Heineman discusses pipeline, University and K-12 funding

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January 18, 2012 - 6:00pm

Gov. Dave Heineman said Thursday that President Barack Obama's rejection of the proposed Keystone XL pipeline, at least for now, leaves Nebraska officials scrambling to figure out what that means for Nebraska.

In rejecting the proposal on Wednesday, Obama and administration officials said there wasn't enough time to study matters, including a new route through Nebraska, before the Feb. 21st deadline set by Congress.

But in an interview with NET News, Heineman said things didn't have to go that way. (To see the complete interview, click here.)

"First of all, I'm disappointed, because I thought he could have made a conditional yes. And TransCanada was perfectly willing then to start on the northern and southern borders of the United States and begin to build the pipeline while we finish our process here in Nebraska," Heineman said. "To me, it's a decision that said no to American jobs, but greater dependence on Middle Eastern oil. And we shouldn't go there."

Heineman said Nebraska has already hired a consulting firm to evaluate TransCanada's proposal for a new route to avoid the Sandhills, which he said was close to submitting a report.

If TransCanada now has to submit a new application, he says, that could trigger a review by the Public Service Commission. A law passed in last year's special session created an expedited review for the Keystone proposal by the Department of Environmental Quality and the governor. That process was supposed to be completed this summer, but the president's announcement has presumably put any decision on a new application beyond this fall's election.

Governor not keen on additional education funding

On another subject, Heineman gave a cool reception to a University of Nebraska proposal for health-building projects in Lincoln, Omaha and Kearney. The University proposes getting $91 million for the projects from the state's cash reserve. But the governor doesn't want to dip into that pot.

"The members of the Appropriations Committee have been telling me for the past year, 'We need to rebuild the cash reserve.' I agree with them. We need to rebuild it for when that economic downturn comes in another few years, because we always have those in the cycle. That's when we need the money," Heineman said. "The University may have some very good projects, but the timing is not the best. And so I think it would be more fiscally prudent - let's get the cash reserve rebuilt before we move forward on any new construction projects," he declared.

The cash reserve is currently projected to contain about $414 million at the end of next fiscal year. That's about 11 percent of the tax revenue the state expects to take in. At the end of fiscal 2008 to 2009, the reserve peaked at about $578 million, or 17 percent of tax revenues for the year. But for more than twenty years, from 1983 through 2006, the reserve varied between about 1 percent to 8 percent of tax revenues at the end of the fiscal year.

On another money matter, the governor discounted arguments by education officials that the state ought to give schools the same amount of money they were projected to get when the Legislature adjourned last year. Because of higher agricultural land values and lower growth in school spending, the state aid formula now projects schools will get about $50 million less. Heineman said the state ought to stick with that amount.

"When that state aid formula shows that we need to make an adjustment upward between the first and second year of a budget, they expect us to fork over the money, and we've always done it," he said. "Now that the formula suggests that maybe they don't need quite as much, they think we ought to keep it at the same level. That's not fair."

Education officials maintain that if not for changes in the formula to adjust to the economic crunch of recent years, schools would be getting hundreds of millions more each year. Heineman says his top priority for the session remains his proposed tax cuts, which would total up to $327 million over the next three fiscal years.

Senior citizen abuse

In the Legislature on Thursday, senators heard Nebraska Supreme Court Chief Justice Mike Heavican deliver his annual State of the Judiciary address.

Following news reports of elderly people having their assets stolen by legal guardians and conservators, senators passed a new law last year requiring background checks and bonding. Heavican said Nebraska is now being recognized as a national leader in the area.

"None of us is naive (enough) to believe that elderly persons will no longer be subject to abuse. But the statutory changes made by this Legislature, which are being implemented by the judicial branch, will provide for better checks and balances," he said. "We appreciate the willingness of(the Legislature) to provide increased protection to the vulnerable elderly of our state."

The chief justice said the need for guardians and conservators for older Nebraskans is expected to increase dramatically in the next two decades, adding that while the state's total population is expected to grow 11 percent by 2030, the number of Nebraskans in their 70s is expected to grow by more than 80 percent during that same time.




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