Politics

Now a Budget Hawk, This Democratic Candidate Struggled to Balance the Books at Local Charity

Kara Eastman / YouTube Screenshot

Kara Eastman founded the Omaha Healthy Kids Alliance in 2007 to promote "healthy homes" for children, but when the nonprofit started to bleed hundreds of thousands of dollars each year on her watch, she nonetheless received steep raises from the organization. The year before she resigned, Eastman took home nearly $130,000.

Eastman is now running in a House district in Omaha, Neb., a fiscally conservative city that has recorded budget surpluses since 2013. The Democrat has made fiscal stewardship a centerpiece of her campaign, pitching herself as somebody who "knows how to balance a budget."

The financial records of the Healthy Kids Alliance tell a different story. The organization ran up a $2 million budget deficit from 2013 to 2016, though it did manage a $300,000 net gain in 2017, Eastman's final year at the helm. Eastman's compensation soared regardless of whether the charity ran deficits. In 2017, the year before she resigned, she made nearly $130,000 in compensation—$70,000 more than Nebraska's median income.

Eastman’s campaign defended the expenditures, as well as her salary. A campaign spokesman said Eastman's pay was set and approved by a board of directors and that she did not have input on those decisions. He added that deficit spending did not threaten the charity's overall fiscal health. While it continued to spend more money than it took in, Omaha Healthy Kids Alliance retained savings from large grants to keep it above water. The spokesman noted that some grants are "temporarily restricted," meaning that the nonprofit committed to spending money from grants in future years, even though the revenue would not be reflected in those tax filings.

"They were spending money they had earned in prior years that were multi-year grants," the spokesman said. "The organization clearly did not have financial difficulties."

Eastman ran for the same House seat against Republican incumbent Rep. Don Bacon (R., Neb.) in 2018, losing by just two points. Hoping for a better result in a rematch, she has racked up an endorsement from the far-left Justice Democrats and raised nearly $500,000 thus far. She is one of many progressive Democrats trying to replicate the success that launched the public career of Rep. Alexandria Ocasio-Cortez (D., N.Y.).

While Eastman supports progressive programs such as Medicare for All which would increase the country's debt by $32 trillion, according to some estimates, she has also painted herself as budget-conscious in the fiscally conservative district. When she appeared on a panel alongside three other Democratic primary candidates on Saturday, Eastman emphasized that balancing the federal budget is a "moral issue."

"We need people in Congress who actually understand how to balance the budget," she said, "people who understand how important it is to make sure that we are generating income for our country and making sure that we are not leaving a deficit behind for our kids."

Omaha Healthy Kids Alliance started out on strong footing in 2007, recording a net revenue of $427,000, according to tax filings. The organization's financial fortune soon soured, as it lost more than $300,000 between 2007 and 2008. The group's finances recovered between 2009 and 2012, buoyed in part by the $3.2 million the group received from a 2011 legal settlement between the Environmental Protection Agency and Union Pacific, a firm accused of lead contamination. As part of the settlement, the firm agreed to pay for the nonprofit's lead poisoning education program.

But when checks from the settlement stopped coming in, the nonprofit started losing roughly $500,000 on average each year from 2013 to 2016. In total, the nonprofit spent about $2 million more than it took in over that period. The candidate's nonprofit did record net revenue in 2017, but its financial prospects remain uncertain. The nonprofit ran a deficit again in 2018, losing $125,000, according to tax filings.

Despite the ups-and-downs of the nonprofit's finances, one thing remained constant during Eastman's 11-year tenure at the organization—large raises to her pay almost every year. In 2007, her organization paid her a modest $25,000. That amount went up every year until it reached $129,000 in 2017, increasing her salary by 500 percent in just 10 years. The Omaha Democrat received some of her largest raises during the last five years when her organization was losing hundreds of thousands of dollars.

Eastman has raised more money than all of her Democratic competitors combined, thanks in part to the national boost she has received from Justice Democrats. But her fundraising haul still lags behind her Republican opponent. Bacon has raised more than three times as much money as Eastman during the 2020 cycle, according to FEC records.

The Democratic primary is scheduled to take place on May 12.