Gov. Dave Heineman says University of Nebraska officials are changing their tune on funding for a $370 million cancer research and treatment center as it turns to the City of Omaha and Douglas County for money.
Heineman told The World-Herald that NU President J.B. Milliken, as he sought a $50 million commitment from the state, never indicated the university would seek additional local government funds for the project.
The governor on Thursday criticized Douglas County for committing $5 million in inheritance tax revenue for the University of Nebraska Medical Center project. And Heineman said Milliken should “explain what's going on” to the Omaha City Council as it considers a new cigarette tax to pump $35 million into the project.
“I support the project,” Heineman said, “but the president clearly indicated that if the state put in ($50 million) the rest would come from private contributions. Not a single conversation ever led me to believe that they would be asking the Omaha City Council or Douglas County Board or any other local government to contribute to this project.”
But university officials maintain that nothing has changed.
In addition to the $50 million pledged by the state earlier this year, the project will receive funding through $120 million in debt issued by the Nebraska Medical Center, UNMC's hospital arm. That leaves $200 million to come from fundraising.
Milliken, in a statement Thursday, said “We have always said that the remainder of the funds necessary would come from private or other sources.”
Milliken pointed to legislation stipulating that the state's funding is contingent upon $60 million in “private or other funds” being received for a cancer research tower, one aspect of UNMC's project.
But in numerous public statements about the project, the university said it would raise $200 million from private funds — with no mention of tapping other public sources.
When asked during an Appropriations Committee hearing about alternative sources of funding, Milliken said $200 million would come from “private fundraising.”
Coming up with the full $320 million to match the state funding, Milliken said, would be “a significant challenge but one that we're confident we can meet in raising that $200 million in private money.”
Don Leuenberger, UNMC's vice chancellor for business and finance, said he was aware of no restrictions that all of the $200 million had to come from private donors “or that other units of local government were off the table.”
“If federal grant money became available, of course, we would go after them,” Leuenberger said. “This is a very, very, large undertaking. There will be tremendous payoff when it is accomplished.”
Regarding the requests that Omaha and Douglas County provide funding, Leuenberger said, “This is their decision whether or not to grant this request and from what source, but obviously they thought it was worth listening to and of great value to their constitutents.”
Tuesday, the Douglas County Board became the first local government to commit public funds to the project. The board voted 6-1 to provide $500,000 a year for 10 years.
The City Council will consider a new occupation tax on cigarettes that would add about 35 cents to a $5 pack.
The proposal appears to have enough votes to pass — five council members have signed on in support. On Sept. 25, the council will hold public hearings on the proposed tax and a separate agreement with UNMC.
The governor said UNMC “is a fundraising juggernaut” when it comes to capital projects so he wonders why the university decided to seek out funding from Douglas County and Omaha.
Heineman said he is “very disappointed” by Douglas County's vote to provide funding. He said it solidifies his argument that the inheritance tax should be abolished.
Last spring, county governments across the state lobbied the Legislature to keep the inheritance tax, arguing that the money is needed to fund essential government services.
“They just lost their argument,” Heineman said. “They've just proved my point, if they can divert money to this project. This money is not going to fund any day-to-day operations of Douglas County.”
Regarding the proposed occupation tax on cigarettes, Heineman said he's heard from several Omahans who told him “they are not excited about another tax.”
Bob Bartee, UNMC's vice chancellor for external affairs, and Leuenberger said they were not ready to disclose how much in private donations have been pledged toward UNMC's project. However, they said, the fundraising remains on track, and donors are not hesitant to contribute.
“I think we are doing very well, but we're not prepared to give any numbers,” Leuenberger said. “This is an incredibly generous community.”
Said Bartee, “There was always an intent to make this a public-private partnership; $160 million in private money, I think that is a huge private undertaking.”
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