Gov. Dave Heineman said Thursday the state cannot afford to help pay for an ambitious $441 million capital initiative that University of Nebraska officials unveiled this week.
The initiative would include a cancer research center in Omaha, a nursing facility and veterinary diagnostic center in Lincoln and a health care training facility in Kearney.
"The highest priority in this legislative session is tax relief for hard-working, middle class Nebraskans," he said. "Additionally, we need to rebuild the cash reserve to protect against a future economic downturn. While the university's four proposed capital construction projects may have some merit, it would be bad timing. We need to rebuild the cash reserve before using it for one-time funding projects."
NU President J.B. Milliken said the university looks forward to discussing its proposal with the governor and Legislature.
"We take seriously our obligation to help address some of the critical research, education and healthcare issues facing the state. Our proposal does this as well as generate jobs and significant economic growth. We believe the state can support it with a one-time investment."
Heineman said last week in his annual State of the State address that he wants to provide nearly $327 million in income tax relief over the next three years. Heineman proposes lowering individual income tax rates and expanding brackets; helping small businesses grow by lowering the top corporate tax rate to the same rate as the top individual rate; and repealing the inheritance tax.
Heineman's plan, starting next year, would provide $274 million for individual income tax relief and $53 million for businesses.
Heineman also is recommending cutting the current state budget by another $29 million.
The Legislature would be asked to pay $91 million initially for the NU plan and another $50 million later. Private donations and other sources would account for at least $300 million for the cancer center at the University of Nebraska Medical Center in Omaha.
The money for the NU initiative would come from the state's cash reserve, which is expected to reach $413 million this year.
The state is in the first year of its two-year budget cycle. Legislative fiscal analysts project a $34 million surplus at the end of the two-year period. But they project a $430 million shortfall at the end of the next budget cycle.
Sens. Tony Fulton of Lincoln, Galen Hadley of Kearney, John Nelson of Omaha and Tom Hansen of North Platte sponsored legislation for the various pieces of the NU initiative.
NU officials have said the project is needed because of a growing nursing shortage and an increased demand for other health-care professionals.