AppropriationsSession Review 2023

Session Review: Appropriations

Lawmakers approved the state’s $10.7 billion budget package this session.

Among the measures passed was LB814, the mainline budget bill, which funds state government for the next two fiscal years. The bill was introduced by Speaker John Arch of La Vista on behalf of Gov. Jim Pillen and contains recommendations for state operations and aid programs.

The bill includes amended provisions of more than 30 bills brought by lawmakers, including:
• LB80, sponsored by Grand Island Sen. Raymond Aguilar, which authorizes transfers of $4 million in each of the next two fiscal years from the Veterans’ Aid Fund to fund construction and improvements to a state veterans’ cemetery in Grand Island;
• LB506, sponsored by Lincoln Sen. Eliot Bostar, which provides $177.2 million in federal funds for a grant to a primary class city to design, construct and implement an additional water supply project;
• LB609, sponsored by Omaha Sen. Mike McDonnell, which appropriates $2.5 million in general funds in FY2023-24 to the state Department of Veterans’ Affairs to award a grant to a nonprofit to help complete a memorial to Nebraskans who died in the Vietnam War;
• LB684, sponsored by Albion Sen. Tom Briese, which requires the state Department of Administrative Services to contract for an independent review of all state agencies, board and commissions;
• LB769, sponsored by Bellevue Sen. Rick Holdcroft, which allows funds available in the Critical Infrastructure Facilities Cash Fund to be used to provide grants for certain wastewater treatment facilities; and
• LB817, introduced by Arch on behalf of the governor, which appropriates funds for reaffirmed and new capital construction projects.

LB814 passed on a vote of 42-3 and took effect immediately.

LB818, passed 41-3, authorizes new fund transfers and changes and eliminates provisions regarding existing fund transfers. The bill includes a transfer of $574.5 million from the Cash Reserve to the Perkins County Canal Project Fund to be administered by the state Department of Natural Resources for a canal to divert South Platte River water from Colorado to Nebraska.

The measure also transfers $1 billion from the state General Fund to the newly created Education Future Fund and states legislative intent to transfer $250 million annually going forward. It also places study and reporting requirements on the transfer from the state’s Cash Reserve to the state Department of Correctional Services for a new state prison.

The bill includes provisions of LB281, sponsored by North Platte Sen. Mike Jacobson, which authorize the state Department of Economic Development to provide $10 million in grants for youth outdoor recreation camp facilities.

The governor returned both bills with millions in line-item vetoes to a variety of programs and proposals contained in the budget package.

As passed by the Legislature, LB814 would have increased provider rates for the Children’s Health Insurance Program and Medicaid by 3 percent in FY2023-24 and 2 percent in FY2024-25. The governor vetoed the second-year increase, amounting to a reduction of approximately $15.3 million in general fund appropriations.

Among other appropriations, Pillen also vetoed $7 million to the state Department of Environment and Energy for grants to support a rural drinking water project in Cedar and Knox counties, originally introduced by Niobrara Sen. Barry DeKay in LB768, and $1 million for a facility to house pregnant and parenting homeless youth, originally introduced by Seward Sen. Jana Hughes in LB772.

Lawmakers voted 31-14 to override the governor’s veto of $848,700 for a new state auditor position and salary increases. Thirty votes were needed. Several other override attempts on LB814 were unsuccessful and the remainder of the governor’s vetoes to the bill were sustained.

Pillen also struck the following transfers from LB818:
• $40 million from the Cash Reserve Fund to the Rural Workforce Housing Investment Fund and the Middle Income Housing Investment Fund, originally introduced by Omaha Sen. Tony Vargas in LB741;
• $20 million from the Cash Reserve Fund to the state Department of Economic Development for the shovel-ready grant program, originally introduced by McDonnell in LB608;
• $10 million to the Site and Building Development Fund for a grant program to aid panhandle communities with a ground-based nuclear deterrence project, originally introduced by Gering Sen. Brian Hardin in LB712; and
• $10 million from the Nebraska Health Care Cash Fund for a pilot program on PTSD related to gun violence, originally introduced by Omaha Sen. Justin Wayne in LB792.

Senators declined to override the governor’s veto of $40 million in cash fund transfers to the two housing funds. No overrides were offered on the other line-item vetoes in LB818.

Additional bills included in the budget package that passed and took effect immediately were:
• LB813, which makes adjustments to funding for state operations, aid and construction programs in the current fiscal year ending June 30, 2023, on a 44-2 vote;
• LB815, which appropriates funds for the $12,000 annual salaries of state senators, on a 45-1 vote;
• LB816, which appropriates funds for the salaries of the state’s constitutional officers, on a 44-2 vote; and
• LB282, which approves approximately $27 million in tort claims against the state and agency write-offs, on a 42-0 vote.

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