LINCOLN — Gov. Dave Heineman declared Tuesday that he had nearly lost “trust and confidence” in University of Nebraska officials over how the proposed $370 million cancer and research center in Omaha will be funded.
Several hours after the governor made his remarks at a morning press conference, NU President J.B. Milliken said university officials were not always “clear or consistent” about how they planned to pay for the NU Medical Center project.
“Governor Heineman and I have had a close working relationship for years, and I have personally apologized to him for any misunderstanding,” Milliken said in a statement.
Heineman then issued a statement of his own, saying he accepted the apology and appreciated Milliken's acknowledgment of the university's miscommunication.
“It is now clear that the original proposal regarding the private fundraising was changed after the Legislature adjourned, and after I had signed the bill into law,” Heineman said.
While Heineman called the cancer center a worthy project, he said he was told during the legislative session it would be paid for with three sources: $50 million in state funds, $120 million in bonded debt and $200 million in private donations.
The university's requests for contributions from Douglas County and the City of Omaha angered Heineman, who said he would not have supported state funding if he knew NU officials planned to seek other public money.
Douglas County recently committed $5 million to the project, and the Omaha City Council is considering an occupation tax on cigarettes to raise $35 million.
When Milliken testified at a public hearing before the Legislature's Appropriations Committee last winter, he said the plan called for $200 million in private fundraising, Heineman said.
Milliken said Tuesday that the project was always intended to be a public-private partnership.
Only one part of the overall project — the $110 million cancer research tower — will be funded by the $50 million state appropriation. The law passed by the Legislature and signed by the governor requires the rest of the $60 million for the tower to be paid with private or other funds.
Even though they have the authority to use other funds, Milliken said Tuesday, only private donations would be used for the $60 million.
Raising the remaining $260 million for the center began after the legislative session “and some aspects developed over time,” Milliken said. Those aspects include funding requests to Omaha and Douglas County.
Heineman also accused three state senators of reaching a “secret agreement” with university officials on the plan to seek local government funding. He called out Sens. Heath Mello and Jeremy Nordquist, both of Omaha, and Abbie Cornett of Bellevue for failing to disclose the plan to him or their legislative colleagues.
“Why didn't it get raised on the floor of the Legislature?” Heineman said.
The senators on the receiving end of the governor's criticism fired back by saying Heineman, a Republican, was trying to frame the controversy as a partisan issue.
Mello and Nordquist are Democrats, while Cornett is a Republican in the officially nonpartisan Legislature.
Mello, a member of the Appropriations Committee, said he had “multiple” meetings and conversations with university officials in which they stated that other public funds would be sought.
The officials, he said, included the university's lobbyist, Ron Withem, as well as Harold Maurer, the UNMC chancellor, and Bob Bartee, vice chancellor of external relations at the med center.
“They said they needed to look at any option they could because it was going to be such a big project,” Mello said.
All three senators said the bill that authorized state spending on the cancer center was drafted in a way that made it clear private dollars and “other funds” could be used to match the state's contribution.
Heineman had initially opposed state funding for the cancer center, saying taxpayers preferred his tax cut proposal to helping a wealthy “special interest” group build a cancer center, Mello said. Heineman changed his position after it was clear that the Legislature and the Omaha business community backed the cancer center project.
“The reality is, he jumped in front of the parade late, trying to take credit for it, and he's still bitter about it because it got ahead of his tax package,” Mello said.
Cornett said she couldn't say what the governor did or didn't know, but she was told the university would seek other public funding. Officials mentioned the city as well as Douglas County.
“It was on every whiteboard I saw,” said Cornett, chairwoman of the Legislature's Revenue Committee. “There was no secret deal.”
NU officials didn't talk to her about using an occupation tax on cigarettes, probably because she's not a fan of occupation taxes, Cornett said. She called the taxes largely unregulated by the state and difficult to track for taxpayers.
Cornett said she was frustrated that Heineman was playing politics with the issue because she and Sen. John Nelson of Omaha, also a Republican, introduced the cancer center bill.
“We had two Republicans working their asses off to get it through, as did two Democrats. It's not a partisan issue,” said Cornett.
Nordquist, also on the Appropriations Committee, said university officials briefed him and said they intended to use a mix of donated and “other funds.” That's why the language was added to the final appropriations bill.
Although the briefings were conducted privately, they were not secret, Nordquist said.
“The secret deal accusation is pretty shameful,” he said.
Sen. Lavon Heidemann of Elk Creek, chairman of the Appropriations Committee, said he cannot recall university officials saying they intended to seek local government funds in any public or private briefings. But he acknowledged that the language of the law probably gives them that authority.
It's hard to say if the legislation would have received less support had the funding plan been more clear, Heidemann said.
“I think there would have been quite a bit of reservation,” he said.
Contact the writer: