Budget package clears first round

Lawmakers gave first-round approval March 14 to three bills comprising the Appropriations Committee budget adjustment package.

The state budget is structured on a two-year basis, with the budget enacted during legislative sessions held in odd-numbered years. Sessions in even-numbered years are used to make adjustments to the state’s two-year budget.

The committee’s funding recommendations would reduce to $17.6 million the amount above the state’s required minimum reserve available to fund bills passed this session.

Deficit appropriations

LB968, introduced by Norfolk Sen. Mike Flood on behalf of the governor, would provide for deficit appropriations. An Appropriations Committee amendment, adopted March 13 on a 41-0 vote, became the bill.

Under the amended bill, proposed appropriations would include:
• $17 million to the state Department of Health and Human Services (DHHS) to cover shortfalls due to developments in the child welfare reform effort and to reduce caseloads;
• $9.7 million to reinstate 1.5 percent of a 2.5 percent cut in Medicaid provider rates for the upcoming fiscal year;
• $4 million to reduce the state’s developmental disability waiting list; and
• $6.1 million to fund the design and construction of a veterinary diagnostic center at the University of Nebraska.

Calling the budget a “moral document,” Sen. Jeremy Nordquist of Omaha said lawmakers have a responsibility to ensure that residents have access to critical health services. Reductions in provider rates have resulted in a loss of Medicaid providers, he said, and the state should reinstate a portion of the cuts made during last year’s budget process.

“There are nursing homes in rural Nebraska that are being closed,” he said. “[The Appropriations Committee] decided to invest the resources that we have into the areas that we thought were critical.”

Sen. Steve Lathrop of Omaha spoke in favor of providing funds to reduce the number of people on the state’s developmental disability waiting list. He said the $4 million appropriation would reduce by 212 the approximately 1,800 people currently on the waiting list for services.

“We often times think that pro-life issues involve only those who are unborn,” Lathrop said. “But if we restrict the right of a woman to choose, it’s important that we stand with these families with developmental disabilities.”

Appropriations Committee chairperson Sen. Lavon Heidemann of Elk Creek said funds for the veterinary diagnostic center would represent the first annual installment for the $55 million project, which will be bonded over a 10-year period.

North Platte Sen. Tom Hansen said the center would facilitate research projects and help the current university lab provide more services to DHHS, Game and Parks, zoos and local humane societies.

“Because it does more than just diagnostics … it is critical that Nebraska has an accredited lab that can be counted on to address Nebraska’s needs,” he said.

LB968 advanced to select file on a 43-0 vote.

Cash reserve transfers

Funding for additional university projects would be achieved through transfers totaling $80 million from the state’s cash reserve fund. The transfers would be authorized by LB131, introduced by Heidemann.

As amended by a committee amendment, adopted 42-0, the bill would authorize the following transfers:
• $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.

Heidemann said the transfers would leave $341.2 million in the state’s cash reserve, which is $42 million more than was projected at the end of the 2010 legislative session.

He said the committee believed it appropriate to use funds from the cash reserve for construction projects that are not eligible for the kind of tax breaks that private entities could access, such as tax increment financing or the Nebraska Advantage program.

“Because these are university projects … they are not eligible for funds like those,” he said. “We feel that this is a good one-time investment in the state of Nebraska.”

Sen. Danielle Conrad of Lincoln spoke in support of the amendment, saying the University’s Center for Nursing predicts a state shortage of 5,581 nurses by 2020.

Kearney Sen. Galen Hadley said the school also would train physician assistants, physical therapists and other health professionals who are in short supply in rural areas.

LB131 advanced to select file on a 40-0 vote.

Other fund transfers

Finally, LB969 would authorize various fund transfers.

As introduced by Flood at the request of the governor, the bill would authorize transfers up to $3.8 million from the general fund to the Ethanol Production Incentive Cash (EPIC) Fund and $99,100 from the state Department of Administrative Services (DAS) State Insurance Fund to the Roads Operations Cash Fund.

A committee amendment, adopted 32-4, increased the transfer to the Roads Operations Cash Fund by $500 and changed the date of the EPIC fund transfer.

Among other provisions, the amendment also would:
• create the World Day on the Mall Cash Fund;
• reduce by $2.9 million annually, through 2015, the amount transferred to the Nebraska Health Care Cash Fund; and
• create the State Colleges Sport Facilities Cash Fund, consisting of transfers from the Civic and Community Center Financing Fund, gifts, grants and other contributions.

Under the amendment, $250,000 per year through 2014 would be transferred from the Civic and Community Financing Fund to the State College Sports Facilities Cash Fund. The transfer would increase to $400,000 annually beginning in 2015.

Several senators expressed reservations about utilizing funds intended to develop community centers for maintenance of state college sporting facilities.

Sen. Annette Dubas of Fullerton said money in the Civic and Community Financing Fund comes from turnback revenues from the Omaha CenturyLink Arena and has funded almost $4 million to build and refurbish community centers in 33 Nebraska cities.

“This fund is a very, very important fund for our smaller and more rural communities across the state,” she said. “It has definitely proven its worth.”

Ellsworth Sen. LeRoy Louden agreed, saying the civic and community center fund should only be used for its original purpose.

“That fund wasn’t set up to furnish athletic facilities in state colleges,” he said. “I can’t support that part of the bill.”

Heidemann said it was appropriate to dedicate some of the funds to state college facilities because they are used for a variety of community purposes, including summer camps, high school tournaments, community health fairs and wellness programs.

LB969 advanced to select file on a vote of 35-2.