A proposal to move $14 million out of the Nebraska Environmental Trust and into a cash fund managed by a state agency has raised red flags for a watchdog group and several state senators.
The Friends of the Nebraska Environmental Trust, a nonprofit group that formed in 2020 after several projects were passed over for funding by the agency’s board, called on the Legislature on Tuesday to reject the transfer after it was included in the Appropriation Committee’s budget.
The Legislature is scheduled to begin debate on the state's two-year budget on Wednesday.
It's Day 71 at your . The debate over a nearly $10B biennial budget will start today.
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Initially proposed by Gov. Jim Pillen, the transfer would move $7 million in each of the next two years to the Water Resources Cash Fund managed by the Nebraska Department of Natural Resources.
At an Appropriations Committee hearing earlier this year, Pillen’s state budget administrator, Lee Will, said unspent funds being held by the Nebraska Environmental Trust could help support the water cash fund, which is used for similar projects.
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But Sandy Scofield, a former state senator and president of the Friends of the Nebraska Environmental Trust, said the money managed by the trust “was not intended to pump up the budget of state agencies,†even if the overall objective was something she and others support.
Nebraska voters in 1990 approved a constitutional amendment directing nearly half of lottery proceeds into the trust fund to “conserve, enhance, and restore the natural environment of Nebraska†through grants to individuals and local organizations.
More than $400 million has been distributed to qualifying projects in all 93 counties of the state since the program’s inception roughly three decades ago, though in recent years, the number and dollar amount of grants awarded has decreased.
“We believe the trust has drifted away from its statutory mission and is failing to serve those very people it was intended to support,†Scofield said at a news conference in the Rotunda on Tuesday morning.
Lynn Roper, who served on the Nebraska Environmental Trust board for 10 years after it was created, said the proposal to transfer money out of fund was the latest in a series of controversies the organization has been involved with in recent years.
Over the last few years, critics have said the trust board has awarded grants to projects that were less qualified than others and declined to fund grants to projects it deemed ineligible, even if those projects had previously received funding.
Moving more of those funds into a state agency would do more to “cut out the little guys†who have sought grants to improve their communities, Roper said.
Roper likened the plan to stealing money set aside by Nebraska voters for a specific purpose, and said it would mean fewer grants to towns and villages seeking to expand recycling programs or to nonprofit organizations working to preserve wildlife habitats across the state.
“We question the legality of such transfers,†Roper said. “It definitely doesn’t conform to the intent.â€
Two state senators who stood with members of the Friends of the Environmental Trust say they also have concerns with the plan to transfer $14 million from the trust over the next biennium.
Lincoln Sen. George Dungan said he shares the concerns raised by Scofield and Roper about whether or not the transfer would be legal under state law.
“The way the law is written, I don’t think you can do that,†he said. “At least not the way they are trying to do it.â€
Dungan and Omaha Sen. John Cavanaugh also said the trust has passed over grants that qualify for funds and questioned if it was part of a broader politicization of the board. Members of the 14-person board are appointed by the governor.
Cavanaugh, who opposed the confirmation of several members on the floor of the Legislature, said he’ll sponsor an amendment removing the fund transfer from the budget, calling it a “subversion of the process†outlined in state statute.
While the Legislature can set the parameters for the types of projects that can be considered, or even direct the trust to give deference to certain projects — the Water Resource Cash Fund has been given priority in state statute — the direct transfer of trust funds to another entity is a “violation of the spirit†of the state constitution, Cavanaugh said.
“The problem is the voters passed a constitutional amendment for where these funds are supposed to go,†he said. “The Legislature is not empowered to change the constitution by a vote of this body. We cannot appropriate funds the constitution has appropriated.â€