Nebraska budget bill fails as conservatives revolt over pulling private school vouchers

LINCOLN — Lawmakers headed temporarily back to the drawing board Thursday as proposed adjustments to Nebraska’s two-year budget failed to advance, the state’s first budget bill to stall since 2019.

Legislative Bill 1071, from Speaker John Arch of La Vista and led by State Sen. Rob Clements of Elmwood as Appropriations Committee chair, failed to a filibuster 19-10. It needed 33 votes to shut off debate after four hours, a procedural motion known as “cloture.” Budget bills have failed on cloture four times before, with none until this week receiving fewer than 30 votes.

The failure came after Clements on Wednesday unilaterally removed a new $3.5 million school vouchers program, largely to use state funding to offset some costs of attendance at private K-12 schools for students who started attending under voter-repealed school choice laws. The proposal had also included an additional $150,000 in administrative costs.

The “bridge” program came at the request of Nebraska Gov. Jim Pillen, originally at $7 million. He did not respond to a Wednesday request from the Examiner for comment on Clements’ decision to remove the funding.

‘Stop playing political games’

While not directly addressing the private school funding provision, Pillen on Thursday chastised the Legislature in a statement and said the Legislature has a job to do in funding state government and Nebraskans expect them to do it.

“My message right now is simple: It’s time for them to stop playing political games and pass a balanced budget,” Pillen said. “The people of our state deserve better.”

LB 1071 overcame a filibuster in the first round of debate with support from all 33 Republicans and two Democrats. This time, it had the support of six Democrats and 13 Republicans. Another 19 senators refused to vote for or against cloture.

Clements said he removed the voucher funding because at least four Republican senators had pledged to oppose the broader budget bill if it were left in, as would nearly all Democratic senators, thereby also jeopardizing cloture.

‘You need that stability’

State Sens. Christy Armendariz of Omaha and Rob Dover of Norfolk, Appropriations members who voted to include the $3.5 million alongside Clements, and two of the most vocal supporters of the funding, vowed to fight for the dollars to be restored and take the bill to cloture if it wasn’t. 

Had the debate ended before four hours, LB 1071 would have needed 25 votes to advance. It fell short of that mark, too.

Citing her background of growing up poor in northeast Omaha, Armendariz said school choice opportunities are important for students from low-income families who may get “kicked out” of public schools and need access to a quality education or who otherwise can’t afford it.

“Oftentimes, when you live in poverty, you need that stability, and I’m not willing to take that away,” Armendariz said.

‘You’re a hypocrite’

State Sen. Brad von Gillern of the Elkhorn area said he was disappointed the $3.5 million was removed from the budget and said he was amazed that school choice had become such a “lightning rod” debate in the Legislature.

Von Gillern expressed frustration toward opponents, calling it hypocritical to oppose the measure when many of the same senators argue the state isn’t doing enough to help the poor. 

“Shame on you,” von Gillern said. “If you make a pitch for poor people for any other reason, and you can’t support this, you’re a hypocrite.” 

State Sen. Ashlei Spivey of Omaha, an Appropriations Democrat, pushed back on von Gillern, saying it’s unfair when a majority of senators voted this year to allow more suspensions of pre-K-2 students. She said that’s a contributor to why Black people are disproportionately represented in Nebraska’s criminal justice system.

State Sen. Terrell McKinney of Omaha similarly said he’s been neutral on school choice proposals in recent years because he has issues with both public schools and private schools. He supported the first voucher law in 2023, funded via tax credits to the tune of $9.57 million.

The 2023 tax-credit-based law was replaced with a 2024 direct appropriation to sidestep a petition campaign to ask voters to repeal that law. Once the replacement law took effect, 57% of voters defeated what became a $10 million direct annual spending program.

McKinney said he found Thursday’s debate “annoying,” because he didn’t believe most of the speakers were being genuine about their true concerns. 

“When you stand up and say, ‘Don’t be hypocrites today,’ you should look yourself in the mirror,” said McKinney, who was also “present, not voting.” 

State Sen. Myron Dorn of Adams, the lone Republican on Appropriations to oppose the $3.5 million in vouchers, cautioned lawmakers about the consequences of not reaching an agreement on the budget by the end of the session. 

“I don’t know if you people understand the implications of all of this,” Dorn said. 

Since cloture was implemented in legislative rules in 1992, annual budget bills have failed five times — once in 1995, twice in 2018, once in 2019 and now once in 2026. In the prior cases, the bills came back and later passed.

‘Hill we’re willing to die on’

Dorn expressed frustration that lawmakers were spending most of the floor debate arguing over private funding, when the proposed budget adjustments cover a wide range of issues to discuss. He said if lawmakers remain at an impasse, they could find themselves in a special session by the end of June. 

“We haven’t solved it now. What makes you think we can solve it then?” Dorn asked. “What makes you think that this type of issue, that is driving this budget down, that we can solve it now if given another month?”

Dorn has lamented how the school funding came to Appropriations, with no associated bill, a method Dorn opposes. He said if lawmakers wanted funding, they could bring a bill next year.

State Sen. Danielle Conrad of Lincoln, who in her first eight years in the Legislature served on Appropriations, said this is why policy fights are left out of the budget. She is now in her 12th year of legislative service.

“The tension, the anxiety, the consternation, the chaos that is infused in this process because of that issue is exactly why we don’t inject policy into the budget,” Conrad said. 

State Sen. John Fredrickson of Omaha, a Democrat, said he didn’t think it was realistic to say anything is off the table as senators draw their lines in the sand. 

“I think we’ve all gotten into our little groups of … the hill we’re willing to die on, and what we’re really going to protect when it comes to the deficit,” Fredrickson said.

Child care subsidy

Some of the fight also discussed the Appropriations Committee’s decision to fold LB 304 from State Sen. Wendy DeBoer of Omaha into the budget. The policy would permanently extend income eligibility for the state’s child care subsidy program at 185% of the federal poverty level, rather than letting it fall to 130% this October.

For a family of four, the difference is eligibility at $61,050 in annual household income compared to a lower cap of $42,900, based on 2026 federal guidelines.

State Sen. Jared Storm of David City was among a few senators to say either the child care subsidy should be removed or the private school funding should be restored. He noted both programs affect poor children and that the fight wasn’t about public versus private schools but about poor children.

“I think that’s the only fair thing to do,” Storm said.

State Sen. Bob Hallstrom of Syracuse, a key Republican supporter of the child care bill, echoed Dorn that whether either or neither of the provisions were in the budget, senators should pass the budget.

Hallstrom described the suggestion to remove the subsidy language as a “quid pro quo.”

“I don’t know if that’s the way to run the railroad,” Hallstrom said, encouraging a look at the “bigger picture.” He said the fight over one or none “doesn’t seem to be befitting for our body.” In the end, he voted against ending debate.

What comes next?

Dover asked why the Appropriations Committee even took up the vote to put the private school funding in the budget.

He said he’s “not happy” with Clements removing the private school funding, but he understands that it’s within Clements’ right as chair. Dover added that if the chair has the power to override everything the committee does, it would effectively make the Appropriations Committee “impotent and ineffective.”

“If we have to, we could find another $3.5 million. I don’t think the chairman or anyone on Appropriations would disagree with me,” Dover said. “The only disagreement is perhaps where we would find that money.”

The Appropriations Committee’s proposed budget adjustments also include LB 1072, which handle transfers in and out of the state’s cash reserve fund and other cash fund transfers that Pillen’s team used to help fund the government. The bill advanced shortly after 8 p.m. Thursday.

Arch, speaking at the end of the day, said it had been “quite a day” and said he was “quite disappointed” with the outcome of the first budget bill. He described Clements as one of the “staunchest supporters of school choice, but his actions today to exclude that provision … was a display of true statemanship.”

“He put his duties in the budget before his personal beliefs on a single issue,” Arch said. “I want to thank him for that.”

Arch pointed to previous failed cloture motions on the budget and told Nebraskans the Legislature would pass a balanced budget this session. LB 1071 will return as early as Tuesday, a debate that could last up to two hours, Arch said.

“I expect we will come together and do our jobs,” Arch said.

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