Nebraska Legislature sidesteps filibuster on cuts to HHS, Legislative Council

State Sen. Rob Clements of Elmwood, right, talks with Speaker John Arch of La Vista. July 26, 2024. (Zach Wendling/Nebraska Examiner)

LINCOLN — A day after state lawmakers pared down Gov. Jim Pillen’s latest property tax relief proposal, a small group of senators tried to punish him for stepping into budget discussions.

State Sen. Machaela Cavanaugh of Omaha and State Sen. Danielle Conrad of Lincoln hammered a special session budget bill for including more than $28 million in Pillen-suggested cuts to various state agencies and the Legislature. The overall bill trims about $117 million.

Several other senators joined them in stalling Legislative Bill 2 over the course of the day, trying to restore $25 million to the Nebraska Department of Health and Human Services and $3.5 million to the Legislative Council.

Protecting legislative autonomy

Conrad argued that the Legislature should protect its authority to set spending rates in a stable, predictable budgeting process that takes place during the regular legislative session and not let the administration dictate adjustments midstream.

Cavanaugh and others said lawmakers should not approve budget cuts to such a major state agency when HHS leaders and the governor wouldn’t explain what the cuts would affect.

“My issue is not the cuts themselves,” Cavanaugh said. “I just want to know what they are. It’s the process that this was not transparent and it was not done with our own … processes.”

State Sen. Anna Wishart of Lincoln said she needed to know more about the cuts to be able to make mid-year adjustments. She backed a failed effort by State Sen. George Dungan’s failed effort to amend LB 2 by restoring the HHS funding.

Filibuster fatigue

Many in the Legislature’s conservative majority became perturbed on the second straight long day of debate and swatted down two amendments that would have restored some of the funds to ease passage.

State Sen. Rob Clements of Elmwood defended the willingness of the Appropriations Committee he chairs to work with Pillen’s budget officials and agencies to cut unspent funds and fees.

“We reviewed 22 state agencies with millions of dollars in unspent funds,” Clements said. “The key was not taking away 100 percent of the unused dollars of each agency.”

During the meandering debate, lawmakers on the left and right complained about wanting to do more about high property taxes than simply pulling forward income tax credits for property taxes paid (or paying people the credit up front) and capping local spending.

That was the measure senators passed Tuesday as Legislative Bill 34. Originally a bill offered by north-central Nebraska State Sen. Tom Brewer, the bill that was replaced by the Revenue Committee’s fallback position.

The Revenue Committee chairwoman, State Sen. Lou Ann Linehan of Omaha, said she and others who support LB 2 and its companion funding bill, LB 3, to help fund LB 34 wouldn’t budge.

“I’ll stay here as long as it takes,” Linehan said.

Wanting more from relief package

State Sen. Justin Wayne of Omaha and State Sen. Steve Erdman of Bayard said they were willing to stay and talk and do more during the special session – which will hit its 13th day on Thursday — if lawmakers were willing to have serious discussions about resolving the property tax situation.

Erdman said he keeps trying to suggest potential structural property tax relief, pointing to his EPIC Option Consumption Tax proposal as something lawmakers could have considered.

“What we’ve done this special session will be a decrease in your increase,” Erdman said. “That’s exactly what this bill will do and what this special session will accomplish.”

Wayne suggested lawmakers consider Legislative Resolution 2CA, a constitutional amendment proposed by State Sen. Tom Brandt of Plymouth that would give senators more flexibility in handling valuations of owner-occupied residential properties.

LR 2CA would let lawmakers value residential properties differently depending on whether they were owner-occupied. The measure would have to be considered by voters at the ballot box. Wayne said if voters approved it, lawmakers could tax those residential properties at a lower percentage, like agricultural land.

Brandt said he modeled his proposed amendment off how Nebraska values ag land at 75% of market value. He said having the flexibility to do that for residential properties would help.

”What this says is somebody who owns the property has the opportunity to be treated differently by the Legislature,” Brandt said.

Wayne and Linehan called out colleagues who filibustered broader efforts to reform property taxes but then voted for what remained. Wayne said lawmakers were “settling” and doing “the bare minimum.”

“Senator Erdman is right,” Wayne said. “The solution is you’ve got to change everything. We’ve got time and opportunity right now to fix it.”

Committee cut less than governor proposed

Erdman, who often calls for the vote to end filibusters he disagrees with, said he disagreed with senators on Wednesday who were simply trying to take “a pound of flesh.”

He said the Appropriations Committee took its work seriously and proposed cutting unspent funds from agencies. He said the committee worked to ensure the plan would not take money that might be needed.

The committee bill proposed cutting less than the governor and his staffers and agency directors recommended, Clements said. He said they did so “to keep from cutting agencies too close to the bone.”

Christy Armendariz of Omaha defended the committee’s process. The committee member said lawmakers needed to take emotion out of their arguments and look at the numbers.

“I think it’s fair for a new governor to come in and say this is the way we will budget moving forward,” Armendariz said.

Senators wanted more info

State Sen. Tony Vargas of Omaha, who sits on the Appropriations Committee, said that he did not believe the HHS cuts were transparent and that lawmakers needed more specifics about what was being cut than just being told HHS found “efficiencies.”

Conrad called the suggested cuts “truly unnecessary and primarily performative.” Both she and Cavanaugh criticized the value of the consultant Pillen hired to help find trims, called Epiphany.

“There’s absolutely no reason to move forward with the measures in LB 2 or 3,” Conrad said, arguing that the Legislature should consider them during the regular 2025 session.

Bill moving forward

Speaker John Arch tried multiple times to move debate along, urging calm during the dog days of a special session some lawmakers resented because of when it was called and why.

“We have been following a process,” he said. “At the conclusion of that … the body can decide to stay in session and consider other bills.”

Once it became clear that LB 2 would have enough votes for passage, Cavanaugh criticized colleagues for not thinking for themselves.

The cloture vote was 34-10. The bill advanced to the second round of voting 33-11.

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