Divided budget committee decides to seek overrides of Gov. Pillen’s vetoes

LINCOLN — A divided legislative committee voted Thursday to challenge Gov. Jim Pillen’s budget vetoes of rate increases for hospitals and nursing homes that provide Medicaid, a veto portrayed as threatening the state’s health care system.

The Legislature’s Appropriations Committee, on a 5-4 vote, decided to pursue a veto override of Pillen’s line-item veto of more than $45 million in increases for the provider rates.

Workforce housing

On similar split votes, the committee, which crafts a state budget after getting proposals from the governor, also decided to seek overrides of vetoes for $40 million for workforce housing projects in rural and urban Nebraska, pay raises for state legislative staff, and extra staffing for the State Auditor’s Office.

State Sens. Anna Wishart of Lincoln and Tony Vargas of Omaha pushed for overriding the veto of the provider rate hikes, arguing that hospitals and nursing home workers needed the increase.

Pillen’s budget had recommended a 3% increase for providers in the first year of the two-year budget, then no increase in the second year. The Appropriations Committee will pursue its plan for increases of 3% and 2% in those two years.

Pillen, in his veto message Wednesday night, said that hospitals had record profits before and during the pandemic and that increasing provider rates “will not address” the workforce shortages in the health care industry.

Overall, the first-year Republican governor said he wanted to prevent “excessive government spending” and preserve funds for his tax-cut proposals and increases in state aid to K-12 schools.

The Nebraska Hospital Association, meanwhile, argued that without the rate increases, some rural health care services will close.

The organization has said that more than half of the hospitals in the state operated at a loss last year. In addition, Nebraska has seen a raft of closures of nursing homes and assisted living facilities — since 2015, 79 facilities in all.

Vargas also argued for restoring $40 million for rural workforce housing and so-called “middle” housing in urban areas. The lack of housing, he said, is cited as a major reason the state has a critical shortage of workers.

‘Slap in the face’?

Much of the discussion within the Appropriations Committee on Thursday dealt with whether overriding the governor’s vetoes represented a “slap in the face” for Pillen.

First-year Sens. Rob Dover of Norfolk and Christy Armendariz expressed those concerns. Meanwhile, more veteran senators on the committee — Sens. Mike McDonnell of Omaha and Myron Dorn of Adams— contended that veto overrides are part of the process and that the Legislature should exercise its discretion when it comes to budget priorities.

The committee did reject other proposals to seek veto overrides for extra funding of court interpreters, public guardians and participation in a new federal match project with U.S. Rep. Adrian Smith involving the Maternal, Infant, and Early Childhood Home Visiting program. Armendariz said that the Pillen Administration was looking at using federal Temporary Assistance for Needy Families (TANF) funds instead of state money for the home visits.

Pay increases

The Appropriations Committee had sought funding for a 15% salary increases for state legislative workers in each of the next two years, maintaining that pay had fallen behind salaries paid in the private sector. Pillen argued that funds already existed to finance the increases.

In the end, the Appropriations Committee approved seeking an override that would deliver increases of 15% and 5% in the next two years.

In a floor speech Thursday, Albion Sen. Tom Briese, who chairs the Legislature’s Executive Board, said it appears the board has the existing funds identified by the governor for the increases, and will move ahead regardless of what happens with the veto override.

“I’m confident the 15% increase is intact over the next two years,” he said.

State Auditor Mike Foley, according to Bayard Sen. Steve Erdman, had sought funding increases because his current staff was inadequate to pursue all the audit requests he gets.

Erdman said additional funding for the Auditor’s Office would pay for itself through the reduction of government waste.

Speaker of the Legislature John Arch said Thursday that the veto overrides will be taken up on Wednesday.

Nebraska Examiner intern Zach Wendling contributed to this report.