Nebraskans Sue to Protect Environmental Trust Funds

LINCOLN, Neb. – Two Nebraskans, both former government officials, are suing the state with the hope of halting the transfer of millions of dollars out of the Nebraska Environmental Trust, a fund that sponsors conservation-related efforts across the state.

The American Civil Liberties Union (ACLU) of Nebraska and Gutman Law Group are representing W. Don Nelson and Jon Oberg in their case against State Treasurer Joey Spellerberg and other state officials.

Nelson and Oberg’s lawsuit argues that recent appropriations violate the Nebraska Constitution and statute by directing over $13.5 million in transfers from the Trust to cover state expenses that otherwise would have been covered by the state’s General Fund. It states the transfers, some of which were directed to a state-managed recreation fund, run counter to the Nebraska Environmental Trust Act's clearly defined focus on conservation and its competitive grant process.

The litigation emphasizes a constitutional amendment that voters passed in 2004 guaranteeing a share of lottery proceeds for the Trust. The voter-approved amendment said the funds must be spent as provided in the Nebraska Environmental Trust Act, which outlines its purpose to “complement” - not replace - governmental and private efforts to conserve, enhance and restore natural environments. In recent years, the Trust has awarded about $20 million annually to local and regional organizations for that purpose. By statute, the Trust cannot provide direct assistance to regulatory programs.

The lawsuit argues that state lawmakers have unlawfully treated the Trust as “a piggy bank to cover other state expenses,” violating what voters approved. Today’s filing points to budget bills that directed millions of dollars from the Trust into other funds that then directed millions back into the state’s General Fund. The lawsuit cites media coverage in which one of the defendants, State Budget Administrator Neil Sullivan, said taking from the Trust contributes to “a balanced budget and additional property tax relief,” an admission that these dollars were being leveraged for purposes unrelated to conservation.

Nelson and Oberg are asking for temporary and permanent court orders halting specific transfers and a declaration that they are unlawful appropriations of public funds.

Nelson, who was involved in creation of the Trust in an advisory role, said:

“When we were figuring this out decades ago, we weren’t running around like squirrels in trees. We thought very carefully about Nebraska’s environmental needs and the proper role of a trust in conservation. We envisioned something enduring, a carefully stewarded resource that would benefit our grandkids’ grandkids. If we let the government drain money out of it every time the budget is short, this will be a trust in name only. I couldn't stand by and watch that happen without doing something.”

Oberg, formerly Nebraska’s top fiscal officer as director of the Department of Administrative Services, said:

“The sorry truth is that the state is playing a shell game to cover self-created budget gaps at the expense of the Trust’s constitutionally-mandated conservation efforts, which are much needed to combat dangerous wildfires and extreme drought as well as to provide ongoing protection of wildlife and natural habitats. Budget integrity requires both honesty and playing by the rules. Unfortunately, Nebraska is once again failing on both counts with this plan to circumvent the law. The bottom line is that the Trust is not a tool to solve our state’s budget problems. We are asking the judicial branch to check this overreach and enforce what voters decided decades ago.”

Alex Arkfeld, Gutman Law Group attorney, said:

“Neither the Nebraska Constitution nor the Nebraska Environmental Trust Act allow lottery proceeds to go to the General Fund, no matter how many other funds the proceeds pass through on their way there. We appreciate our clients’ vigilance and dedication to ensuring that Trust dollars go only toward fulfilling the Act’s statutory mission, as voters approved over 20 years ago.”

Carter Matt, ACLU of Nebraska staff attorney, said:

“This is a voting rights issue to us. Voters knew exactly what they approved when they guaranteed this conservation funding, and officials should have respected that vote and the clear text of both statute and the Nebraska Constitution. The Trust is for conservation purposes. Legally, its funds must complement efforts to conserve, enhance and restore Nebraska’s natural environments. We are working to make sure this is the last time that officials ransack the Trust to solve a budget problem.”

This lawsuit marks the second time Nelson and Oberg have sued to challenge misuse of Trust dollars. In 2020, the pair sued to challenge grant funding for ethanol blender pumps at gas stations, prompting the Trust’s board to reverse course.