Legislature moves toward budget cuts

The Nebraska Legislature moved toward advancing a series of budget cuts Wednesday, despite arguments they could hurt services and were not necessary.

One day after they advanced LB34, to expand a property tax credit program, senators wrestled Wednesday with how to pay for it, and whether those decisions needed to be made in this legislative special session.

Sen. Danielle Conrad argued the Legislature doesn’t have to act now.

“We can easily make necessary adjustments when we reconvene in approximately, what -- four months -- for our regular session to take up the next biennial budget and the work before the Nebraska Legislature," Conrad said. "There is absolutely no reason to take these cuts, take these lapses, make these adjustments at this time, it is truly unnecessary and primarily performative."

Sen. Rob Clements, chair of the Appropriations Committee, took the opposite view. Clements was asked if the Legislature needed to pass the budget-cutting bills to pay for the expanded property tax credits contained in LB34.

“Yes, we do. We need to be able to fund the additional money," he said. "LB34 has more money than what is currently in the property tax credit fund, $185 million. So we do need LB2 and (LB)3 so that we can give the property tax relief."

LB2 would take back, or lapse, about $76 million that was appropriated to state agencies last year but has not been spent. LB3 transfers about $32 million in cash held by various departments this fiscal year, and captures the interest earnings from those funds in the future.

More from the Legislature's special session:

Legislature advances vastly scaled-back property tax bill

Legislature tees up key property tax vote for Tuesday

Senators continue thrashing around on taxes

Special session debate: Should there even be a special session?

Legislature considers budget cuts in special session

Scaled-down version of property tax cuts proposed

Sen. Ben Hansen said it was appropriate to use those funds for property tax relief, rather than letting state agencies hold on to them.

“We don't think it's maybe appropriate that all these agencies and committees should have money set aside to do with what they will when they want to," he said. "I don't think it's appropriate to have taxpayer money just floating out into space there for other agencies to use when they want to. We appropriate it. If you don't use it that year, you come back to us and ask for more."

Supporters of the cuts argued that government needs to operate like a business. But Sen. John Fredrickson argued against that.

“Government is not a business, nor should government be run like a business," he said. "Government exists to ensure the safety and well-being of the people. Businesses exist to make profit, two very different fundamental goals and purposes."

Sen. Christy Armendariz, a member of the Appropriations Committee, pushed back on that argument.

“It was brought up that government is not a business," she said. "You may agree with that. You may disagree with that. Regardless, in Appropriations, it is … a business function that we do there. Anytime there are funds, which are taxpayer funds, money exchanged for services, which we do as government, there are business principles that are applied."

Among the proposed cuts are $10 million from the Department of Correctional Services, which runs the state’s prisons. Sen. Terrell McKinney questioned that, saying prisons are overcrowded and understaffed, and could use the money for programming for inmates. Clements said Corrections is planning on saving money by hiring nurses as state employees, rather than paying high costs for traveling nurses. He said that was an example of improved efficiency cited by Corrections Direct Rob Jeffreys.

“There’s efficiencies they are finding,” Clements said.

“What efficiencies?” Cavanaugh asked.

“That was the only description I received in the hearing,” Clements replied.

“The only description you heard in the hearing for $10 million is efficiencies, and you didn't ask what the efficiencies were?” Cavanaugh asked.

“The director said he was very comfortable with the budget removing $10 million,” Clements said.

“The director of Corrections?” Cavanaugh asked.

“Yes,” Clements confirmed.

“Who works at the pleasure of the governor, so his boss told him that he was going to be okay with the ten million cut,” Cavanaugh said.

Despite such concerns, senators rejected a series of motions designed to delay or eliminate the changes to the budget, and moved toward giving them first-round approval.

After eight hours of debate, lawmakers voted 33-11 for the budget changes proposed in LB2, one of the two budget bills. The special session continues Wednesday.