LINCOLN — Nebraska lawmakers debated into the evening Thursday before giving first-round approval to a $9.7 billion, two-year state budget plan.
Senators advanced the main budget bills with no dissenting votes after making only one $900,000-per-year change in the Appropriations Committee proposal.
But a bigger fight is looming Friday, when lawmakers take up the state’s capital construction budget and an amendment to prepare designs and select a site for the new $230 million prison pushed by Gov. Pete Ricketts.
State Sen. John Stinner of Gering, the committee chairman, introduced the amendment, which would put almost $15 million toward planning for a prison to house 1,512 inmates.
The amendment would also put $18 million toward adding three units to the reception and treatment center in Lincoln for mentally ill, geriatric or other special-needs prisoners and would put $500,000 toward a smaller community corrections facility in Omaha.
Stinner’s amendment breaks with the actions of his own committee, which set aside $115 million to address prison overcrowding but did not appropriate the money for a new prison. The amount of money matches what Ricketts had sought to start construction on the proposed prison.
The committee’s vote came after Stinner told it that the wait-and-see approach would give the state more time to determine the best course of action on its prisons, including time to receive the results of a planned study of criminal justice reforms.
Sen. Justin Wayne of Omaha responded to Stinner’s new amendment with one of his own, which would eliminate the $15 million appropriation but leave the other new corrections spending. The proposed new prison would be one of the most expensive state construction projects in Nebraska history, and would require an additional $34 million a year to operate.
On Thursday, senators found little to argue about in the main budget bills, but debate slowed as Sen. Machaela Cavanaugh of Omaha chastised colleagues for leaving her off of a special committee investigating the state’s problematic contract with St. Francis Ministries, the Kansas-based nonprofit managing Omaha-area child welfare cases.
Cavanaugh pushed through the resolution creating the committee and has done extensive research into the original $197 million, five-year contract that was signed in July 2019 and the events that followed. The decision to leave her off the committee she created was extremely unusual. She accused colleagues of bowing to the governor.
Senators chosen for the nine-member committee include only four senators from Douglas and Sarpy Counties, the area covered by the St. Francis contract. Five are Republicans, like Ricketts, and one voted against the creation of the committee.
In the only change to the budget, Sen. Mike Flood of Norfolk convinced lawmakers to boost the amount of grant funding available to creative districts to $1 million a year. The committee had included $100,000 a year for such grants.
He argued that the state should invest more to have a significant impact. A law setting up a creative, or cultural, district program passed last year. The districts bring together cultural and artistic ventures to boost economic development and community revitalization efforts.
Cavanaugh introduced an amendment to serve everyone on the developmental disability waiting list at a cost of about $54 million a year. She ended up withdrawing the proposal after others argued for a slower approach that would include rate increases to bring in more providers.
As advanced, the budget package would put $1.45 billion into direct property tax relief over the two years ending June 30, 2023. That would be a 65% increase from current property tax efforts.
The package leaves about $210 million for other legislative priorities, while beefing up the state’s rainy day fund by transferring $100 million into the fund. The infusion of money would put the cash reserve fund at an estimated $763 million by June 30, 2023, or about 14.2% of state revenue.
Major items in the budget include almost $90 million allocated over the two years to give 2% annual increases in payment rates for health and human services providers and about $37 million for a 2% annual boost in support of the University of Nebraska.
The budget plan would put more money toward economic development efforts, such as job training, venture capital for entrepreneurs and scholarships for students in high-demand fields.
It also sets aside $50 million as the state’s contribution to construction costs if Nebraska were to land the U.S. Space Command headquarters. The U.S. Air Force announced in January that Alabama had been selected for the headquarters, but the Department of Defense inspector general is reviewing the decision.
The budget package provides for state spending growth averaging 1.6% for the two-year period. The committee was able to keep spending growth lower than normal because of some one-time factors. Those include a higher federal match for Medicaid, a lower-than-expected school aid increase and federal coronavirus relief. The spending growth figure does not include money used for property tax credits.