This past Friday marked the 60^th and final day of the 109^th Legislature. Generally, Day 60 is reserved for ceremonial activities that include an address by the Governor and the Speaker, plus farewell comments from the departing Senators in the second year of the biennium. However, the Governor decided to veto five bills, so bill sponsors had to consider whether to file a motion to override. Ultimately, override motions were filed for four of the five bills, but the Legislature voted to uphold the vetoes on all four bills.

Some criticized upholding the vetoes given that all of the bills made it through three rounds of debate and in some cases passed on Final Reading unanimously. One bill even appeared on the consent calendar. However, it’s worth nothing that, for most bills, the bulk of debate takes place in committee and during General File debate unless there are amendments filed on Select File. Final Reading tends to only draw significant debate if the bill was already controversial.

This year, the Legislature ultimately agreed with the concerns raised by the Governor in his veto letters for each of the bills. For some, there were suggestions that only portions of the bill were problematic, so I would expect they will be resurrected in a modified form next year. And for the maternity/paternity leave bill, the Governor said his administration would make an administrative change to enact some of the provisions in the bill.

We will be losing 13 Senators after this year, including Speaker John Arch and Appropriations Committee Chair Rob Clements. We are losing most of the Senators to term limits, although a couple have decided not to seek re-election. I remain convinced that allowing Senators to serve three four-year terms, instead of just two, would bring more stability to the Legislature. Not only would it allow us to keep more seasoned leaders, but it would also promote more institutional knowledge among both staff and Senators.

I certainly started the session with some trepidation and skepticism about how productive it would be. However, in the end, I was satisfied with our ability to take a $631 million projected deficit and reduce it to a $6 million projected surplus while keeping our income tax decreases in place and maintaining the funding for the Perkins County Canal and the new state prison. We were also able to increase the property tax credit to a total of $1.6 billion per year. This was possible by reducing cash funds and making structural changes in state spending. Going forward, state spending is projected to increase by 2.5% per year, but we will need to continue to pursue greater savings if revenues fail to grow at a faster pace in order to balance the budget.

Like in business, the state budget is an estimate of spending based on estimated revenue. The Legislature relies on the most recent revenue estimates from the Nebraska Economic Forecasting Board available at the time. The Department of Revenue then reports the actual revenue receipts each month and compares them to the forecasting estimate. For March, state revenues were $78 million under the forecast; when paired with the $6 million surplus in the budget, we are currently operating with a $72 million “deficit.” However, keep in mind that the revenues are actual revenues as opposed to accruals.

The amount of receipts and tax renewals often fluctuates month-to-month, particularly this time of year when individuals are filing their taxes, and payments and refunds may not be processed at the same time. With that said, if the timing of expenditures is different than forecasts, the net revenues will fall behind. This year, most taxpayers are filing their income tax returns earlier because they are getting refunds. If you are not getting a refund, but instead paying tax, you will likely not file until April. As a result, refunds in the month of March are likely higher than forecast due to early filing, and tax revenues are lower because they are not coming in until the month of April. If so, the revenue shortfall will likely change positively in the next month or two. We will know more as the year goes on, just as we did in 2025. Either way, we will begin a new biennium budget process when we reconvene in 2027.

It is a privilege to represent you in the Nebraska Legislature. I look forward to hearing from you regarding issues that are important to you as we begin the interim. Please continue to reach out at 402-471-2729 or by emailing me at mjacobson@leg.ne.gov.