Legislative committee recommends slightly higher spending than governor

LINCOLN — The Nebraska Legislature’s budget committee voted out a proposed state budget Tuesday that calls for an average increase of 2.3% in spending over the next two fiscal years.

The proposed budget by the Appropriations Committee compares to a 1.5% increase recommended by first-year Gov. Jim Pillen.

The main differences between the two proposals is that lawmakers have included an additional $80 million to increase rates for providers of Medicaid services and have upped the budget increase for the University of Nebraska system from Pillen’s proposed 2% to 2.5%.

The proposal also includes raises for state employees negotiated by a state labor union of 7% in the first fiscal year and 5% in the second.

“We’re providing for the state’s needs,” State Sen. Rob Clements of Elmwood, who chairs the Appropriations Committee, said of the budget proposal.

Compromise on university funding

Clements said the 2.5% increase in NU’s budget was a compromise between the governor’s proposed 2% increase and the 3% request from the University.

The higher increase in provider rates, the senator said, was needed because those who provide Medicaid services in nursing homes, hospitals and medical clinics made the case that higher salaries are needed to keep and attract workers.

The provider rates would rise by 3% in 2023-24 and 2% in 2024-25, as opposed to rate changes of 2% and 0% offered by Pillen.

Clements said he had not yet heard whether the governor is OK with the higher increases or if he might choose to use his veto pen.

Prison, canal, environmental trust

Among the highlights in the budget are the final funding for a new, $366-million prison somewhere in the Omaha/Lincoln area and setting aside $574 million to build the long-abandoned Perkins County Canal.

A controversial proposal to transfer $14 million in state lottery proceeds out of the Nebraska Environmental Trust was part of the budget, as was allocating $1.5 million as seed money toward building a museum/visitors center in the unused fifth floor of the State Capitol Rotunda.

Debate on the legislative budget is scheduled to begin May 3.

The Appropriations Committee’s budget calls for spending of $5.34 billion of state funds in 2023-24 and $5.36 billion in 2024-25.