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LINCOLN — A pair of budget bills in the Nebraska Legislature officially moved toward floor debate, but lawmakers still must close a projected budget deficit that is larger than it appears.
The Appropriations Committee voted Wednesday to advance Legislative Bills 1071 and 1072 to the floor. The bills contain lawmakers’ proposed budget adjustments for the 2025-2027 biennium.
State lawmakers entered the session with a projected $471 million shortfall, which ballooned to roughly $646 million after new economic forecasts last week. The committee shrunk the projected deficit by more than $500 million through a collection of cuts, changes and cash transfers, including pulling $130 million out of the state’s rainy day fund and transferring over $11 million out of the Nebraska Environmental Trust.
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The committee’s approved adjustments leave a projected budget deficit of $125 million, which lawmakers will attempt to fill by March 25. But because of some math mistakes that have since been fixed, the shortfall stands at approximately $140 million, according to Legislative Fiscal Analyst Keisha Patent.
This is because of miscalculations regarding retroactive eligibility payments for Medicaid participants, which the committee corrected Wednesday. Last week, committee members approved about $15.1 million in savings based on these calculations, but fiscal analysts said those calculations included non-retroactive eligibility payments, which inflated the total savings.
The end result still saves the general fund just under $2 million. But that left the committee to propose adding $13.3 million in general fund spending to cover for the difference.
The change is expected to be incorporated into the budget through an amendment to be introduced during the second round of floor debate, following legislative procedures. This means Nebraska’s financial status will show a $125 million shortfall until the amendment is approved by the full Legislature.
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