LINCOLN — Nebraska’s Appropriations Committee has rolled out its preliminary budget, marking an early but critical step toward passing a two-year financial plan. With a looming $432 million shortfall, lawmakers face tough decisions on spending cuts and revenue adjustments before the mid-May deadline.
Committee Budget Falls Short of Governor’s Targets
Led by State Sen. Rob Clements of Elmwood, the committee’s proposal chips away at the deficit but leaves a substantial gap. While Governor Jim Pillen’s recommendations from January 15 aimed to not only close the shortfall but add a $63 million cushion, the committee’s budget only addresses $171 million of the projected deficit. That leaves lawmakers scrambling to find another $262 million.
Clements acknowledged the difficulty ahead. “It’s going alright,” he said, but added, “It’s still going to be a challenge to get the budget balanced.”
Potential Impact on the University of Nebraska
One of the most contentious elements of the budget discussion is its impact on the University of Nebraska (NU). Governor Pillen’s proposed cuts to the university system have drawn pushback, with critics warning of long-term consequences. NU officials argue that reductions could lead to tuition hikes, faculty reductions, or program cuts.
State Sen. Machaela Cavanaugh of Omaha, a new member of the Appropriations Committee, has voiced concerns about using the budget process to enact substantial policy shifts. She characterized the document as a “moral” statement, warning that further cuts could harm vulnerable populations.
Lawmakers Weigh Revenue Increases vs. Spending Cuts
With a $262 million hole still to be filled, lawmakers have limited options:
- Spending reductions: Additional cuts to state agencies, programs, or services.
- Revenue generation: Tax increases or adjustments to state revenue streams.
- Federal funds: Exploring one-time funding sources or grants.
Republicans, who hold a majority in the Legislature, have historically resisted tax hikes. However, some lawmakers argue that a combination of spending cuts and revenue increases may be necessary to balance the books without deep service reductions.
Next Steps in the Budget Process
The committee’s proposal is just the starting point. Lawmakers will now debate amendments, hear testimony from stakeholders, and refine the budget before a final vote. With Nebraska’s economy facing uncertainties, the path to a balanced budget remains uncertain.
State senators will continue to wrestle with the tough choices ahead. As Clements put it, “We’re not there yet, but we’ll get there.”
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