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Environmental Trust warns against sweeping lottery funds; legal and constitutional questions raised
Summary
Nebraska Environmental Trust officials and conservation groups urged the Appropriations Committee not to redirect lottery-derived trust funds to state agency budgets, saying the trust is constrained by statute and the state constitution and flagging prior legislative amendments done in budget bills without a standalone bill and public hearing.
Carl Elmsoiser, executive director of the Nebraska Environmental Trust (NET), told the Appropriations Committee the NET board has taken a neutral position on related budget language but raised technical and constitutional concerns about proposals to redirect trust lottery proceeds to other state programs.
Elmsoiser said the NET is funded solely by lottery proceeds and pointed out there is "no provision in the Nebraska Environmental Trust Act to allow a direct transfer of funds to the water sustainability fund nor the Nebraska soil and water conservation fund." He cited Nebraska Constitution Article III, Section 24 and Nebraska Revised Statutes in the 80-11500s to say any transfer or redirection must comply with the Environmental Trust Act and the constitution. Elmsoiser recommended review of a 2007 Nebraska Attorney General opinion (No. 7003) concerning allocations of interest and the legal limits on moving trust money.
Several conservation and environmental stakeholders testified against using NET lottery proceeds to backfill state agency general‑fund spending. Kristin Hassebrooke of The Nature Conservancy urged the committee not to "fundamentally change the structure of the Nebraska Environmental Trust by redirecting 50% of its resources away from its voter‑enacted purposes," and described the trust as an additive, competitive grant program whose dollars leverage federal and philanthropic funding.
John Bender of Friends of the Nebraska Environmental Trust thanked the committee for preliminary budget language that did not include a straight transfer to Game and Parks and said the trust made competitive awards to Game and Parks this cycle. Audubon Great Plains and other conservation groups reiterated opposition to diverting annual lottery proceeds, saying a proposed $15 million cut over two years would jeopardize habitat, water quality and education projects across the state.
Elmsoiser provided financial context: awards in 2024 totaled about $20.45 million and NET had a balance and encumbrances that reflect multi‑year contracts; on Jan. 2025 the NET reported a cash balance near $74 million with about $61 million encumbered against contracts and statutory transfers. He added that prior floor amendments (in 2023 and 2024) had altered statutes by being attached to budget bills without standalone hearings and recommended thoughtful legislative consideration.
Ending: Conservation groups asked the committee to preserve lottery proceeds for competitive grantmaking under the NET Act; NET staff asked that any statutory changes be considered with attention to constitutional and statutory limits rather than via budget amendments.
