appropriates $55 million to DHHS for licensed and Medicaid-certified nursing facilities;
• LB1100, sponsored by Brainard Sen. Bruce Bostelman, which appropriates $1 million to the state Department of Economic Development for use by a political subdivision that owns or operates a nuclear plant in the state to conduct a feasibility study;
• LB1172, sponsored by Omaha Sen. Robert Hilkemann, which appropriates $55 million for rate increases for certain providers of developmental disabilities services;
• LB1201, sponsored by Bennington Sen. Wendy DeBoer, which appropriates $20 million to DHHS for grants to nonprofit organizations providing food assistance;
• LB1203, sponsored by Albion Sen. Tom Briese, which appropriates $4 million to DHHS to contract with a statewide nonprofit to increase child care capacity in areas of need by providing grants to start or expand programs for children from birth through age five; and
• LB1255, sponsored by Lincoln Sen. Eliot Bostar, which appropriates $150,000 to the University of Nebraska Institute of Agriculture and Natural Resources to update the Assessing Climate Change report released in 2014.

Administrative expenditures are capped at 15 percent for any agency, board or commission that receives ARPA dollars from the state through the bill. In addition, funds appropriated through LB1014 cannot be used by or for a joint public agency.

The measure passed on a 40-4 vote and took effect immediately.

Among the other proposals for use of the state’s ARPA funds considered by the committee were two bills that focused on equity concerns.

LB1183, sponsored by Grand Island Sen. Raymond Aguilar, would have used $20 million for capital construction grants to the state’s seven federally qualified health centers for costs associated with projects to expand health care access to Nebraskans most impacted by the COVID-19 public health emergency.

Under LB1267, sponsored by Omaha Sen. Tony Vargas, the state would have appropriated $2.5 million in ARPA funds in FY2022-23 to the following five state commissions to hire health equity liaisons:
• Commission on Indian Affairs;
• Commission on Latino-Americans;
• Commission on African American Affairs;
• Commission for the Deaf and Hard of Hearing; and
• Commission for the Blind and Visually Impaired.

Neither bill advanced from committee.

State budget adjustments

Lawmakers also adjusted the state budget through passage of three bills introduced by Hilgers at the request of the governor.

LB1011 makes adjustments to appropriations for state operations, agency and school aid and construction programs in the current and next fiscal year.

The bill contains general fund appropriations for a number of proposals introduced this year, including:
LB703, sponsored by Gothenburg Sen. Matt Williams, which appropriates $25 million toward construction of an agricultural facility at the University of Nebraska Innovation Campus in Lincoln, contingent upon $25 million in matching funds from private sources;
LB762, sponsored by Adams Sen. Myron Dorn, which appropriates $13.5 million for a 15 percent rate increase for Medicaid providers;
LB893, sponsored by Stinner, which appropriates $26.4 million for developmental disability provider rate increases;
LB989, sponsored by Stinner, which appropriates $26 million to the state Department of Health and Human Services to increase Medicaid nursing facility reimbursement rates;
LB1023, sponsored by Hilgers, which appropriates $120 million for a variety of water recreation projects; and
LB1164, sponsored by Lincoln Sen. Anna Wishart, which appropriates $13.2 million for a 15 percent increase in reimbursement rates for child welfare providers.

Lawmakers passed the bill on a 38-4 vote and it took effect immediately.

LB1012 authorizes and provides for certain fund transfers, creates funds and changes and eliminates provisions regarding a fund.

The bill includes the provisions of several proposals including:
LB759, sponsored by Dorn, which changes a limitation relating to microloans under the Business Innovation Act;
LB766, sponsored by Seward Sen. Mark Kolterman, which transfers $15 million from the Nebraska Health Care Cash Fund to the University of Nebraska Medical Center for pancreatic cancer research, contingent upon matching funds;
LB911, sponsored by Omaha Sen. Mike McDonnell, which increases the 211 Information and Referral Network grant amount from $300,000 to $955,000 annually and transfers interest on the Nebraska Telecommunications Universal Service Fund to the 211 Cash Fund for FY2022-23;
LB1074, sponsored by Bostelman, which creates the Surface Water Irrigation Infrastructure Fund and provides for a transfer from the Cash Reserve Fund; and
LB1114, sponsored by Omaha Sen. Terrell McKinney, which changes provisions of the Business Innovation Act relating to purposes, funding preferences and the small business investment program.

The measure passed 34-6 and took effect immediately.

Finally, LB1013 changes provisions related to the state’s Cash Reserve Fund. The bill uses more than $500 million from the cash reserve for a variety of transfers outlined in bills passed this session, including:
• $80 million to the Jobs and Economic Development Initiative Fund in LB1023, sponsored by Hilgers;
• $53.5 million to the Perkins County Canal Project Fund in LB1015, also sponsored by Hilgers;
• $50 million to the Surface Water Irrigation Infrastructure Fund in LB1074, sponsored by Bostelman;
• $50 million to the Nebraska Rural Projects Fund in LB788, sponsored by Gordon Sen. Tom Brewer;
• $30 million to the Military Base Development and Support Fund in LB1233, sponsored by Bellevue Sen. Rita Sanders; and
• $30 million to the Rural Workforce Housing Investment Fund in LB1071, sponsored by Williams.

LB1013 also sets aside $175 million to be released to the Nebraska Capital Construction Fund for a potential new state penitentiary but does not appropriate those funds.

The bill passed on a 33-5 vote and took effect immediately.

Gov. Pete Ricketts subsequently vetoed approximately $100 million in line items from the three main budget bills. Sen. John Stinner, chairperson of the Appropriations Committee, filed motions to override all but one of those vetoes.

Among the provisions vetoed in LB1011 were $51.8 million in provider rate increases in four programs within the state Department of Health and Human Services: behavioral health, child welfare, developmental disability aid and Medicaid.

The override motion, adopted 42-3, also restored the $4.15 million cash fund appropriation in LB1011 and a $4.15 million transfer from the Cash Reserve Fund in LB1013 to complete the MoPac Trail between Lincoln and Omaha.

The committee did not attempt to restore the elimination of a $14 million transfer from the Governor’s Emergency Cash Fund to the Cash Reserve Fund in LB1011.

Lawmakers also voted 42-3 to override the governor’s veto of a $15 million transfer from the Prison Overcrowding Contingency Fund to the Vocational and Life Skills Programming Fund in LB1012.

Finally, senators voted 41-5 to restore a $20 million transfer from the Cash Reserve Fund to the Middle-Income Workforce Housing Investment Fund in LB1013.

Other measures

The state will provide funding for a new facility to train rural health care providers under a bill given final approval this session.

LB792, introduced by Kearney Sen. John Lowe, originally would have appropriated funds to renovate the Youth Rehabilitation and Treatment Center in Kearney. Those provisions, which instead were included in the budget package, were removed and replaced with certain provisions of Omaha Sen. Robert Hilkemann’s LB721.

The bill appropriates a total of $24.5 million in general funds over the next three fiscal years for operating expenses at the University of Nebraska Medical Center Rural Health Complex in Kearney. The complex, funded in LB1014, is being built on the University of Nebraska Kearney campus to create new programming in allied health professions, medicine, nursing, pharmacy and public health.

LB792 passed on a 45-0 vote.

Lawmakers also passed a bill aimed at helping a Nebraska community address its electrical system challenges.

LB977, introduced by Sterling Sen. Julie Slama, transfers $15 million from the Cash Reserve Fund to the Site and Building Development Fund and expands eligibility to include grants to second class cities — those with a population between 801 and 5,000 residents — that partner with public power utilities to expand electrical system capacities and enhance redundancy and resilience.

Eligible grantees are required to secure a minimum commitment of half of a project’s total cost before state dollars will be released.

LB977 passed on a 42-0 vote and took effect immediately.

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