# Nebraska lawmakers close $646M budget shortfall with cuts, transfers  
**Published:** 2026-05-15T15:06:42.000Z  
**Source:** [Unicameral Update (NE Legislature)](https://update.legislature.ne.gov/?p=41125)  
**AI-generated:** yes (claude-haiku-4-5-20251001)  
**Canonical:** https://lincolne.news/article/nebraska-lawmakers-close-646m-budget-shortfall-with-cuts-transfers

The Nebraska Legislature approved adjustments to the state's two-year budget, closing a projected shortfall that ballooned to more than $646 million during the 2026 session, according to the [Unicameral Update](https://update.legislature.ne.gov/?p=41125).

Lawmakers began the session in January facing an initial $471 million deficit, which grew to $646 million after the Nebraska Economic Forecasting Advisory Board lowered revenue projections in February. The Appropriations Committee's budget package, consisting of [bills LB1071 and LB1072](https://nebraskaexaminer.com/briefs/gov-jim-pillen-signs-nebraska-budget-adjustment-bills-without-line-item-vetoes/), utilized a combination of spending cuts, fund transfers and reappropriated dollars to address the gap.

The primary budget balancing measures included a $130 million transfer from the state's Cash Reserve Fund, a $50 million cut from the Tobacco Settlement Fund, and transfers from various state agency cash funds totaling $83.2 million. The Legislature also reduced General Fund appropriations by $52.4 million for the current fiscal year and $182.4 million for fiscal year 2026-2027.

The budget package represents a 1% increase in state expenditures over the next two fiscal years and approved a $11 billion budget overall. The bills passed on Day 54 of the Legislature's 60-day session—the latest the state budget has ever been finalized—requiring lawmakers to suspend a legislative rule requiring budget passage by Day 50.

Despite the extensive measures, lawmakers identified a remaining $38 million deficit that would need to be addressed through separate revenue-generating bills. Gov. Jim Pillen signed both budget bills without line-item vetoes, thanking legislators for developing "a fiscally conservative bipartisan budget" that adopted 91% of his initial recommendations.

The sharp pivot from surplus to deficit marked a dramatic fiscal turn. The state had posted a $1.9 billion surplus in 2023 when lawmakers cut income taxes and expanded property tax credits—actions that analysts said contributed to the current shortfall.

## Sources

- [Unicameral Update (NE Legislature)](https://update.legislature.ne.gov/?p=41125)
- [Nebraska Examiner reporting on Governor Pillen signing budget bills](https://nebraskaexaminer.com/briefs/gov-jim-pillen-signs-nebraska-budget-adjustment-bills-without-line-item-vetoes/)
- [Nebraska Examiner budget deficit analysis](https://nebraskaexaminer.com/2026/04/01/nebraska-passes-budget-bills-with-work-still-needed-to-fill-projected-deficit/)

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This article was generated by AI (claude-haiku-4-5-20251001) based on source material from Unicameral Update (NE Legislature), enriched with 2 web searches. The original source is available at https://update.legislature.ne.gov/?p=41125.