Environmental Trust official assures grants will be awarded, despite pause

LINCOLN — The Nebraska Environmental Trust took no action Thursday on a request to lift a pause on lottery grant awards for conservation and wildlife groups amid worries that Gov. Jim Pillen’s plan to sweep $40 million from the agency would “kill” the operation.

The Trust annually grants about $20 million in State Lottery proceeds for environmental projects, but Pillen, seeking to solve a $471 budget shortfall, wants to sweep away Trust funds to fill budget holes.

Shelly Kelly, executive director of the Sandhills Task Force, which gets Trust grants to help conserve and enhance grasslands and wetlands in the Sandhills, told the Trust’s board Thursday that she was “confused” by a recent pause in the process of handing out already-approved grants, given that it appears the Trust currently has plenty of funds.

“The funding does exist,” Kelly said, who added later, “this feels like a political football.”

Mark Quandahl, a former state senator who serves as chairman of the 14-member Trust Board, said after the meeting that “(the money) is coming.”

“We just have to make sure our T’s are crossed and our I’s are dotted (first),” Quandahl said.

Uncertainty leads to ‘pause’

Last week, the Sandhills group and others who had been approved for grants in 2026 received a letter stating that the Trust was “temporarily pausing” the distribution of grant funds due to the “uncertainty,” given the governor’s proposal, over whether the Trust had enough to cover the $18 million in awards.

Quandahl, during the meeting, said that he had ordered the pause to give Trust officials more time to explore the funding issue. In that effort, he said that he and Executive Director Holly Adams had met once already with the governor’s budget officials, and will meet again soon.

“I wanted to make sure we had enough cash before those (grants) went out,” Quandahl said, explaining the pause.

He said he is waiting for a legal opinion from the Nebraska Attorney General’s Office on one question. Quandahl said he wants to ensure that the Trust would not be liable to pay multi-year grants if the Trust lacked the money to pay them, presumably if all their funds were taken for state budget priorities.

Pillen has proposed to transfer $40.7 million from the Trust over two years to help close the budget shortfall  and deliver more property tax relief from the state.

The transfer has drawn howls of protest from advocates of the Trust, who argue that it’s improper, and maybe illegal, to use the Trust’s state lottery proceeds to solve a state budget problem. Advocates say the Trust was intended to help preserve and enhance the state’s environment, not to finance daily operations of agencies like the Department of Health and Human Services and the State Patrol, which are historically funded via tax dollars.

When Quandahl was asked if the governor’s proposal was proper, and whether it could “kill” the Trust eventually by sucking away all of its funds, he responded that such questions were a “policy decision” outside his authority. The Trust is part of the state government, he said, and part of the state budget process.

“The (Nebraska) Legislature is the proper place for policy decisions,” Quandahl said.

Does the Trust have enough money to help solve the state’s budget problems and fulfill the $18 million grant awards it approved last month?

According to one Trust Board member, Jesse Bradley, the head of the Nebraska Department of Water, Energy and the Environment, that answer is yes.

During Thursday’s meeting, Bradley passed out figures he had compiled that indicated that if the Trust spent $20 million a year, and the governor’s budget took $40.7 million over the next two years as proposed, it would have nearly $30 million left at the end of the ‘25-26 fiscal year and almost $23 million at the end of ‘26-27.

Traci Bruckner of Audubon Great Plains said that Trust funds were intended to be awarded through competitive grants to organizations across the state, not focused on one lake project in northeast Nebraska.

Kelly, of the Sandhills Task Force, added that “recreation” was never an intended purpose of Trust funds, and that Trust money shouldn’t go to building more slips to park boats at Lewis & Clark Lake.

“I’m worried about the future of the Trust. It has provided so many good things,” she said. “This will kill the Trust.”

Trust members discussed the governor’s budget bill, but decided to take a “neutral” stance on the $40.7 million transfer from the Trust.

The Trust Board took no stance on a proposed constitutional amendment before the Legislature, one that advocates of the Environmental Trust say will better protect it from raids for the state budget.

The proposal, introduced at the request of Friends of the Environmental Trust, would let voters decide if the State Constitution should declare that Trust funds can only be used for “conservation, enhancement or restoration of the natural and biological environment in Nebraska.”

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