Preliminary state budget lowers university funding

2013-02-28T04:00:00Z 2013-02-28T19:41:06Z Preliminary state budget lowers university fundingBy JoANNE YOUNG / Lincoln Journal Star

The Legislature's Appropriations Committee has put its own fingerprints on the state's proposed $7.8 billion preliminary budget for the two years beginning in July.

And while the committee agreed with much of Gov. Dave Heineman's budget recommendations, released in January, there are some major differences.

The University of Nebraska's budget request is one of those differences.

The governor proposed increasing the university's funding by $62 million over the two years, to enable a two-year tuition freeze. The committee would increase funding for the university, but by much less, offering $36 million.

Appropriations Committee Chairman Heath Mello said higher education is a priority, but the committee also has others.

The Legislature spent a lot of money on the university in the previous two years, he said, with new construction and improvements including $25 million in 2011 for Nebraska Innovation Campus and about $115 million in 2012 for three construction projects, including a cancer research center at the University of Nebraska Medical Center and a College of Nursing building in Kearney.

The committee is frequently more conservative in its initial appropriation to be able to make increases and decreases after agency hearings, which are going on through March, he said.

The final budget bills are due out May 1.

"The university was one area that no doubt will see a post-hearing adjustment," Mello said.

But one consideration will be finding an increase that is sustainable, he said. Available revenue in 2013-15 is $129 million lower because of two bills passed in 2011 and 2012. They were LB84, the roads funding bill that set aside part of the state sales tax, and LB970, which provided income tax reduction.

Other differences in the committee and governor's budget include:

* The committee is not at this time funding a central Nebraska veterans home or construction of a chemical dependency unit at the Hastings Regional Center.

The governor recommended using $47 million from the state's rainy day fund, or cash reserve, to match dollars for a new veterans home. But the committee didn't have the information on the project it needed, Mello said. 

The committee is supportive of building the home, but it's possible the project could wait, he said. 

The Hastings Regional Center project also was delayed because of a lack of information, he said.

* The governor's budget proposal did not address the $97 million in school employee retirement the state is obligated to pay in 2013-14. The committee set aside about $20 million for that purpose. And negotiations are going on now with school employee associations to lower the obligation to match the Appropriations Committee offer, he said.

Nebraska Retirement Systems Chairman Jeremy Nordquist said the pension plans have had to absorb investment losses in prior years.

* The committee made an adjustment in rate increases for developmentally disabled service providers in order to put $6 million toward funding the waiting list of people wanting services. There are about 2,200 people on that list, about 1,775 in need of services now and 486 some time in the future, according to the state Department of Health and Human Services. 

The department has estimated the cost to serve that number would be $48 million in state funds.

"These are the most vulnerable Nebraskans in the state and we're still not fully meeting the obligation of being able to provide services to those individuals," he said. "The governor provided no funding in his budget to deal with the waiting list."

The committee's proposed budget total came in about $20 million under the governor's proposal.

K-12 schools would get about the same increase recommended by Heineman, about 5 percent over the two years. Mello characterized the amount as a "comfortable starting point."

* The governor also recommended purchasing a 2001 King Air B200 from the University of Nebraska Foundation for about $2 million. That item has not yet found its way into the committee's budget.

Committee members had a lot of questions on whether better options -- such as time shares and chartering flights -- were available to the state, Mello said. The Department of Aeronautics declined a request for a study on long-term costs and other options.

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