$140 million

The Legislature rejected an amendment on Select File yesterday that would have narrowed a $140 million shortfall down to about $37 million, after failing to get the 33 votes needed for cloture. AM 2748 to LB 1071 would have cut an additional $4.5 million in FY 2026 and $3.9 million in FY 2027. The amendment also would have increased cash fund appropriations by $13.2 million over the biennium and increased federal fund appropriations by $8.7 million. 

The impasse in the Legislature largely centered around a $3.65 million appropriation included in the Appropriations Committee’s budget and debated on General File. The funds have been earmarked for the Department of Labor to administer a private school scholarship program, including administrative costs for the program. An amendment to strip the funds from the budget narrowly failed on General File, and Appropriations Chairman Robert Clements removed it prior to Select File in an effort to gain enough votes to keep the budget moving forward. As OpenSky reported last week, scholarship programs in other states have overwhelmed state budgets with negative impact on student achievement. 

LB 1072, the other half of the mid-biennium budget adjustments that dealt with cash fund and cash reserve transfers, also required a cloture vote late in the evening, which was successful. There are additional bills moving through in tandem that would help close the budget gap with various revenue raisers. 

The Legislature will likely need to suspend the rules that require the budget to be delivered to the Governor’s desk by day 50 of the legislative session. Speaker John Arch indicated that the budget will be scheduled again on Monday. 

$166 billion

The United States Customs and Border Protection (CBP) is working on a mechanism for refunding $166 billion in tariffs collected, plus interest, after the Supreme Court ruled that the President did not have the authority to impose tariffs under the International Emergency Economic Powers Act. According to the Tax Policy Center, more than 330,000 importers paid the tariffs on 53 million shipments prior to the ruling. CBP indicated that they are between 40-80% done with creating a system for importers to apply for refunds. 

A study from the Federal Reserve Bank of New York indicated that 90% of the tariffs were passed along directly to consumers who purchased imported goods. Senator Martin Heinrich (D-NM) has introduced a measure to provide direct relief to American consumers impacted by these tariffs, dubbed the Tax Relief for American Families Act, which would provide $1,200 to join filers earning less than $180,000, plus an additional $600 for each dependent child. A family of four filing jointly under the income cap would receive $2,400.

Nebraska’s manufacturing and agricultural sectors have been particularly concerned with the tariff strategy, as retaliatory tariffs imposed on American exports have closed markets for key commodities. While the economic impact of this round of tariffs remains unseen, the Nebraska Farm Bureau has estimated that a similar 2019 tariff package cost Nebraska farmers more than $1 billion that year.  

$600 million

As OpenSky previously reported, the $600 million set aside for the Perkins County Canal has been the subject of much debate during budget deliberations, with some senators claiming the cash fund should be treated like any other and some declaring it “off limits”. An amendment by Senator Jane Raybould to LB 1072, one of the two bills making mid-biennium adjustments to the budget, would have transferred $79 million from the fund to help bridge the state’s current budget deficit, but was voted down in the first round of debate. The funding for the canal project was appropriated in 2022, when the Legislature’s fiscal picture was much brighter, alongside an earmark for a recreational lake that has since been clawed back to cover a budget deficit. Proponents said the canal is needed because the South Platte River Compact with Colorado promising Nebraska a certain amount of water is dependent on construction of the canal. 

Community feedback sessions have seen mixed reviews, with some being hosted by lawmakers and others by the Army Corps of Engineers. The Corps added an additional meeting on March 31 in Ogallala, intended to gain more input from Nebraskans who reside in the western portion of the state. They also held meetings in Julesburg, Colorado, where some expressed concerns that farmland that had been in their families for more than a century would be underwater if proposed plans for a dam and reservoirs continued. The Corps will publish a draft Environmental Impact Statement in 2027. The finalized statement and record of decision would come in February 2028.