Budget bills amended, advanced to final round

Lawmakers gave second-round approval March 19 to two bills comprising the Appropriations Committee’s mid-biennium budget adjustment package.

Several amendments were offered during debate on LB1413, which would provide for the transfer of funds and create and change the use and distribution of funds.

Sen. Robert Clements of Elmwood, chairperson of the committee, offered an amendment on select file that he said would address concerns raised during general file debate. The amendment, adopted 35-0, would adjust several transfers outlined in the bill.

“There were a number of objections and questions about some of the fund transfers,” Clements said.

Among other provisions, the amendment would change a proposed one-time $70 million transfer from the State Unemployment Insurance Trust Fund, known as SUIT, to the General Fund. The amount would be reduced to $40 million and the transfer would go to a newly created Workforce Development Program Cash Fund. The state Department of Labor would administer the fund to provide employment training grants.

An amendment from Blair Sen. Ben Hansen to alter the rate that Nebraska employers pay into the SUIT fund and provide a five-year “tax holiday” on the 5% of the rate that is directed to the state fund was adopted 39-0.

Elkhorn Sen. R. Brad von Gillern supported the amendment, which he said would provide more reasonable fees for business owners going forward and ensure that the SUIT fund doesn’t grow beyond what is necessary.

“It’s a great message to send the business community,” von Gillern said.

Those provisions were later removed, however, due to technical concerns. Hansen said he plans to offer them again as an amendment to a different proposal.

The Clements amendment also would reduce a transfer from the Behavioral Health Services cash fund from $15 million to $13 million. Clements said the decision was based on concerns that the original transfer would leave an insufficient balance in the fund.

Also included in the amendment is language that would prioritize grants from the Water Sustainability Fund for drinking water improvements for any federally recognized Indian tribe that is under a “no-drink order” from the U.S. Environmental Protection Agency.

Lincoln Sen. Anna Wishart, vice chairperson of the committee, supported the provisions, saying the Santee Sioux Tribe currently is under such an order because of the poor quality of their drinking water.

“My hope is that if the tribes choose to apply for this funding, that their funding needs will be prioritized,” Wishart said.

In addition, the amendment would provide:
• $500,000 from the Cash Reserve for the state’s Special Olympics program;
• $500,000 to a project at the University of Nebraska College of Law that provides legal services to low-income families facing eviction; and
• $2.5 million from the Cash Reserve for repairs of the water system at the Nebraska Correctional Center for Women in York.

Sen. Machaela Cavanaugh of Omaha questioned whether the Clements amendment made sufficient adjustments and continued to express concern about “sweeping” agency cash funds. Those funds were created for specific reasons by previous lawmakers, she said.

“It’s reckless to raid cash funds for a one-time padding of the budget,” Cavanaugh said. “When times are good, that’s not when you raid the piggy bank.”

Cavanaugh offered a series of motions and amendments to extend debate on the bill, none of which were successful.

Omaha Sen. Terrell McKinney brought an amendment that would change two transfers meant to bolster housing development in Nebraska. As amended on general file, LB1413 would transfer $20 million from the Affordable Housing Trust Fund to the Rural Workforce Housing Investment Fund and $5 million to the Middle Income Workforce Housing Investment Fund.

Under the amendment, the $25 million in transfers instead would be split evenly between the two funds at $12.5 million each. McKinney said he was seeking fairness and equity in state funding to address Nebraska’s housing shortage.

North Platte Sen. Mike Jacobson opposed the amendment. He said the cost of building homes is higher in rural areas while the average household income is lower and subcontractors harder to find. In addition, he said, urban parts of the state have greater access to federal grant funds.

McKinney pushed back on that argument. Without the adjustment contained in his amendment, he said, rural Nebraska will have received over $42 million more in workforce housing funds than urban areas — where he said the housing situation can be just as dire.

“There’s housing needed all across the state,” McKinney said.

The amendment failed on the first vote 23-22. Twenty-five votes were needed. Omaha Sen. Justin Wayne offered a motion to reconsider the vote, saying another bill moving forward in the Legislature would broaden accessibility to the Middle Income Workforce Housing Fund to more areas of the state, benefitting everyone.

The reconsideration motion prevailed and McKinney’s amendment was adopted on a second vote of 25-23.

Lawmakers then advanced LB1413 to final reading by voice vote.

Mainline budget bill

Senators also amended and advanced LB1412, the mainline budget bill. The proposal would provide, change and eliminate appropriations for the operation of state government, postsecondary education, state aid, capital construction and federal funds allocated to the state from the federal American Rescue Plan Act of 2021.

An amendment from Clements, adopted 38-0, made a series of changes including providing $500,000 in ARPA funds to a PTSD pilot program for children living in certain areas of a metropolitan class city. Omaha is the state’s only metropolitan class city.

The amendment also would earmark $600,000 for court interpreter pay increases. Funds for those positions were line-item vetoed by the governor from the budget passed by the Legislature last year and were advocated for this session by Lincoln Sen. George Dungan.

An amendment offered by Sen. Tony Vargas of Omaha would require that any unused or unspent funds appropriated to the Developmental Disability Aid program be distributed to service providers at the end of each fiscal year.

“We want to make sure these dollars go out,” Vargas said, adding that many lawmakers are frustrated that the state Department of Health and Human Services routinely fails to use all of the funds appropriated to the program.

Jacobson supported the amendment, which he said would ensure accountability. When lawmakers fund agencies and programs, they need to know that funds are being used as intended, he said.

“There should never be dollars left over because that’s how great the need is,” Jacobson said.

Bayard Sen. Steve Erdman opposed the amendment, which he characterized as “too vague” and not the best way to approach the budgeting process for state agencies.

The Vargas amendment was adopted on a 29-18 vote.

Following several unsuccessful attempts to further amend LB1412, the bill advanced to final reading by voice vote.

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