With full-day floor debate now underway, the Nebraska Legislature is preparing to turn its attention to the state budget, with budget debate scheduled for March 10 through March 25. Because the budget must be passed by the 50th legislative day, lawmakers are working under a firm deadline to complete budget action by March 25. This year’s short session will be defined in large part by how senators respond to a worsening fiscal picture and a compressed budget timeline.
2026 Appropriations Committee Budget Report
The new budget proposal from the Appropriations Committee shows just how challenging that picture has become. According to the committee’s March 2026 report, the state is currently $125.6 million below the minimum reservefor the FY2025-26/FY2026-27 biennium under the committee recommendation. The report notes that while the February forecast modestly increased FY2025-26 revenues by $20 million, it also reduced the FY2026-27 forecast by $175 million, significantly worsening the state’s outlook and increasing pressure on lawmakers to close the gap.
The committee recommendation attempts to stabilize the budget through a combination of reduced appropriations, transfers from other funds into the General Fund, and an additional transfer from the Cash Reserve Fund. Specifically, the proposal includes $52.4 million in reduced General Fund appropriations in FY2025-26 and $182.4 million in FY2026-27, along with $38.6 million in transfers into the General Fund in FY2025-26 and $32.8 million in FY2026-27. It also increases the transfer from the Cash Reserve Fund to the General Fund by an additional $130 million in FY2026-27.
The Cash Reserve Fund, often described as the state’s rainy-day fund, is taking on a larger role in this year’s budget plan. The Appropriations Committee report shows that enacted law already included $152 million in transfers from the Cash Reserve Fund to the General Fund in FY2026-27. The committee recommendation adds another $130 million, bringing the total transfer to $282 million and leaving a projected unobligated Cash Reserve balance of $546.0 million at the end of the biennium.
How Nebraska’s budget works in a short session
Because Nebraska is in the second year of its biennial budget cycle, a short session budget is not a full rewrite of state spending. Most appropriations for the coming fiscal year are already in place. Instead, lawmakers use the short session to make targeted adjustments based on updated revenue forecasts, changing obligations, and current fiscal conditions. That usually means fewer decisions than in a long session, but this year’s decline in projected revenues means those decisions still carry significant weight. The Appropriations Committee report makes clear that this year’s budget work is about rebalancing the existing two-year budget rather than starting from scratch.
The report also shows where many of those adjustments are occurring. Some of the largest changes include reduced General Fund support for several agency and aid categories, changes to fund transfers, and targeted lapses of reappropriated funds. At the same time, key state obligations remain substantial, including aid to K-12 public schools, Medicaid, human services, and post-secondary education.
Protecting Nebraska’s Growth
For the Greater Omaha Chamber, the central question is not just whether the budget is balanced, but how it is balanced. Nebraska must address its short-term fiscal challenges without undermining long-term economic competitiveness. Businesses need stability, predictability, and confidence that the state is serious about growth. Undoing the tax modernization enacted in LB 873 would weaken Nebraska’s competitive position, make it harder to attract and retain talent, and reduce the growth the state will need to strengthen its fiscal position over time.
That is why the Chamber continues to view the budget through the lens of Omaha COMPETES and our broader agenda to create a more prosperous Nebraska. A competitive business climate, strong talent pipeline, and long-term economic growth strategy matter even more in a difficult budget year. As senators work through budget debate over the coming weeks, the Chamber will continue advocating for solutions that protect Nebraska’s economic competitiveness and position the state for sustained growth.
You’re Invited — Upcoming Events
If you’d like to hear more about these bills, and other legislation we are monitoring, our In the Legislative Loop series of Zoom briefing is Monday, March 9th 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.
With so much occurring across the various levels of government, now is the perfect time to connect directly with the decisionmakers shaping our state’s future. We invite you to attend our “Politics and Eggs” power breakfast on Monday, March 16th at 7:30 a.m. 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. You can register for “Politics and Eggs” through this link. NOTE: Registration closes on Monday, March 9.
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