The Legislature spent this week focused on the state budget, working through the difficult task of closing what has grown into a projected $646 million budget deficit. As of this week, lawmakers are making progress, but the path forward still depends on advancing a broader package of spending cuts, fund transfers, and revenue-related measures before March 25, the statutorily required 50th legislative day budget deadline.

That dynamic has defined the budget debate so far. LB1071, the main budget adjustment bill, and LB1072, the companion fund-transfer bill, both advanced from first-round general file debate to select file this week (LB1071 vote, LB1072 vote), reflecting continued progress as senators work to address the state’s budget challenge. Even so, the package does not yet fully resolve the reserve issue. Under the Appropriations Committee recommendation, Nebraska remains $125.6 million below the minimum reserve for the current biennium, suggesting that further adjustments will likely be needed as the Legislature continues its work. Lawmakers are expected to continue considering additional measures to fully close the gap before the March 25 budget deadline.

Because this is the second year of a biennial budget, lawmakers are not building a new two-year budget from scratch. Instead, they are reopening the budget already in place for FY2026-27 and making targeted adjustments in response to updated revenue projections. The February 2026 forecast reduced expected FY2026-27 revenue by $175 million, which has made this year’s budget debate less about wholesale restructuring and more about a careful mix of spending reductions, fund transfers, and reserve management.

So far, the approach reflected in LB1071 and LB1072 has been to make meaningful progress through a combination of General Fund reductions, lapses, transfers from other funds, and a larger Cash Reserve transfer. According to the Legislature’s budget report, the committee recommendation reduces General Fund appropriations by $52.4 million in FY2025-26 and $182.4 million in FY2026-27, lapses $36.3 million in reappropriated General Funds, increases transfers from other funds into the General Fund by $38.6 million in FY2025-26 and $32.8 million in FY2026-27, and increases the planned Cash Reserve Fund transfer by $130 million in FY2026-27.

As lawmakers continue this work, the Greater Omaha Chamber believes Nebraska must not balance its current budget at the expense of future economic growth. Short-term budget decisions should help put the state on sound financial footing, but they should not come at the cost of policies that support competitiveness, business confidence, and sustained economic expansion. That concern is especially important when it comes to LB754, the 2023 law that put Nebraska on a multi-year path to lower both individual and corporate income tax rates to make Nebraska more competitive with other states in our region.

For employers, investors, and growing businesses, that tax plan is not theoretical. It is already part of long-term planning. Altering that trajectory now would inject uncertainty into business decision-making, weaken Nebraska’s competitive position, and send the wrong message at exactly the wrong time. A durable fiscal solution should strengthen confidence in Nebraska’s economic future, not undercut it. That is why the Chamber continues to view this debate through the lens of Omaha COMPETES and our broader agenda to create a more prosperous Nebraska. A strong business climate, a predictable tax environment, and a long-term strategy for attracting jobs and talent matter every year. As the Legislature continues its budget work in the days ahead, the Chamber will remain engaged in support of solutions that meet the state’s fiscal obligations while also protecting Nebraska’s long-term growth and competitiveness.

You’re Invited – Upcoming Public Policy Events 

If you’d like to hear more about these bills, and other legislation we are monitoring, our next In the Legislative Loop series of Zoom briefings is Monday, March 23rd at 11:30 a.m. This members-only, biweekly Zoom call provides a 30-minute update on the latest developments from the State Capitol. It will include behind-the-scenes insights from the session as well as a look ahead at key issues coming before the Legislature. You can sign up for the biweekly series here.

Additionally, while registration has now closed, a quick reminder about our upcoming Politics and Eggs power breakfast on Monday, March 16^th at 7:30 at the Omaha Marriott Regency. Enjoy breakfast while connecting with local, state, and federal elected officials who shape the policies that impact your business and community. This is your chance to hear firsthand from our elected officials about everything happening in the metro, the region, and the state – directly from them in our unique “on the stump” format. If you missed this one, keep a look out for the next Politics and Eggs breakfast early summer.  

While your Greater Omaha Chamber Public Policy team continues its work at the State Capitol advocating for a stronger business climate and advancing the Omaha COMPETES agenda, we encourage you to share your insights on state legislative priorities at advocacy@omahachamber.org.

Jennifer Creager
Senior Vice President, Public Policy
808 Conagra Dr., Ste. 400, Omaha, NE 68102
Lincoln Office: 402-474-4960

For more information, visit our Public Policy page or contact Jennifer Creager at 402.474.4960. 

You can read the Legislature’s Update to learn more about the happenings in Lincoln.