League of Women Voters of Nebraska

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Epiphany Associates releases report on government spending in Nebraska

A 57-page “phase one” report by Epiphany Associates – which was covered by various media outlets in Nebraska on July 6 – targets $531 million in cuts to the state budget using a combination of transfers, federal funds and by “improving operations and effectiveness” (p. 28).

Commissioned by Governor Jim Pillen, the Utah-based organization is the same one where Steve Corsi – confirmed as CEO of the Nebraska Department of Health and Human Services by the state Legislature on March 25, 2024 – was an executive leadership coach consultant as recently as September 2023. Corsi’s involvement with the organization was one of the topics of a contentious legislative committee hearing in February 2023.

While the League of Women Voters of Nebraska encourages reading the full report – which outlines eight “key strategies” to achieve these cuts – we want to raise some specific concerns. 

Broadly, the review is based on a “systems perspective.” Although looking at government from a systems perspective may provide some insight (like mismatches or roadblocks in process points within a system), specific suggestions like eliminating jobs that are not filled after 90 days may be problematic in that some need to be filled by statute or by safety rules. Moreover, in a tight job market, attracting qualified employees to Nebraska may be a problem. 

We also wish to call your attention to potential cuts in these three areas: 

1. Child Welfare: $53.7 million in potential cuts

The report claims “between 2021 and 2023, the Nebraska child welfare program costs increased an inflation adjusted 6% ($53.7 million). Over this period, the average number of children served per month decreased by more than 4% and the average days it took to establish permanency for children increased by108 days” (p. 14).

The report does not mention that Nebraska terminated its disastrous five-year private contract with St. Francis Ministries in December 2021 to manage child welfare cases in the Omaha area. The contract was dramatically underbid, and the state needed to bring all these services back under DHHS. It’s hard to criticize indirect costs when you are trying to rebuild an entire division. The Epiphany Associates report does not mention these extraordinary issues.

2. Improve Federal Funds Utilization: $105.9 million in potential savings through accepting more Nebraska tax dollars managed by the federal government

To fully understand the state’s current fiscal picture, an almost decade-long refusal by successive governors to access Nebraska tax dollars that were managed by the federal government cannot be overlooked. Nebraska has left federal money on the table for at least a decade that could have been used to offset property taxes. 

3. Reduce buffer in state budgets: $150 million in savings primarily by reducing or eliminating “rainy day” funds, which cover unexpected costs.

The report identifies the core problem as “uncertainty about appropriate budget buffer levels or too much risk aversion” based on the state “under-forecast(ing) state revenue” (page 32). Perhaps it would be a better strategy to focus on honing a better forecasting measure rather than unilaterally removing the financial safety net for Nebraska’s health care, education, criminal justice, economic development and other systems that impact citizens’ daily lives. Avoiding financial risk seems like not only a reasonable, but required, way to steward Nebraskans’ hard earned tax dollars.

You can read about the Epiphany Associates report in the July 6, 2024, Nebraska Examiner at this link. The story includes a link to read the entire 57-page report. 

We encourage you to reach out to your state senator and the Governor’s Office (402-471-2244) to share your thoughts, questions or concerns. 

 

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