Line-item budget vetoes sustained

Lawmakers declined to override any of the governor’s line-item vetoes of the state budget package May 17.

Several bills comprising the $8.9 billion, two-year budget package were passed last week and sent to Gov. Pete Ricketts. The governor vetoed $56.5 million in line items from the budget. The Appropriations Committee offered override motions on two of those vetoes.

Among the provisions vetoed in LB327, the mainline budget bill, was $33.6 million in general funds that lawmakers had approved for Medicaid, child welfare, behavioral health and developmental disability providers. The governor’s veto amounts to a 3 percent cut in provider rates in the four categories.

In his May 15 veto message, the governor said the change would return the level of funding for provider rates to the amounts recommended in his budget proposal. Ricketts said that prudent fiscal management calls for less general fund spending in light of a recent downturn in state tax revenue.

Gering Sen. John Stinner, chairperson of the Appropriations Committee, offered a motion to override $32.4 million of those cuts to provider rates for Medicaid, behavioral health and developmental disability providers.

While a 3 percent cut may seem reasonable, Stinner said, rates for Nebraska Medicaid providers are the sixth lowest of all the states that provide such information. Nursing homes – particularly in rural areas of the state – are stressed financially by those low rates, he said.

“With an aging population, nursing homes need to be preserved at least at a flat rate,” Stinner said, which the bill as passed by the Legislature would have done.

Sen. Mark Kolterman of Seward supported the motion, saying an override was warranted in this case. Many critical access hospitals and nursing homes in rural areas are the largest employers in their towns, he said, and some are in danger of failing because of Medicaid provider rates.

“How are we going to recruit people to an area where the largest employer in many cases is struggling to keep their doors open?” Kolterman said.

Omaha Sen. Robert Hilkemann also supported the override motion, saying the state is not “broke” and should not balance its budget by cutting rates to providers who take care of the state’s most vulnerable.

“Even if we do this override, we’re still going to have $350 million in our rainy day fund,” he said. “To what end? It’s a rainy day.”

Sen. Lynne Walz of Fremont said it has taken 200 years of advocacy to open doors to employment, education and housing for people with developmental disabilities. Speaking in support of the override motion, she said Nebraska parents and providers have long fought against abuse and neglect and for community acceptance and access to services.

“What a step backward – for families, for advocates and for people needing services due to a disability,” Walz said.

Elkhorn Sen. Lou Ann Linehan opposed the override motion, saying she does not believe that the state’s economic condition will improve anytime soon.

“These are hard, difficult votes,” she said. “But if we take [the cash reserve fund] down to 2.5 percent and have to come back in October and make the very cuts that we’re doing today – painful as they are – they’re not going to be less painful in October. They’ll be more painful,” she said. “We have to face the reality that we’re in. We aren’t broke, but we shouldn’t let ourselves get quite so close.”

The motion failed on a vote of 27-21. Thirty votes were required for adoption.

The other committee motion would have restored $300,000 vetoed from the Office of Probation Services. Stinner said the amount reflects a 0.5 percent across-the-board cut to most state agencies that was included in the governor’s line-item vetoes.

“Probation services provides constructive change through rehabilitation, collaboration and partnership to enhance and maintain the safety of our communities,” Stinner said. “Bringing an additional cut to those services will not serve the mission of Nebraska.”

Crete Sen. Laura Ebke supported the motion. A robust probation system with sufficient services is important to avoid expensive lawsuits related to prison overcrowding and the possible need to construct additional prison facilities, she said.

“It’s important for us to keep our eyes on the big picture,” Ebke said.

The motion failed 23-25.

Omaha Sen. Bob Krist then offered a motion to override $6.4 million in cuts to developmental disability aid. He said the funds provide important support and services to the state’s most vulnerable residents in every legislative district.

“This is the essence of what we are in business to do – to protect the innocent,” he said.

Sen. Matt Hansen of Lincoln supported the override motion, saying the governor had an unlimited number of choices in how to re-balance the budget with his line-item vetoes but chose cuts that impact individuals who cannot advocate for themselves.

“The governor had his choices and he made them,” Hansen said. “And I hope he is comfortable with [it].”

The motion failed on a vote of 27-21.

A number of additional motions were offered and withdrawn, including motions to override vetoes of:
• $5.8 million for the University of Nebraska;
• $1.3 million for child welfare provider funding;
• $716,00 for juvenile justice transportation funding; and
• $26,800 in general funds for the state’s specialized court system.

Following a vote on a second motion to override the veto of child welfare funding, which failed 19-23, all of the governor’s line-item vetoes were sustained.

Among other vetoes was a $6.5 million reduction to the Highway Cash Fund appropriation contained in LB327. Ricketts said the change – along with a $15 million line-item reduction in transfers from the Roads Operations Cash Fund to the General Fund in LB331 – would prevent an increase in the state’s variable gas tax.

The governor also line-item vetoed $11 million in general funds appropriated in fiscal year 2018-19 in LB330 for the ongoing heating, ventilating and air conditioning system renovation of the State Capitol. Ricketts said the veto would not cancel or delay the project.

No motions were offered to override those vetoes.