News Release: Platte Institute Calls for Governor to Establish Federal Funds Inventory

NEWS RELEASE from the Platte Institute

Contact: Adam Weinberg
(402) 500-0209
aweinberg@platteinstitute.org

Transparency for Use of Federal Relief Funds in Nebraska
Platte Institute Calls on Governor to Release Data for Public Review

OMAHA, NE — Platte Institute CEO Jim Vokal and Director of Government Relations Nicole Fox have submitted a letter to Nebraska Governor Pete Ricketts calling on his administration to document and release information on the use of federal COVID-19 relief funds to be spent in the state through the end of the year, and for future federal grant funds allocated to Nebraska.

A copy of the letter is attached at the bottom of this release in PDF format.

Nebraska is eligible for $10.8 billion in total federal aid as a result of the pandemic and state of emergency. That amount is more than twice the size of the state’s current General Fund budget. However, the allocation of most of the emergency relief does not need to be authorized by the Nebraska Legislature.

The Ricketts administration has contracted with the professional services firm Deloitte to conduct an independent audit on the use of the federal funds. The Platte Institute’s letter calls for the executive branch to establish a federal funds inventory that would publish the findings of the audit for public review.

“As new governors and office holders are elected in our term-limited system, a federal funds inventory would promote proper stewardship of taxpayer dollars and help maintain Nebraska’s record of fiscal prudence,” the letter reads.

A federal funds inventory would document the use of federal funds and the maintenance of effort requirements for participation in each federal program associated with the funds.

Maintenance of effort requirements are the “strings attached” to the programs, which require states and local governments to supply their own revenues, in addition to federal funds they receive. State and local governments are often required to continue with these levels of funding for programs even if the federal government chooses to reduce its share of funding in the future.

If the state or local governments were to attempt to continue funding programs at higher levels based on the temporary influx of new federal funds, governments could be forced into tax increases in the future.

When states make errors in the use of federal funds, which may be identified by a separate federal audit, the state must return funds to Washington, creating additional costs for taxpayers and opportunity cost for other planned budget items.

“The Nebraska Legislature, the media, and the public deserve full access and scrutiny to an inventory of these federal funds, how they’re used by the state and local governments, and what strings are attached to their use by Washington,” said Platte Institute CEO Jim Vokal.

The letter notes that about 27 percent of Nebraska’s state spending came from federal funds even before the emergency. All U.S. states received significant amounts of federal funds prior to the pandemic, though their overall reliance on federal revenues may vary.

The Nebraska Legislature debated a bill to establish a federal funds inventory in 2018. A majority of state senators in all parties supported the legislation, sponsored by Appropriations Committee Chairman Sen. John Stinner. But the bill was held up in the second round of debate due to complaints that it would cost too much to implement and be duplicative of current processes run by the Nebraska Department of Administrative Services.

“Hiring an auditing firm is certainly not free, but their work is a worthwhile investment, especially with billions of dollars on the line. However, merely counting on an auditor to report back to the executive branch itself is not enough,” said Vokal.

To schedule an interview on this subject, please contact Adam Weinberg at (402) 500-0209 or aweinberg@platteinstitute.org.

The Platte Institute advances policies that remove barriers to growth and opportunity in Nebraska. More media resources are available at PlatteInstitute.org/Media.