Nebraska Legislature Approves $11B Two-Year Budget Amid Deficit Concerns

Nebraska lawmakers have passed an $11 billion two-year budget for fiscal years 2025-2027 that aims to close a projected $432 million deficit through a combination of revenue-generating bills, spending cuts, and transfers from the state's rainy day fund. The budget includes a 0.9% increase in state expenditures, salary increases for state judges, and maintains funding for key priorities such as education, property tax relief, and developmental disability services. While Governor Jim Pillen praised the budget as historically conservative and balanced, some lawmakers, including Sen. Wendy DeBoer, criticized it as artificially balanced due to reliance on cash fund sweeps and reserve fund transfers that may create future deficits. Appropriations Committee Chair Rob Clements expressed confidence that the budget puts Nebraska in good financial shape without cutting essential services, though he acknowledged the process was challenging. Nebraska Treasurer Tom Breezy also supported the plan, noting the state's overall strong fiscal condition despite using reserves, while critics pointed to unaffordable tax cuts and questioned the sustainability of the approach. The Legislature retains the ability to override any line-item vetoes by the governor, and the narrow budget surplus is expected to limit additional spending bills this session.