Amidst growing concerns over the allocation of state funds, a legal dispute has emerged over the transfer of $13.5 million from the Nebraska Environmental Trust to projects that some argue are not aligned with conservation goals. The lawsuit challenges the legitimacy of these fund transfers, raising questions about the interpretation of conservation-related mandates.
The funds in question include a $7.5 million transfer to the Water Resources Cash Fund and $6 million designated for a marina renovation at Lewis & Clark Lake. The legal challenge claims these allocations do not adhere to state statutes, which specify that Trust funds should be used for conservation purposes.
The marina project aims to enhance recreational facilities by adding boat ramps and improving public spaces at the lake. Meanwhile, the Water Resources Cash Fund supports initiatives like groundwater management and water conservation. Yet, the lawsuit questions whether these projects genuinely meet conservation criteria.
Brohman, a former director of the Trust, highlighted that similar projects have previously received funding. However, he emphasized that it is the court’s role to determine if the marina enhancements qualify as a conservation project. “Even though we have paid for bank stabilization and for deepening of lakes and dredging of lakes, it was strictly for habitat in those cases,” Brohman stated. “It was not for fishermen access or boat ramps or things like that. So they’ve definitely stretched it.”
Brohman also expressed concern over the allocation of funds for administrative purposes within the Department of Water Resources, which he believes contravenes statutory and constitutional guidelines. “It was not to go to administrative costs or agency costs,” he remarked.
Historical context shows a pattern of funds being redirected from the Trust, albeit in smaller amounts. Brohman noted, “Slowly, it’s been eroded over the years.” This trend is exemplified by a previous successful lawsuit by Oberg against the use of $1.8 million for ethanol gasoline blender pumps in 2020.
In 2025, a legislative decision saw the transfer of approximately $15 million from the Trust to soil and water projects. Oberg voiced concerns about the permanence of such reallocations, telling the Nebraska Examiner, “This will open up the spigots so [trust funds] can go to all kinds of different purposes.”
The will of voters
The Nebraska Environmental Trust was established in 1992 following voter approval of a state lottery. This legislation allocated nearly half of the lottery’s proceeds to the Trust. However, a constitutional amendment in 2004 reduced this allocation to 44.5%, while also supporting education and gambler’s assistance programs.
The lawsuit contends that reallocation of Trust funds might contravene the voters’ intent. Brohman highlighted this concern, explaining, “Some people say – people that play the lottery – people are willingly spending money on that, and they know that the money was going to the Nebraska Environmental Trust, and to education, and to the state fair, and to problem gambling. Well, now they don’t know where that money might be going to.”
Amendments to voter-approved measures have stirred controversy in Nebraska, with recent changes affecting issues like minimum wage and medical marijuana. While the legislature can amend such measures with a two-thirds majority, a new ballot initiative proposes requiring a four-fifths supermajority.
The decline in lottery sales, down by approximately 16% between 2024 and 2025, further complicates funding for these programs. Brohman attributed this decline to the rise of casino gambling and sports betting, noting, “They get it from the lottery, and they get it from the scratch tickets, and so those revenues will probably continue to go down.”
The Trust is also dispensing fewer grants due to stricter application requirements. “The board tightened up regulations, made it more difficult, and people stopped applying for grants,” Brohman explained, adding that applicants perceived the process as unfair.
