Unicameral Update: One Job

The Legislature has just one constitutionally required job – pass a balanced budget.  That job just got exponentially more difficult on Friday when the Nebraska Economic Forecasting Advisory Board met and predicted that the state will be an additional $190 million in the red for our current fiscal year.  They also estimate that in fiscal year 2025-2026 revenue will be down by an additional $100 million, and fiscal year 2026-2027 it will drop $90 million more.  Following the meeting, Governor Pillen issued a statement saying, in part, “The foundations of Nebraska’s economy are stable and resilient because of our farmers, ranchers, businesses, and workers. . . . Today we have a great opportunity to be strong fiscal conservatives. I am looking forward to working with the Legislature to close the budget gap while delivering the property tax relief that Nebraskans expect and deserve.”

To make matters worse, the Appropriations Committee decided to advance their proposed budget before the Forecasting Board met and it left a deficit of over $120 million for senators to fill during budget deliberations. Now the question is how that budget shortfall will be addressed. There are bills making their way through the process that would cover the existing $120 million deficit but the Governor has stated that he intends to use some of the new revenue to fund additional property tax relief.  Sides are already being taken on whether we should tax or cut our way out of this.  My bet is a combination of both, and the real controversy will be over who becomes the winners and losers in the solution. 

Can we tax ourselves into prosperity? Are new taxes and fees just a tax shift? What can we cut that won't result in higher costs down the road? Will we have to pause the recent income tax reductions? How do we afford to provide additional property tax relief? Can senators answer all of these questions in the next five weeks? 

The next five weeks will not be fun.  In addition to the budget, there are 96 other priority bills left in the mix.  Out of those, 23 are still sitting in committee.  Senators have four days this week to debate non-budget or revenue bills.  As of next Tuesday, May 6, all attention will shift to the budget and revenue proposals.  There have been times in the past when the budget advanced through the process with minimal discussion.  This will not be one of those years.  It is never pretty when the Appropriations Committee advances a budget that has to be finished on the floor of the Legislature.  I anticipate this year will be even worse given the controversial use of cash fund transfers and potential impact on the state’s rainy day fund.

Justin and I will be spending our days and evenings at the Capitol for the foreseeable future.  As always, please feel free to email or text us if you have any questions.

Have a great week!

Korby M. Gilbertson
Radcliffe Gilbertson & Brady