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Legislators

Nebraska Passes $11 Billion Budget for 2025-27, Leaving $1.1 Million for Future Budget Adjustments

Strategic Insights

— 2 min read

Lawmakers in Nebraska have approved an $11 billion budget for the state's fiscal years between 2025 and 2027, with $1.1 million in wiggle room for future budget adjustments. The budget, which was passed on May 12, 2025, includes $1.5 million in spending for state judges' salary increases, but critics argue that it is not actually balanced and is based on "sleight of hands" to make it appear so. Despite criticism, the budget passed with a vote of 37-11 for one of the main budget bills and 35-13 for another.

Key Takeaways:

  • The budget for 2025-27 is $11 billion, with $1.1 million in wiggle room for future budget adjustments.
  • The budget includes $1.5 million in spending for state judges' salary increases.
  • Critics argue that the budget is not actually balanced and is based on "sleight of hands" to make it appear so.
  • Lawmakers approved the budget bills without making any last-minute changes, despite criticizing the bills for more than two hours.
  • The budget now heads to Gov. Jim Pillen, who can line-item veto any items.
  • Overrides require at least 30 votes.
  • State Sen. Machaela Cavanaugh of Omaha predicted that the bills won't stop the deficit and that a special session will be needed.
  • State Sen. Wendy DeBoer of Omaha compared the budget bills to the fairy tale "The Emperor's New Clothes," where the ruler is naked but his subjects pretend he has extravagant clothing.
  • DeBoer and Cavanaugh argued that the budget bills were littered with mistakes and unconstitutional provisions that were largely strewn together with sweeps of various cash funds in a budget that offered a two-year average spending growth of 0.9%.
  • At least $24 million of the budget gap is expected to be filled by seizing unspent agency funds after June 30, the end of the fiscal year.

Statistics:

  • Fiscal year 2024-25: $4.56 billion in net receipts, $5.48 billion in expenses.
  • Fiscal year 2025-26: $5.36 billion in net receipts, $5.48 billion in expenses.
  • Fiscal year 2026-27: $5.42 billion in net receipts, $5.52 billion in expenses.
  • Net receipts for the 2025-26 and 2026-27 fiscal years include $57.6 million in interest, $216 million in cash fund transfers, and $147 million from the state's "rainy day" cash reserve fund.

Sources:

  • Nebraska Examiner, "Nebraska's 11 billion budget for 2025-27 advances to final round with 1.1 million to spare"
  • Nebraska Legislature, "LB 513"
  • Nebraska Examiner, "Former state official threatens lawsuit to stop Environmental Trust Fund transfer"
  • Nebraska Examiner, "Nebraska worries raised about funding for rural broadband expansion"

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