Budget advances, tax sniping continues

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March 13, 2012 - 7:00pm

The Legislature gave first-round approval to proposed changes in the state budget Wednesday, as sniping continued over whether a tax cut could fit into it.

The budget contains a fistful of capital construction projects at campuses of the University of Nebraska and the state colleges. There's $50 million towards a cancer research tower at the university Medical Center in Omaha. There's $7.5 million for renovations to the Oak Bowl stadium at Peru State College, $6.7 million for an addition and renovation of the Armstrong Gymnasium at Chadron State, and $6 million toward an eventual $60 million for a Veterinary Diagnostic Center in Lincoln.

There's also $15 million for a building to expand a nursing program and establish other health programs in Kearney. Sen. Galen Hadley of Kearney said that's needed, not only to keep young people in rural Nebraska, but to enhance services and keep people in towns throughout the area. "If you want to look out 20 years, if we don't have medical health care in outstate Nebraska, what are we going to have?" he asked. "How are you going to convince people to move to Ainsworth, Atkinson, those kind of places, if you say You want to go (to) health care? You get in your car. How far? Oh, it's only 130 miles.' Is that what we want? I don't think so."

Except for the ongoing appropriations for the veterinary diagnostic center, all the construction projects are being funded from the state's cash reserve.

But funding for the rest of the budget, and whether it conflicts with Gov. Dave Heineman's proposed tax cuts, remains a subject of controversy. Omaha Sen. Steve Lathrop renewed the attack on the governor's proposals, which would add about $140 million to a projected $460 million shortfall in the next two-year budget. "We must be careful, colleagues, in the next few weeks not to create a crisis for ourselves," he warned. "If we take the deficit to over $600 million for the next biennium, we are creating a crisis for the next Legislature."

That drew a rebuke from the governor, who declared "Sen. Lathrop favors increased spending and he opposes tax relief for low income and middle income Nebraskans. His priorities are misguided in my opinion."

"Sen. Lathrop wants Nebraska to take a step backwards," Heineman continued. "I don't. I want us to move forward. And the way to move forward is to continue to control your spending, lower taxes, and create a more business-friendly, job-friendly and family- friendly environment."

Senators gave the budget bills first round approval. The tax bill has not yet come up for debate.

Wednesday afternoon, senators debated a proposal to reimburse agencies that provided services to children but were not paid under the state's controversial child welfare privatization. Agencies who were subcontractors to the lead contractor throughout much of the state outside the Omaha and Lincoln areas say they are owed $2.5 million. Lathrop, chairman of the Business and Labor Committee, argued that even though it was the lead contractor - Boy's and Girl's Home -- who didn't pay, the state should pay because it was obliged to serve the children. "We didn't discharge that duty because we picked somebody who was incompetent. Not that they didn't have a good heart - everybody who came in front of the committee told us they were good at what they did, which was providing services. (But) they had absolutely no experience in coordinating them," Lathrop said.

Other senators worried that the state would be setting a bad precedent by paying the claims. Among them was Omaha Sen. John Nelson, who said "The services were provided to the children. They were paid for. They were paid to the lead contractor." "I don't think that the statute says that we have to pay twice," Nelson told Lathrop. "I hear words like fairness,' It's the thing to do,' It's appropriate.' That's not contract law."

Senators adjourned for the day without reaching a vote on the proposal.




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