Senators override one gubernatorial veto, to grant additional funds for auditor

State auditor had argued that his staff was being ‘raided’ by state agencies that could pay much higher salaries

By: - May 31, 2023 7:16 pm
state auditor

The Nebraska State Auditor’s Office is located in the State Capitol. (Paul Hammel/Nebraska Examiner)

LINCOLN — State lawmakers largely stuck with Gov. Jim Pillen on Wednesday, approving only one override of his budget vetoes — an additional $1.2 million for the State Auditor’s Office.

State Auditor Mike Foley had asked for additional funding, arguing that he was losing auditors to other state agencies because they could offer $20,000 to $30,000 more a year in pay due to 22% pay raises for state employees effective July 1 — raises not granted to auditor personnel.

Mike Foley
State Auditor Mike Foley (Courtesy of  Nebraska State Auditor’s Office)


“It’s one thing to be raided by CPA firms that can pay big dollars, but when you get raided by state agencies, that’s pretty painful,” Foley said.

But Pillen, looking to preserve funds for his tax cuts and other initiatives, had vetoed about $1.2 million over two years for the Auditor’s Office to increase salaries and add two new positions.

State Sens. Steve Erdman of Bayard and Wendy DeBoer of Bennington led the argument for restoring funding for the auditor.

DeBoer said that staffing at the office had fallen from about 60 to about 40 in recent years and that the auditor’s work was never more important, given the glut of federal and state funds being spent in the last couple of years.

State Senator Wendy DeBoer of Bennington speaks on the floor of the Legislature
State Sen. Wendy DeBoer of Bennington. (Zach Wendling/Nebraska News Service)

“We’ve got to keep track of this money,” she said.

Erdman said that the auditor’s staff had been “cannibalized” by other employers and that due to the turnover, audits were being delayed.

Audits delayed

The State Department of Education, for instance, hasn’t been audited in 10 years, he said, when usually such agencies are audited every five to seven years.

The vote to override the veto was 31-14, with Omaha Sens. Megan Hunt and John Fredrickson changing their votes at the last minute from “not voting” to “yes.”

Thirty votes are needed to override a gubernatorial veto, and other attempted veto overrides fell short, with several senators arguing that overriding the governor could spoil the package of bills that has been passed this year.

Don’t end session on ‘bad note’

“I think Governor Pillen and his team has been accessible, willing to listen, easy to work with. I don’t want to end a very successful year on a bad note,” said Elkhorn Sen. Lou Ann Linehan, who had worked with Pillen on several tax relief and education measures.

State Sen. Rob Clements of Elmwood. (Zach Wendling/Nebraska News Service)

Elmwood Sen. Rob Clements, who chairs the budget-writing Appropriations Committee, also stuck with the governor, saying that he had justified his vetoes.

Pleas from some senators that the Legislature was a “separate branch of government” and that overriding a gubernatorial veto wasn’t anything out of the ordinary or in any way “personal” didn’t resonate.

Among the other budget overrides that failed were:

Restoring $14.8 million for an increase in provider rates for hospitals and nursing homes that care for Medicaid recipients. That amount would have leveraged an additional $29 million in federal funds.

The budget approved by the Legislature called for increases of 3% and 2% in the next two fiscal years, but Pillen vetoed the second year increase, leaving funding for that year flat.

North Platte Sen. Mike Jacobson said he realizes that hospitals and nursing homes in rural areas are hurting financially but argued that an interim study to be conducted this summer will help determine how much of a provider rate increase is necessary.

Senators, he said, can vote next year to increase the payments if necessary.

Lincoln Sen. Danielle Conrad, meanwhile, argued it wasn’t fair that the state was approving billions of dollars of tax cuts for the state’s wealthiest residents while “skimping corners” for providers, and additional funds for the Children’s Health Insurance Program — another Pillen veto — which provides health care for “some of the poorest children” in the state. 

Last year, 11 nursing homes in Nebraska closed, and more than half of the state’s hospitals operated in the red, prompting calls for increases in provider rates.

Sumner Sen. Teresa Ibach said that rural hospitals in her central Nebraska district — which rely on Medicaid and Medicare for 60%-80% of their revenue — were suffering under steep increases in workforce and drug expenses.

“They’re a lifeline for our rural citizens,” Ibach said, of the hospitals.

$40 million for workforce housing in rural and urban areas.

Nearly 30 local chambers of commerce, the Nebraska Chamber of Commerce and local economic development organizations urged the Legislature to override the veto.

Adequate workforce housing, they argued in a letter, was critical in attracting workers to the state to fill the approximately 65,000 jobs that are unfilled across the state.

“If we have housing, we can bring in workers, and if we have workers, we can grow our economy,” said Grand Island Sen. Ray Aguilar, who rarely speaks on bills.

But Pillen had vetoed the funds, saying he wanted to protect the state’s cash reserves — the source of the housing funds — and didn’t want to “flood the market” with government-funded housing.

Clements said there was an unallocated balance of $8 million in the rural workforce housing account and $23 million in the urban “middle” housing program. He added that the state’s cash reserve fund had been depleted beyond expectations so that the upholding the veto would help.

Clements said it would be “reasonable to assume” the housing funds could be restored next year.

But Omaha Sen. Tony Vargas said most of those housing funds would soon be allocated, leaving little to spend next year on a program that has proven effective on addressing the state’s housing shortage.

Other veto overrides that failed would have restored funds for the state Court Appointed Special Advocate (CASA) program, for pay raises for court interpreters, and salary increases for state legislative staff.

Legislative staff pay

On Wednesday morning, the Legislature’s Executive Board voted to provide 15% salary increases for legislative staff but to use reserve funds kept by the Legislature, not state general funds.

Pillen had vetoed the use of state general funds, maintaining that the Legislature should use its own reserve funds.

Some lawmakers argued that it was wrong to use one-time reserve funds to provide competitive salaries for legislative staff and that legislators should override the veto.

“This is inappropriate for the governor to tell us how to spend our money,” said Omaha Sen. John Cavanaugh. He said there was too much talk in the Legislature about upholding the vetoes from the executive branch.

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Paul Hammel
Paul Hammel

Senior Reporter Paul Hammel has covered the Nebraska state government and the state for decades. Previously with the Omaha World-Herald, Lincoln Journal Star and Omaha Sun, he is a member of the Omaha Press Club's Hall of Fame. He grows hops, brews homemade beer, plays bass guitar and basically loves traveling and writing about the state. A native of Ralston, Nebraska, he is vice president of the John G. Neihardt Foundation.