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On Friday, Feb. 27, the Nebraska Economic Forecasting Advisory Board met and revised its October revenue projections, adding another $175 million to the deficit.
This board has nine members tasked with developing a consensus projection of economic activity in Nebraska. They provide an advisory forecast of the state’s General Fund revenue receipts. The consensus General Fund revenue forecast is used to set the operating budget for the State. Senators entered this legislative session aiming to fix a $471 million budget deficit, based on October projections from the Board. With the Board’s latest determination, however, the state’s deficit without adjustments from the Legislature stands at a total of $646 million for the upcoming 2026-2027 fiscal year.
It is important to understand the Legislature creates a two-year, biennial budget in the odd-numbered years, and that budget must be balanced.
The spending approved must not exceed the amount of revenue projected to be available by the Board in their most recent meeting prior to the end of the session. This frequently results in a mid-biennium budget adjustment in the even-numbered years, like what the Unicameral is working on this year.
The Appropriations Committee did advance the two budget bills, LB1071 and LB1072, to the floor, and they were presented to the Legislature March 9.
Even if the Committee’s adjustments to the budget are approved, there will still be a projected deficit of $125 million, which will still need to be addressed on the floor. LB1071 and LB1072 were designated as Speaker Major Proposals so the Speaker can control amendments and allow time for debate on substantive changes. There will be tough debates on what programs should or should not receive funding. Debates may include whether there should be targeted cuts to specific programs or across-the-board cuts for several programs. The two budget bills must pass by March 25.
In floor debate, the Legislature gave first round approval to several bills. Two notable bills include LB1235 and LB985. LB1235 would address operational issues with the Nebraska Cannabis Commission by allowing the Commission to collect licensing fees of up to $50,000, creating a cash account to administer the medical cannabis program, and authorizing the fingerprinting of applicants for licenses. This bill is intended to help the Commission facilitate the implementation of medical cannabis.
LB985 would limit private guardians or conservators to serving no more than 20 individuals, the same cap that applies to those employed by the state. The legislation comes after a Nebraska woman serving as the court-appointed guardian for more than 30 people from across 16 Nebraska counties was arrested and charged last year with multiple felonies for allegedly stealing thousands of dollars from a vulnerable adult in her care. Finally, I was pleased to learn my bill LB795 was signed by the Governor. LB795, as introduced, proposed to designate Bromazolam as a controlled substance. During debate on Select File, Senator Storer amended her provisions of LB817 into the bill to align the weight-based penalties for fentanyl distribution and trafficking with those currently in state statute for other exceptionally hazardous drugs including, cocaine, heroin, and methamphetamine.
