Nebraska lawmakers have advanced five key bills to the floor that form the foundation of the state’s next two-year budget, while leaving a one hundred twenty-four million dollar deficit for the full Legislature to address. After weeks of negotiation, the Appropriations Committee approved a ten point eight billion dollar spending proposal covering the biennium beginning July first, twenty twenty-five, through June thirtieth, twenty twenty-seven. Speaker of the Legislature John Arch announced that floor debate on the budget will begin on May sixth.
The committee initially faced a two hundred eighty-nine million dollar deficit, but closed that gap significantly through a mix of increased cash fund transfers, reductions to earlier spending proposals totaling approximately one hundred twenty-three million dollars, and cost savings from a recently passed Medicaid bill. If two key revenue bills—Legislative Bills six hundred forty-five and six hundred fifty—are passed, fiscal analysts estimate the remaining shortfall would be erased and the state would even have around seven million dollars in reserve.
However, lawmakers are anticipating revised revenue projections from Nebraska’s Economic Forecasting Advisory Board, which could increase the projected deficit and force additional spending cuts or revenue measures. Committee Chair Robert Clements, a senator from Elmwood, attributed much of the gap to recent reductions in Nebraska’s Federal Medical Assistance Percentage, or FMAP, which slashed state Medicaid revenue by nearly two hundred ninety million dollars over three years. Senator Machaela Cavanaugh of Omaha, the lone “no” vote on the mainline budget bill, disagreed, calling the shortfall a “manufactured deficit” resulting from past legislative decisions on tax cuts and costly projects. She argued, “We don’t have a deficit. We have a choice.”
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