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Krusin' the Capitol

By Nebraska State Senator Lowen Kruse

Special Session 02
First Week
August 4, 2002

Hi

We are back at it. For those out of the Nebraska news loop, the governor has called us back into session to cut $125M in the current fiscal year (through June), $130M in the next fiscal year (03), and more than that in 04.

We and he have agreed to put off cuts in the next two years until January and to do as much cash flow adjustment this year as possible. Bottom line: after doing cash flow adjustments, he and we have agreed we need $88M in cuts in current budget.

This is grim. We have already cut most agencies to a budget level from one year ago. He has listed most of the rest for freezing at levels from one year ago. Since over 85% of current budgets are salaries, mostly under contract, there is not room to make this cut without turning off some lights. Hard to run a university that way. The university and state colleges are the main ones who are put in an impossible situation.

They can cut tenured faculty, under the emergency clause, but that of course has its own chaos. They would probably like an excuse to cut a few tenured, but that is not the way to go at it if you want to build a national reputation. Which we are.

For example, the new tech campus at UNO is going great guns. They are successful in recruiting students away from CalTech, Stanford, and MIT. By providing exceptional staff and equipment, this new enterprise is rated by some as the best high tech campus in the nation. We do not want to fool with that, no matter what the outcry is.

Another proposed cut is simply outrageous. The governor proposes cutting the entire medical intern program, to which the state gives only $3M. We would then send 200 doctors packing, out of state, and spend more than that to recruit the 100 net we expect from this group to come to Nebraska. Some have been committed to serve rural areas. Plus this invades a Medicaid formula to give assistance to hospitals which have a disproportionate share of Medicaid patients (which lowers income). Childrens Hospital, which serves 1/3 of the acute care children in the state, would lose $3M by itself in this move. They have just been downgraded in bond rating, for an increasing debt load, so we know they are not making a profit. They have our only highly-skilled childrens care in the state.

Plus, the interns provide the medical staff for our low income clinics, some pediatric care and a good amount of medicaid care. It would cost several million to replace them. Plus, counties are required by federal law to serve certain children. Their added costs, which goes on property taxes, would be well over $3M.

Well, enough of that, but you can see how very complex Medicaid and health care costs are, and how very expensive some of these cuts would be. Withholding care for developmentally disabled children is another that only shifts the costs to others, including to property taxes.

We and staff have worked long hours to find cuts that would actually cut, or at least that would not kill a critical program. Our service to the blind is essential. The proposed cut of $150,000 would remove over $750,000 of services to the blind, because of lost grants. Some blind grants are 1:10. We put up the 1.

We have found $11M that will not hurt the state, so we can cover the blind, the med interns and a few more small ones. The critical votes this week will be on the highway cash funds. They have over $300 million on hand, with of course many obligations. We will try for 15 of that, which will not delay any road projects. The argument for it is persuasive. If we are to prioritize our expenses, 10 miles of renewed paving is clearly not as important as health care. The public is peppering us with that message. However, we do not control roads budgets, and roads are a sacred cow in Nebraska. They would not miss the 15, but they worry a lot about what we might do next year if they allowed a little hole in the dike.

The governor appointed two new senators and they both appear to be serious minded souls. Great. We will need all the sober types we can find this week, if we are to prevent huge future increases in taxes.

This week I received an email from "A Taxpayer" -- the message was he pays taxes in order to provide necessary services and he would rather pay more taxes than not have necessary services. I think most people are there, but we will get through this session without increases.

Cheers,

Lowen

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