# Judge blocks Nebraska Environmental Trust fund diversions pending lawsuit  
**Published:** 2026-06-29T23:17:32.000Z  
**Source:** [Nebraska Examiner](https://nebraskaexaminer.com/2026/06/29/district-judge-blocks-nebraska-environmental-trust-diversions-as-lawsuit-plays-out/)  
**AI-generated:** yes (claude-haiku-4-5-20251001)  
**Canonical:** https://lincolne.news/article/judge-blocks-nebraska-environmental-trust-fund-diversions-pending-lawsuit

LINCOLN, Neb. — [A Lancaster County district judge on Monday granted a temporary injunction blocking the transfer or spending of funds diverted from the Nebraska Environmental Trust](https://nebraskaexaminer.com/2026/06/29/district-judge-blocks-nebraska-environmental-trust-diversions-as-lawsuit-plays-out/), halting state action on millions in transfers while a lawsuit challenging the diversions plays out in court.

Judge Susan Strong issued the order in response to a suit filed by two former state officials who argue that $28.52 million in legislatively authorized transfers of lottery proceeds away from the Environmental Trust violate the Nebraska Constitution and have been used to close budget shortfalls rather than for environmental purposes as voters intended.

[The lawsuit was filed by W. Don Nelson, former chief of staff to then-Gov. Bob Kerrey, and Jon Oberg, a former director of the Nebraska Department of Administrative Services](https://nebraskaexaminer.com/2026/05/22/former-state-officials-sue-pillen-admin-over-alleged-misuse-of-nebraska-environmental-trust-funds/). They are represented by the American Civil Liberties Union of Nebraska and the Gutman Law Group.

Strong found that the plaintiffs had "a probability of success on the merits" and that the public had an interest in ensuring funds are "spent lawfully," according to court statements. The transfers blocked by the injunction come from [Legislative Bill 264](https://nebraskalegislature.gov/FloorDocs/109/PDF/Final/LB264.pdf), which authorized $15 million in diversions in 2024, and [LB 1072](https://nebraskalegislature.gov/FloorDocs/109/PDF/Final/LB1072.pdf), which authorized $13.52 million in diversions this year.

The Environmental Trust, [established in 1992 when Nebraska voters approved a state lottery](https://www.lotterycorner.com/ne), receives 44.5% of lottery proceeds for competitive grants that conserve and restore the state's natural environment. [The Trust typically distributes about $20 million annually in grants](https://nebraskaexaminer.com/2026/01/05/environmental-trust-lottery-funds-again-targeted-to-help-close-state-budget-gap/) to organizations like Ducks Unlimited, local recycling programs and state agencies.

State officials defending the transfers argue that the Legislature retained discretion to redirect funds even after voters approved a 2004 constitutional amendment guaranteeing the Trust's share of lottery proceeds. State Treasurer Joey Spellerberg, Department of Water, Energy and Environment Director Jesse Bradley and others named in the suit did not respond to requests for comment.

The injunction immediately blocks spending of funds already transferred, while two other sections authorizing transfers between July 1, 2026, and June 30, 2027, are frozen pending the case outcome. Strong noted that without the injunction, the state could transfer and spend the funds before the case concluded, making judicial review impossible.

This marks the second time Nelson and Oberg have sued to challenge Environmental Trust diversions. In 2020, their successful lawsuit blocked a $1.8 million transfer intended for ethanol blender pumps at gas stations.

## Sources

- [Nebraska Examiner](https://nebraskaexaminer.com/2026/06/29/district-judge-blocks-nebraska-environmental-trust-diversions-as-lawsuit-plays-out/)
- [Nebraska Examiner - Former state officials sue Pillen admin over alleged misuse of Nebraska Environmental Trust funds](https://nebraskaexaminer.com/2026/05/22/former-state-officials-sue-pillen-admin-over-alleged-misuse-of-nebraska-environmental-trust-funds/)

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This article was generated by AI (claude-haiku-4-5-20251001) based on source material from Nebraska Examiner, enriched with 3 web searches. The original source is available at https://nebraskaexaminer.com/2026/06/29/district-judge-blocks-nebraska-environmental-trust-diversions-as-lawsuit-plays-out/.