Nebraska lawmakers will take on Pillen over vetoes of health care, housing funds

Committee members voted in favor of overriding the governor on three vetoed items but rejected proposed override motions for five others, including one that would have provided larger raises for legislative employees in the fiscal year ending June 30, 2025.

The recommended overrides included $15.2 million in increased Medicaid payment rates for hospitals, nursing homes, doctors and other health care providers during the second year of the upcoming budget period.

He said funding for higher reimbursement rates would not address any of the systemic workforce shortages affecting hospitals and “will only provide a Band-aid to hospitals’ bottom line, without providing any relief for health care costs paid by everyday Nebraskans.”

The committee also voted to restore $40 million to two programs that work to build housing for rural workers and middle-income families. The final recommendation would restore $1.1 million allocated so State Auditor Mike Foley could hire two additional staff and provide salary increases.

Pillen vetoed those and other items out of the state budget bills Wednesday. In a message to the Legislature, he said the state needed to "fight against excessive governmental spending" in order to provide tax cuts for Nebraskans. 

"I am writing to you to stand up to the special interests who stand to gain from growing government spending and deliver the money back to hard-working Nebraskans!" he wrote.

With or without the governor’s budget vetoes, and with passage of all bills at the second and third stages of consideration, the state is projected to remain in the black through June 30, 2025, the end of the two-year budget period. However, with or without the vetoes, projections suggest that it would slip into the red during the following two-year period.

Some members of the Appropriations Committee urged their colleagues to respect the governor's vetoes.

Sen. Robert Dover of Norfolk said he was looking at working with Pillen over the long-term and didn't want to cross him now. He argued that maintaining a continuing relationship was vital and that overriding a veto would be "a slap in the face."

Sen. Christy Armendariz of Omaha said she was concerned that it would be damaging to put the governor "in a corner." But she also expressed concern about the provider rate vetoes and said she had differences with Pillen about the health care industry.

Others argued that the Legislature has the responsibility to craft the budget and consider the needs of the state. 

Sen. Mike McDonnell of Omaha argued that it would not be giving Pillen enough credit to believe he would take a veto override as a slap in the face. He said overrides are part of the process. Sen. Myron Dorn of Adams said respect goes both ways.

"There's a responsibility for our committee to look at everything and not rubber-stamp what the governor wants," Dorn said.

Committee members voted against proposals to restore funding for expanding home visitation for young families, increasing funding for court interpreters and public guardians, and funding a full-time sign language interpreter for the Commission for the Deaf and Hard of Hearing. They also rejected a proposal to fund the second year of enhanced pay raises for legislative staff, opting to follow the governor's advice to use built-up savings for that year.  

In other budget cuts on Wednesday, Pillen eliminated funding for a pilot program to work with children suffering from post-traumatic stress disorder because of their exposure to gun violence. He explained the cut by saying that the state already has devoted more than $500 million to economic recovery projects, of which most were focused in North and South Omaha.

The governor eliminated money to expand home visitation for families of young children and to expand aid for court-appointed special advocates, who advocate for children in the foster care system. He also eliminated money aimed at helping a Cedars, a Lincoln child welfare provider, to offer housing for homeless youths who are pregnant or parenting.

Pillen also vetoed money for the Rural Workforce Housing and Middle Income Housing programs, which was to have come from the state’s cash reserve fund. He said the vetoes would protect the cash reserve and “avoid flooding the housing market with government subsidization.”

He cut $10 million earmarked to help Kimball with the infrastructure needed to handle an influx of workers replacing Minuteman missiles in the area and $7 million earmarked to help with a rural drinking water project in Cedar and Knox counties.

In the first instance, he said, he would help Kimball get money from the federal government for those costs. In the second case, he said, the state already had put significant money into the project.

The full Legislature is expected to consider the Appropriations Committee's override motions and other override attempts on Wednesday.