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27-05-2025
- Business
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Pillen withdraws line-item budget vetoes Nebraska lawmakers said were unconstitutional
Gov. Jim Pillen talks with reporters after his annual State of the State speech to the Nebraska Legislature. Jan. 15, 2025. (Zach Wendling/Nebraska Examiner) LINCOLN — Gov. Jim Pillen on Tuesday withdrew his intended $14.5 million in general fund line-item vetoes to Nebraska's next two-year budget, ending a possible constitutional dispute among the state's three branches of government. Pillen joined Secretary of State Bob Evnen and Speaker of the Legislature John Arch to announce an end to the short-lived line-item veto saga Tuesday. The line-item vetoes were first identified last Wednesday in a letter to the Legislature, but the actual budget bills with his marked-up objections were not filed with the Legislature until Thursday morning. The latter is important because each line-item veto can be individually overridden, or the changes can be overridden as a group. The Nebraska Constitution requires vetoes to be filed with the Legislature within five days, excluding Sundays, while the Legislature is in session. Pillen had said Thursday he would consult with the Attorney General's Office and other legal counsel on next steps, with the thinking being that a court order could have enforced the vetoes. On Tuesday, Arch, Evnen and Pillen said that while they continue to disagree whether the constitutional requirement for the line-item vetoes was met, 'given how closely the budget bills match the governor's originally introduced budget,' Pillen signed Legislative Bill 261 and LB 264 as passed by the Legislature on May 15. The bills were then refiled in Evnen's office. 'That will render the underlying constitutional dispute moot and bring the matter to a close,' the three officials said in a joint statement. Arch told reporters last week that to his knowledge, nothing like this had happened before. The Legislature, as well as the offices for Pillen and Evnen, are in the Nebraska State Capitol. A spokesperson for Evnen told the Nebraska Examiner that both budget bills intended to be vetoed were received by the office's administrative assistant just before 5 p.m. last Wednesday. 'We fulfilled our responsibility by receiving the bills for filing,' the spokesperson said. No one from Evnen's office delivered the bills to the Clerk of the Legislature's office, which is a responsibility of the Governor's Office. The Legislature remained in session until 9:20 p.m. last Wednesday, but the copies of LB 261 and LB 264 that the governor issued line-item vetoes to, not just the veto letter, were not delivered to the Legislature by a midnight deadline. The line-item vetoes sought $14.5 million in less spending from the state's general fund, Nebraska's main pocketbook that will cover a total of $11 billion in total spending through June 2027: $11.99 million reduction of an increase to the Nebraska Supreme Court because the governor argued 'every branch of government' had to contribute to budget balancing. $2 million cut from public health departments, zeroing out COVID-19 pandemic-era increases because the 'pandemic is over' and 'spending must be shrunk to pre-pandemic size.' $511,972 from the State Fire Marshal for salary and health insurance premium increases because he argues the agency has 'sufficient funding' already. Those spending decreases would not have increased the state's coffers as they would have similarly been offset by $14.5 million in fewer funds being transferred from the cash reserve fund. A fourth veto sought to prevent an $18 million diversion of cash funds for Lake McConaughy recreational upgrades. Pillen said the project's scope has changed over many years, and further discussion is needed about how local casino revenue could support improvements. A copy of those specific objections obtained by the Examiner indicates line-item vetoes in: Six of the eight budget sections for the Nebraska Supreme Court (LB 261). Two of the three sections for the State Fire Marshal (LB 261). One of the 25 sections for the Nebraska Department of Health and Human Services (LB 261). One of the 24 sections for the Nebraska Game and Parks Commission (LB 261), as well as a companion cash fund transfer (LB 264). One section for cash reserve fund transfer (LB 264). Lawmakers would have had until this Friday to override the vetoes had the reductions been delivered properly. Pillen and Arch said budget adjustment measures for the 2025-27 fiscal years 'will be a priority' when lawmakers reconvene in 2026, just seven months away. 'To avoid a similar future dispute,' the statement continues, 'all parties have agreed to meet during the interim to clarify and confirm procedures that meet the constitutional requirements for transmittal of budget vetoes, and ensure they are maintained in a clear written guidance for future implementation by all offices.' The Governor's Office has not responded to a request for comment on the current process of delivering vetoes and whether there were any variations in this process this time. Pillen in 2023, for example, vetoed $38.5 million in general fund spending for the 2023-24 and 2024-25 fiscal years. Lawmakers overrode about $850,000 of that. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Yahoo
22-05-2025
- Business
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Pillen announces $14.5 million in vetoes from Nebraska budget, 83% of it from Supreme Court
Nebraska Gov. Jim Pillen sits in his office in the Nebraska State Capitol. April 29, 2025. (Zach Wendling/Nebraska Examiner) Editor's note: This story has been revised to reflect that Pillen's vetoed budget bills may not have been filed in time to be accepted. LINCOLN — Gov. Jim Pillen announced late Wednesday that he intended to line-item veto $14.5 million in general fund appropriations from Nebraska's legislatively approved budget for the next two years, aiming 83% of his reductions at the Nebraska Supreme Court. However, the Legislature said the vetoed bills were not properly filed by a midnight deadline Wednesday and that all vetoes were void 'pending further determination regarding the constitutionality of the present circumstances.' In his veto letter returning Legislative Bill 261, the general spending budget bill, and LB 264, a bill allocating various state cash funds, Pillen thanked lawmakers for closing a major projected budget deficit for the next two years while making investments in education, developmental disability support and national security. He sought to veto four items he said were 'necessary to honor our commitment to fiscal restraint,' and that the small number of objections reflects 'the depth of fiscal conservatism' in the budget. 'It is critical that we continue to treat nickels like manhole covers, and I urge you to sustain four additional reductions to improve our fiscal position,' Pillen wrote. Even with the vetoes, the Legislature would still finish the budget with a positive balance of $1.1 million, because Pillen's approach would have reduced spending instead of using as much money from the 'rainy day' cash reserve fund. His approach reduced by about $14.5 million a transfer from the cash reserves. The lawmaker-approved state budget calls for transferring $147 million from cash reserves to help close a half-billion-dollar projected budget deficit. The final balance includes $1.55 million in anticipated spending to raise judges' salaries by 1.5% in each of the next two years, via LB 513. Pillen's office has said those salaries are already competitive nationally. His staff has declined to say whether he would veto the raises if passed. Three of Pillen's four line-item vetoes were to the state's general fund, Nebraska's main pocketbook that will cover a total of $11 billion in spending through June 2027: $11.99 million reduction of an increase to the Nebraska Supreme Court. $2 million cut from public health departments, zeroing out COVID-19 pandemic-era increases because the 'pandemic is over' and 'spending must be shrunk to pre-pandemic size.' $511,972 from the State Fire Marshal for salary and health insurance premium increases because he argues the agency has 'sufficient funding' already. The fourth veto sought to prevent an $18 million diversion of cash funds for Lake McConaughy recreational upgrades. Pillen said the project scope has changed over many years, and further discussion is needed about how local casino revenue could support road improvements. For the Judicial Branch, Pillen pushed to have the Legislature limit spending growth to 0.625% in fiscal year 2025-26 (a $4.16 million smaller bump) and 1.25% growth in fiscal year 2026-27 (a $7.83 million smaller bump). Pillen said those percentage increases are the same as were afforded to the University of Nebraska. Pillen said the Legislature approved bumps of 2.7% in the first fiscal year and 4.8% in the second year. He said court spending had grown by 36% over the past five years and blamed Supreme Court administrative leadership for not taking 'necessary steps' to reduce spending. In his original budget proposal, Pillen sought to keep the Supreme Court flat at $232.82 million. He proposed cutting the university's budget by 2%, down to $676.99 million in general funds. 'Every branch of government must contribute to balancing our state budget,' Pillen said. In contrast, Pillen said the budget included no growth for the Governor's Office budget, as Pillen requested, and less than 1% spending growth for the Legislature. In a last-ditch effort last week, State Sen. Rick Holdcroft of Bellevue successfully preserved $3 million of a then-$5 million proposed cut to the Supreme Court, which court officials said could jeopardize certain problem-solving courts or other court services. Holdcroft said he was disappointed in the larger cut. Problem-solving courts are intensive court programs bringing individuals and families together with one-on-one interactions with judges, prosecutors and defense attorneys, law enforcement, court officials and more, often to help Nebraskans receive intervention or avoid imprisonment. This includes Adult Drug and DUI Courts, Veterans Treatment Courts, Reentry Courts, Juvenile Drug Courts, Young Adult Courts, Mental Health Courts and Family Treatment Courts. Corey Steel, state court administrator for Nebraska, said in a memo to lawmakers Thursday, before the veto constitutionality was challenged, that the funding reduction would lead to the elimination of: A DUI Problem-Solving Court in Lancaster County. A Mental Health Problem-Solving Court in Sarpy County. A Veterans Treatment Court in Sarpy County. A Drug Court in Platte County. All transition living reimbursements for adults on probation, post-release supervision or for those leaving problem-solving courts. Non-statutory services for juveniles on probation and a reduction in the reimbursement of many vital placements. Chief Justice Jeffrey Funke, whom Pillen elevated to the top role last fall, also pleaded with the Legislature to increase the court's budget. He listed a litany of items in his first State of the Judiciary address in January, in part because while the Legislature had increased the number of services the courts provide but had not always directed new funds specifically for those services. Funke said existing dollars would soon run out, telling lawmakers that court officials 'have done what you have asked.' 'It is essential that the Judicial Branch receive adequate funding for the next biennium to sustain the progress we have made,' Funke said. Those funds would be 'exhausted' at the end of the next biennium, Steel confirmed, and impact the sustainability of services such as judicial and guardian or conservator training. Steel attributed spending increases largely to legislative action responding to more Nebraskans in the judicial system, particularly high-need, high-risk individuals who require supervision. He said employees in all branches of government also received funding for salary increases. Steel said the Judicial Branch has also returned more than $30 million in unspent funds over the last six years, while, unlike other agencies, the court can't increase fees to offset any reductions. 'I urge the Legislature to override the governor's veto and again ensure these vital services, that save state and counties dollars by reducing incarceration, increasing community safety and rebuilding the lives of individuals and families,' Steel wrote. State Sen. George Dungan of Lincoln, a defense attorney, said the 2025 session has seen a 'systematic wind back' of funding for essential services and those to make Nebraska better. He said cutting Supreme Court funding would hurt veterans, those struggling with mental health and other public safety initiatives. 'If you actually want to make Nebraska safer, you'd be funding those programs,' Dungan said. State Sen. Dave Wordekemper of Fremont, a former longtime firefighter, said he was concerned that the veto of the Fire Marshal could possibly impact training for volunteer firefighters or in maintaining current services, which go toward keeping Nebraskans safe. Pillen also used his veto letter to voice disappointment in the failure of LB 170 on Monday to provide additional property tax relief and mirror the success in 2024 of decreasing property taxes statewide, the first time in 26 years. It was an exception to two earlier years of nearly $300 million increases in property taxes that came largely because the state increased spending to take on the portion of property taxes that would have been paid to community colleges. Multiple senators said the vetoes appeared targeted at specific lawmakers, such as freshman State Sen. Paul Strommen of Sidney, who represents Ogallala and Lake McConaughy. Strommen was one of seven Republicans who opposed the latest property tax proposal. 'The Legislature's failure this session means Nebraskans will not enjoy a repeat of this success,' Pillen said. Strommen said he was surprised and a little confused at the veto of Lake McConaughy funding. He said he would continue fighting for his western Nebraska constituents and hopes to override the veto. State Sen. Rob Clements of Elmwood, the Appropriations Committee chair, had no immediate comment on the vetoes. Pillen's letter did not acknowledge that LB 170 largely mirrored the same doomed special session approach from last fall on property tax relief — a session called at Pillen's request. The Pillen proposal in that session, too, tried to raise sales taxes and shift or use the revenue to offset property taxes. Pillen is 0-3 for such proposals. He pledged to hold property taxes flat this year and has said that without 'a shadow of a doubt,' he and allies would find additional property tax relief this year. The budget the Legislature passed will direct $57 million for more property tax credits and about $11 million for homestead exemption increases. There is no similar takeover of a taxing authority like the community colleges. Sales tax, tobacco tax push doom Nebraska's 'One Big Beautiful Bill' for property tax relief Some opponents of Pillen's cuts to public health departments said they would impact new and essential services and that local communities might choose to fill the hole using property taxes. State Sen. Machaela Cavanaugh of Omaha said it was particularly damaging as measles continues to spread. Pillen said that as 'stewards of the public's resources,' lawmakers must prioritize needs over wants and be 'conservative in good times as well as during fiscally challenging times.' 'Reducing spending is hard work, but Nebraskans expect us to exercise common sense and discretion in achieving a balanced, fair and operative budget,' Pillen wrote. 'Together we can reduce government growth, invest in our kids, provide tax relief to hardworking Nebraskans and remain true to our conservative values to make sure our state is the greatest state in the union to live, work and raise a family.' The Appropriations Committee was set to meet Thursday afternoon for a first crack at which of the vetoes, if any, to try and override. Doing so would require at least 30 votes. However, upon the veto questions being raised, the meeting was promptly canceled. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Yahoo
07-05-2025
- Business
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Nebraska lawmakers debate budget-balancing maneuvers into the night, advance key spending bill
State Sen. Rob Clements of Elmwood. Aug. 13, 2024. (Zach Wendling/Nebraska Examiner) LINCOLN — Nebraska lawmakers on Tuesday began grappling with key state budget bills, debating into the night on preferred ways to cut or preserve funding to state agencies and programs. Legislative Bill 261, based on a financial package put forth by Gov. Jim Pillen, is a mainline appropriations bill that dominated floor debate and assigns dollars to areas such as education, courts and economic development, along with state agencies. A budget book for Nebraska's fiscal years between 2025 and 2027 sits on a lawmaker's desk. (Juan Salinas II/Nebraska Examiner) After about eight hours, a 37-6 vote moved that amended legislation to the second of three rounds of lawmaking debate. State Sen. Rob Clements, chair of the budget-writing Appropriations Committee, said LB 261 holds 'flat' allocations to most agency operational budgets but allows for increases to employee salaries. It recommends about $11 billion in spending over the biennial. That's an average two-year spending increase of 1.5% over the current budget year. Financial challenges The Elmwood lawmaker spoke of challenges, including federal rate changes to Medicaid and a late dire report by the Economic Forecasting Advisory Board. The state was hit with $630 million in revenue reductions, he said. Going into Tuesday's debate, lawmakers faced a nearly $262 million projected budget deficit over the next two years. That includes all initial Appropriations Committee recommendations by mid-April, as well $136 million in changes to annual school retirement contributions and business incentives. 'We have absorbed those without making drastic cuts,' Clements said while encouraging support for the budget. 'So we're protecting our employees and then asking agencies to get by until revenues are increased.' Upon questioning by a few lawmakers, Clements acknowledged that the financial proposal, as is, does not present a balanced budget as required by the state Constitution. The Appropriations Committee plans an amendment for the second round of debate that will shore up an additional $135 million in reduced spending or additional cash fund transfers, and $132 million will be infused into the state's general fund pocketbook from the state's 'rainy day' cash reserve fund. Dual enrollment programs are helping Nebraska high school students earn college credit and in some cases associates degrees before graduation. Shown is the downtown Lincoln campus of Southeast Community College. (Aaron Sanderford/Nebraska Examiner) 'We're not even at the baseline question yet,' said State Sen. John Cavanaugh of Omaha, a nod to work that lies ahead to rightsize the state budget before the session ends, as required. Ten bills were folded into LB 261, including one that would direct $10 million to nonprofits that provide food assistance and another $10 million over two years from general funds so community colleges can provide more dual enrollment programs that help high school students earn college credit. Halt to projects Progressive-leaning lawmakers advocated for less funding for major state initiatives such as construction of the Perkins County Canal and a new state prison. They argued to spend more elsewhere, to avoid cuts to needed programs and services, including problem-solving courts aimed at keeping more Nebraskans stable and out of the court system. The appropriations proposal includes a $16.9 million increase to the Supreme Court and the state court system over two years, and Clements noted that the courts and other agencies could come back next year to request a bump. 'I do like those problem solving courts,' he said. The University of Nebraska, while set to get $13.1 million more over the next two years than it currently does, would be funded at less than requested and anticipated. NU President Dr. Jeffrey Gold has predicted possible tuition increases. A banner near the University of Nebraska-Lincoln campus on Mar. 16, 2025. (Juan Salinas II/Nebraska Examiner) Upon questioning by State Sen. Danielle Conrad of Lincoln, Clements said the Nebraska Promise tuition-free assistance program for undergraduates still exists for families with very low incomes. Conrad lauded that program generally open to Nebraskans with family incomes of $65,000 or less, but said it does not apply to a major portion of students. She criticized the proposed sweep of one-time cash funds from multiple agencies to prop up the state's financial picture. 'This budget is cobbled together with bailing wire and bubble gum,' said Conrad. 'It limps us along … with no clear plan for the future and no answers as to what this means for our state's leading institutions like the university.' 'Would you run your family business like this? Would you run your family budget like this?' Hurting 'everyday people' Conrad joined other Democratic lawmakers, including State Sen. George Dungan of Lincoln, who pushed back on factors they said created a service-slashing environment he said would hurt 'everyday people.' Said Lincoln State Sen. Jane Raybould: 'There can be no denying that when we passed the accelerated income tax rate reductions in 2023, we were setting ourselves up for a structural imbalance.' State Sen. Jane Raybould of Lincoln talks with State Sen. Stan Clouse of Kearney. (Zach Wendling/Nebraska Examiner) She said she pointed out to colleagues then, and during the more recent Pillen-backed property tax relief push, that such efforts were not sustainable. 'There was no revenue to supplant the revenue lost.' To alleviate the budget shortfall, Raybould suggested reducing by $100 million the amount headed toward the Perkins County Canal, pausing for two years the new prison build and freezing phased income and corporate tax reductions (as proposed by Legislative Bill 171 by State Sen. Tom Brandt of Plymouth). Several lawmakers, including State Sen. Mike Jacobson of North Platte, defended funds earmarked for the western Nebraska canal, which would transport water from the South Platte River in Colorado into Nebraska and has spurred water rights debates between the two states. 'Let's be clear: We're taking away the state's future to water rights if we take money out of that fund,' Jacobson said. 'If we flinch now we will never get this built. No one will take us seriously.' State Sen. Christy Armendariz of Omaha called the canal project a good long-term investment. 'Water is the current gold, from what I hear,' she said. 'Taking the money away from it is just robbing our future.' State Sen. John Cavanaugh advocated for cutting back the canal fund over slashing a water conservation fund that benefits such efforts as irrigation reuse pits and water ways. Meals on wheels Part of the morning debate focused on what turned out to be a controversial amendment proposed by State Sen. Glen Meyer of Pender to direct $4 million to senior centers and Meals-On-Wheels programs across the state. No senator voiced opposition to the boost for the aging, but several objected because tying the Meyer bill to the budget package essentially killed his previous version that had included an amendment from State Sen. Terrell McKinney of North Omaha. State Sen. Terrell McKinney of Omaha. (Zach Wendling/Nebraska Examiner) That McKinney amendment included his priority legislation that funds a pilot program designed to help keep at-risk youths out of jail. McKinney, angry about what he called political maneuvering to sidestep his priority bill, vowed to be a 'disruptor' of the remaining days of the session if his Family Resource and Juvenile Assessment Center pilot did not survive. Subject to available funds, it aimed to use up to $1 million annually for five years from a Medicaid cash fund. An amendment by State Sen. Dunixi Guereca of Omaha, which passed on a 29-7 vote, was the day's only change. Guereca proposed directing $300,000 to the Special Olympics from the health care cash fund, which is filled by the tobacco settlement fund. The move was opposed by senators including Clements, who said he is still uncertain how an earlier $500,000 award to the group was used. State Sen. Merv Riepe of Ralston called the Special Olympics an excellent cause and said such funding would be fine if the state 'were rolling in cash.' He said hospitals and philanthropists should supply those dollars. 'This is not one of our primary core businesses,' he said. State Sen. Rob Dover of Norfolk, in a nod to an often contentious and continuing budget-setting process, said: 'We are divided by party and by urban and rural. But hopefully we can respect each other and have a good debate.' Major changes The budget advanced by the Appropriations Committee two weeks ago has the following major changes compared to November: $193.6 million less spending than originally projected. $160.4 million in sweeps of various cash funds or other transfers to the state's main pocketbook (such as $27.7 million from the Water Recreation Enhancement Fund, $20.5 million from the Economic Development Cash Fund, $15 million from the Economic Recovery Contingency Fund, $13.5 million from the Site and Building Development Fund, $12 million from the Intern Nebraska Cash Fund, $10.2 million from the Youth Outdoor Recreation Fund, $8.6 million from the Health and Human Services Cash Fund, $7 million from the Vehicle Title & Registration System Replacement Fund, $4.4 million from the Jobs and Economic Development Initiative (JEDI) Fund and $4 million from the Lead Service Line Fund). $50.3 million in investment earnings (such as from the Perkins County Canal Fund, Inland Port Authority Fund, 911 Service System Fund, Economic Recovery Contingency Fund and the Nebraska Capital Construction Fund). $39.6 million in fewer transfers to existing cash funds ($22 million less to the Water Sustainability Fund, $16 million less to the Education Future Fund and $5 million less to the Property Tax Credit Fund, but $2 million more to the Public Advocacy Cash Fund). Nebraska Examiner reporter Zach Wendling
