Ricketts wields veto pen, says Nebraska needs to save money for tax cuts

Wishart says Legislature’s ‘incredibly modest’ budget left room for tax breaks and provider rate hikes
Nebraska State Capitol Building
Posted at 9:01 PM, Apr 04, 2022

LINCOLN, Neb. (Nebraska Examiner) — Citing a need to preserve state funds for tax cuts, Gov. Pete Ricketts wielded his veto pen Monday, reducing general fund expenditures by nearly $52 million.

“My vetoes will ensure that Nebraska is poised to provide top-notch government services while keeping tax relief a possibility,” Ricketts said in a news release.

 His cuts, he said, would reduce the growth in state expenditures to 4.8% in the 2022-23 fiscal year. The budget bill passed by the Nebraska Legislature raised that spending by 5.9%.

State Sen. John Stinner of Gering, who heads the Legislature’s budget-writing Appropriations Committee, said he was “very, very disappointed” in the governor’s vetoes.

Nursing homes closing

He said the only general fund increases were for provider rates, adding that it was hard not to fund those when nursing homes are closing in the state.
“I’m going to have a hard time providing tax cuts on the backs of provider rates,” Stinner said. 

Meanwhile, Lincoln Sen. Anna Wishart of Lincoln, the vice chair of the Appropriations Committee, called the budget passed by state lawmakers “incredibly modest” and expressed confidence that legislators would override the vetoes. 

“The areas that we prioritized will be beneficial to all Nebraskans,” the senator said. “And we left room for a $900 million tax cut and left $1.3 billion in the state’s rainy day fund.” 

Among the items subject to line-item vetoes by the governor:

  • Provider Rates: Provides for a 5% increase in rates paid to providers of social services rather than the 15% hike in the Legislature’s budget. It reduces general fund expenditures by $51.8 million.
  •  Capitol HVAC: Vetoes $14.8 million increase in costs for State Capitol HVAC project, while allowing for an increase of $10.5 million due to supply chain disruptions and inflation.
  •  Middle Income Housing: Eliminates $20 million transfer to Affordable Workforce Housing and reduces the cash fund appropriation by the same amount. Allows $40 million in ARPA funding to remain, which the governor said in a news release “is more than sufficient to grow housing inventories.”
  •  Rail-trail route: Cuts in half the $8.3 million allocated for completion of the trail between Omaha and Lincoln, to $4.15 million. Private funding, the governor’s veto letter stated, “must be part of the solution.” 
  •  Community Corrections: Eliminates $15 million transfer from Prison Overcrowding Contingency Fund to Vocational Life Skills Program Fund. The transfer would have inappropriately reduced a fund, the governor said, that was already set aside for replacement of the State Penitentiary.
  •  Governor’s Emergency Cash Fund: Eliminates a $14 million transfer to the cash reserve fund to ensure a sufficient balance to fulfill obligations for hospital decompression units and closeout of CARES Act grants.

Enough provider rate hikes

The governor’s veto message to state lawmakers said that provider rate increases within the Nebraska Department of Health and Human Resources and the Supreme Court would have cost $96 million a year beginning in 2023-24. 

Sufficient rate increases, the letter said, are already provided through the budget and ARPA funds.

“It’s important that we strike the appropriate balance between calibrating government spending and returning excess revenue back to the people,” wrote Ricketts. “That is how we responsibly steward taxpayer money.”

Wishart, though, said the provider rate hikes would help those who provide services for the developmentally disabled, senior citizens and children needing state care a chance to compete for workers against the pressures of salary hikes in other jobs. 

Goal: $18 an hour

The Appropriations Committee’s goal was to increase pay from about $12 an hour to $18 an hour, which she said is not unreasonable for such difficult work.

Meanwhile, University of Nebraska President Ted Carter praised the budget items signed by the governor Monday as making “important investments in workforce development, research and innovation.”

Carter cited the governor’s support for a pancreatic cancer research center at the University of Nebraska Medical Center and the planned agricultural research facility at Innovation Campus in Lincoln.

Nebraska Examiner is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Nebraska Examiner maintains editorial independence. Contact Editor Cate Folsom for questions: Follow Nebraska Examiner on Facebook and Twitter.

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