Cash reserve bill amended on second round
Lawmakers amended and advanced one of the three bills comprising the Appropriations Committee budget adjustment package March 16.
LB131, introduced by Elk Creek Sen. Lavon Heidemann, would authorize various transfers from the state’s cash reserve fund.
Norfolk Sen. Mike Flood offered an amendment during select file debate that would transfer $10 million from the state’s cash reserve to the general fund, which a pending Flood amendment filed on LB968 then would appropriate to K-12 special education.
Flood said the amendment was part of an effort to encourage senators to examine alternatives for funding a tax cut proposal advanced by the Revenue Committee. During general file debate on the budget package, several senators expressed concerns about the impact of the tax cut proposal on the state’s budget.
“One of the jobs that I take seriously is trying to make things work,” Flood said. “[This] is an attempt to facilitate a common solution.”
York Sen. Greg Adams, chairperson of the Education Committee, spoke in support of the amendment.
He said special education funding has been held flat for years, while needs continue to grow. Providing funds for special education through the amendment process would benefit all schools regardless of whether they receive money through Nebraska’s state aid to schools formula, he said.
“It’s going to kids that need it whether they are in an equalized or nonequalized districts,” Adams said.
Omaha Sen. Heath Mello opposed the amendment. Appropriating money for special education this year would establish a funding level that must be maintained in the future, he said, when funds may not be available.
“This creates a cliff effect,” Mello said. “We [will] have an ongoing commitment, a maintenance of effort.”
Lincoln Sen. Danielle Conrad also opposed the amendment, saying the proposal had not gone through the public hearing process or been the subject of policy discussions by the Appropriations Committee.
“There is no question that special education is in need of additional funding,” she said. “My opposition is related to the process.”
Sen. Steve Lathrop of Omaha said lawmakers should consider the state’s revenue projections for the next budget cycle before making additional cash reserve transfers to accommodate the potential tax cuts in the Revenue Committee proposal. Current revenue projections combined with the proposed tax cuts would result in a $600 million shortfall in the next biennium, he said.
“There are 49 people in here who want tax cuts,” Lathrop said. “That isn’t the issue. It’s not those who want tax cuts against those who don’t. Our responsibility, however, as policy makers is to ensure first that we can pay for them.”
Lincoln Sen. Kathy Campbell agreed, saying lawmakers should look at the long-term implications of tax cuts and not only at the state’s ability to afford a cash reserve transfer this year.
“But what is going to happen in year two, or three or four?” she asked.
Sen. Brenda Council of Omaha offered an amendment to Flood’s amendment that would increase the cash reserve transfer to $28 million. She said the increase would bring aid to the level of need estimated at the beginning of the budgeting process.
“If we are really serious about addressing the very pressing needs in special education … then let’s increase the amount to be transferred to $28 million,” she said.
The amendment failed on a vote of 6-28.
An amendment offered by Malcolm Sen. Ken Haar that would have reduced the amount in Flood’s amendment to $5 million failed on a 3-24 vote.
The Flood amendment was adopted 25-16.
Omaha Sen. Bob Krist offered an amendment to LB131 that would decrease the transfer from the cash reserve to the Capital Construction Fund from $80 million to $50 million.
As amended on general file, LB131 would use the $80 million to fund the following projects:
• $50 million for a cancer research center at the University of Nebraska Medical Center (UNMC) in Omaha;
• $15 million for the UNMC College of Nursing and School of Allied Health Professions at the University of Nebraska in Kearney;
• $7.5 million for improvements to the Oak Bowl at Peru State College;
• $6.7 million for renovation of the Armstrong Gymnasium at Chadron State College; and
• $800,000 for the Centennial Mall renovation project in Lincoln.
Krist said the Appropriations Committee’s budget proposal reflected committee member’s priorities, which may be different than those of other senators in the Legislature. Reducing the funds available for capital construction would force a debate on those priorities, he said.
Heidemann spoke against the amendment, saying several of the projects require both public and private funds and would be jeopardized if the commitment of state dollars were removed.
“If you like the projects and you think it’s an investment in the state of Nebraska, I urge you to continue on and vote for LB131 as it is,” he said.
Sen. John Nelson of Omaha also opposed the amendment, saying the proposed cancer center at UNMC would create jobs and result in significant economic development. Revenue projections indicate that the state will not have sufficient funds in the next few years to accommodate both capital construction priorities and tax cuts, he said.
“If something has to give, then it needs to be tax cuts,” Nelson said. “This is not the time.”
Following withdrawal of the Krist amendment, senators advanced LB131 to final reading by voice vote.
Select file debate on the remaining budget bills is scheduled for next week.
