Budget package advances
Lawmakers gave first-round approval April 30 to the state’s $8.6 billion budget package. The state budget is structured on a two-year basis, with the budget enacted during legislative sessions held in odd-numbered years.
Omaha Sen. Heath Mello, chairperson of the Appropriations Committee, said the budget proposal would result in a financial status at the end of fiscal year 2016-17 that is $48.9 million more than the 3 percent minimum reserve.
Mainline budget bill
Introduced by Kearney Sen. Galen Hadley at the request of the governor, LB657 is the mainline budget bill. An Appropriations Committee amendment, adopted 27-0, replaced the bill and contains recommendations for state operations and state aid.
Among other provisions, the amendment includes the following general fund increases over the biennium:
• $79.8 million for the Tax Equity and Educational Opportunities Support Act;
• $75.9 million for the federal Medicaid match rate;
• $64.4 million for Medicaid reimbursement rates; and
• $53.8 million for a 3 percent increase in funding to colleges and universities.
One of the largest increases is $20.3 million—an 11.2 percent increase—to the state Department of Correctional Services. The increase would cover inmate medical costs, including an expensive new Hepatitis C treatment, as well as additional security and behavioral health staff.
Debate on the mainline budget bill centered on a proposal based on LB584, originally introduced by Ogallala Sen. Ken Schilz, which attempts to address a statewide shortage of oral health care providers.
The provisions would appropriate $8 million to the Coordinating Commission for Postsecondary Education to develop, award and administer a contract to provide reduced-fee oral health services and oral health workforce development.
Under provisions specified in LB661, also part of the budget package, the commission could contract with an entity that meets certain criteria to provide dental services in underserved areas.
Among other restrictions, the criteria specify a nonprofit entity that graduates at least 75 dental students each year and is partnered with at least five school districts or federally-qualified health centers.
Omaha Sen. Ernie Chambers offered an amendment to strike the provision, saying the criteria established could be met only by the Creighton University School of Dentistry.
“The state cannot make a direct appropriation to a private entity,” he said, “so this is making an end-run around the [state] constitution.”
Sen. Tanya Cook of Omaha supported the amendment, saying Creighton—a Catholic university—accepts extensive private donations and uses those funds to advocate for anti-government public policy.
“At the same time—with a straight face—they are asking the taxpayers of Nebraska for a subsidy for expansion of their private, parochial campus,” Cook said.
Lincoln Sen. Kathy Campbell also expressed concerns, saying no Creighton students have utilized an existing state program designed to incentivize medical providers to practice in underserved and rural areas.
Using state funds to directly benefit Creighton could encourage other private institutions to approach the state for additional scholarship assistance, she said.
“I am concerned about the precedent we’re setting for other private schools in the state that may provide medical education in some form,” Campbell said.
Schilz opposed the amendment, saying the goal of the provisions was to increase Creighton University’s dental class size by 30 students per year, which would benefit the entire state.
“For three years when we talked about Medicaid expansion, I looked out there to see what the situation was in my neighborhood, and everywhere I turned it was lack of access to health care,” Schilz said. “I told myself … that whenever I got an opportunity that makes sense to bring more health care to rural Nebraska, I’d pick it up and go with it.”
Sen. Jeremy Nordquist of Omaha also opposed the amendment, saying the state currently has several contracts with Creighton University to provide expertise on public policy issues, including cancer research.
Chambers withdrew his amendment when senators agreed to offer a compromise amendment to LB661, which would open the contract process up to both Creighton and the University of Nebraska College of Dentistry.
North Platte Sen. Mike Groene offered and later withdrew an amendment to strike $2.5 million in matched funds for The Yeutter Institute for International Trade and Finance at the University of Nebraska. He said voters in his district are interested in tax relief, not funding public/private partnerships with the university.
“If [Yeutter] wants that to exist, he should pay for it,” Groene said.
Heartwell Sen. John Kuehn, who originally introduced the proposal as LB496, opposed the amendment.
The state’s investment would be matched by private funds, he said, which already have been raised. Funds would not be used for bricks and mortar, but to expand research and increase Nebraska exports, he said.
“This is a priority of state government and it is a priority of the state of Nebraska,” Kuehn said.
Following adoption of a technical amendment offered by Mello, LB657 advanced to select file on a 26-0 vote.
Fund transfers
LB661 would create funds and make certain fund transfers. An Appropriations Committee amendment, adopted 26-1, became the bill.
The amendment includes a $60 million per year increase to the Property Tax Credit Cash Fund. The transfer would increase to $200 million the amount available for property tax relief, Mello said. This would allow for a credit equal to $93 per $100,000 of valuation—a $28 increase over the current level.
The committee amendment also would transfer:
• $11 million each year from the General Fund to the Water Sustainability Fund;
• $3.3 million each year from the General Fund to the Water Resources Cash Fund; and
• $3 million each year from the Water Sustainability Fund to the Nebraska Resources Development Fund.
Mello offered an amendment, as a compromise regarding funds for expanded low-income dental care, to remove criteria that otherwise would have excluded the University of Nebraska Dental College. It also stipulated that if multiple applicants meet the contract requirements, matching funds would be allocated proportionally.
The amendment was adopted on a vote of 25-4 and LB661 advanced to select file 33-2.
LB662 would authorize transfers to and from the Cash Reserve Fund. An Appropriations Committee amendment, adopted 37-1, became the bill.
The amendment would authorize transfers from the fund of:
• $25 million to the Nebraska Capital Construction Fund for construction of the Global Center for Advanced Interprofessional Learning at the University of Nebraska Medical Center (UNMC);
• $17 million to cover payment of federal penalties imposed on the state Department of Health and Human Services; and
• up to $5.5 million in the current fiscal year to the Republican River Compact Litigation Contingency Cash Fund.
Scribner Sen. David Schnoor offered an amendment to remove the $25 million transfer to construct the center at UNMC. Schnoor said the state’s cash reserve should be used to provide tax relief rather than fund construction.
“This is excess money; I’d like to see it go back to taxpayers,” he said.
Omaha Sen. Robert Hilkemann, who originally introduced the proposal as LB532, opposed the amendment. He said the center would be a one-time investment of “seed money” on the part of the state that would help UNMC recruit top teachers and researchers.
Mello also opposed the amendment, saying the cash reserve historically has been used for one-time appropriations and not for ongoing tax relief.
“This [amendment] generally runs against good fiscal policy,” he said.
The amendment failed on a 14-20 vote. A second Schnoor amendment to remove the $8 million transfer for expanded dental care also failed 13-22.
LB662 advanced to select file 39-3.
Additional provisions
Four additional bills included in the committee’s budget package advanced to select file April 30:
LB658, which would fund the $12,000 annual salaries of Nebraska’s 49 state senators, advanced 33-0;
LB659, which would fund salaries and benefits for constitutional officers, advanced 38-0;
LB660, which would appropriate funds for capital construction and property acquisition, advanced 28-0; and
LB656, which would make adjustments to appropriations for the current fiscal year, advanced 38-0.
Finally, LB663 also was advanced. As introduced, the bill would have increased salaries for Nebraska judges by 2.25 percent in 2015 and 2.4 percent in 2016.
A Judiciary Committee amendment, adopted 41-3, changed the increase to 3.5 percent in 2015 and 2016. The amendment also would increase Nebraska Supreme Court judges’ salaries from the current $160,540 to $166,159 in 2015 and $171,974 in 2016.
LB663 advanced to select file 42-2.
