Nebraska Lawmakers Advance New $8.8 Billion State Budget

LINCOLN — Nebraska lawmakers gave initial approval Tuesday to a proposed $8.8 billion two-year budget despite major disagreements over funding for the University of Nebraska and family-planning services, including Planned Parenthood.

Lawmakers advanced all three of the budget measures that make up the package, even as many senators raised concerns that state officials are relying too much on their emergency cash reserve. Two additional votes are required before the bills go to Gov. Pete Ricketts.

The package would balance the state’s finances through a combination of spending cuts, reclaiming unused money from state agencies and tapping into 73 different state accounts that are separate from Nebraska’s general fund. Many of those stand-alone accounts receive money from fees and were created for a specific purpose, such as maintaining state parks or providing affordable housing grants.

“It’s not an ideal approach but needs to be done to balance the budget after state revenue fell short of expectations,” said Sen. John Stinner, of Gering, chairman of the budget-crafting Appropriations Committee. Lawmakers began this year’s session with a projected $173 million shortfall and are almost certain to reject any tax increase.

“These are extraordinary times,” Stinner said.

Several senators raised concerns about the state’s cash reserve, which would fall to $296.4 million if the budget passes, down from a high of $730.7 million in fiscal year 2016. Stinner said the state should maintain at least $250 million in the reserve.

Sen. John Kuehn, of Heartwell, an Appropriations Committee member, said the package draws too heavily from the rainy-day fund, which is generally used for emergencies and one-time expenses.

“I’m not sure how long it’s going to continue to rain,” he said, and lawmakers “have hamstrung the options of this Legislature going forward.”

Sen. Paul Schumacher, of Columbus, issued a stern warning that the budget could create future revenue problems that force state officials to cut even more or raise taxes. Schumacher, who leaves office in January because of term limits, said his fellow senators are on pace to end up in a worse situation in future years.

“We are in really bad financial shape, and we are making it worse,” he said.

Lawmakers also debated a provision inserted by Ricketts to prevent health clinics from getting so-called Title X funding from the federal government if they offer abortions. The Republican governor announced the proposal in January, arguing that Nebraska’s budget should reflect its status as a “pro-life state.”

The Obama administration previously prevented states from withholding federal money from clinics that might provide abortions, but President Donald Trump reversed that directive last year and gave the states far more leeway in how they distributed Title X money.

Supporters of the proposal said organizations such as Planned Parenthood could continue to receive such funding only if they maintain “physical, financial and legal separation” between their abortion operations and other services. They also said Nebraska risks losing federal funding if legislators don’t approve the measure, an assertion denied by senators who support abortion rights.

“This has no business being in the budget,” said Sen. Adam Morfeld, of Lincoln.

Lawmakers are likely to debate proposed funding cuts to the University of Nebraska when the issue comes up again. Ricketts proposed 2 percent in cuts this year for the university, followed by a 4 percent reduction from the amount the Legislature approved in 2017. The Appropriations Committee recommended keeping the first-year cut at 2 percent, but lowering the cut to just 1 percent in the next fiscal year.