March 2, 2026

​109th Legislature, 2nd Session

Budget Deficit Grows

A new economic forecast has increased Nebraska’s projected budget shortfall by roughly $175 million, pushing the total deficit back above $300 million despite lawmakers’ earlier progress in reducing it. The Legislature entered the session facing a $471 million gap, which the Appropriations Committee had narrowed to about $155 million through spending cuts. However, updated revenue estimates from the Nebraska Economic Forecasting Advisory Board reduced expected tax collections for the coming fiscal year, raising the projected deficit to approximately $301 million that lawmakers must resolve before the end of March. Appropriations Committee Chair Senator Rob Clements (Elmwood) said balancing the budget remains achievable but will require additional spending restraint.

The revised forecast is driven largely by a projected $110 million drop in corporate income tax revenue over the next two years, reflecting weaker corporate margins and broader economic uncertainty. While statewide GDP has continued to grow, board members pointed to mixed economic signals, including concerns in agriculture and the closure of the Tyson Foods beef plant in Lexington, which is expected to significantly impact central Nebraska’s economy and state tax revenues. Senator Clements and Revenue Committee Chair, Senator Brad von Gillern (Omaha) both said the larger deficit means “everything is on the table,” including deeper spending cuts, possible use of cash reserve funds, and reconsideration of income tax reductions, as they work to finalize a balanced budget.

All-Day Floor Debate and Filibusters

The Legislature will reconvene on Tuesday following a three-day weekend. Last week closed out committee hearings, with Tuesday being the first day of all-day floor debate. The Unicameral is expected to adjourn around 5:00 p.m. for the next few weeks before commencing late-night sessions. Only 25 days remain in the 109th Legislature, with much work left to do.

Last week featured another prolonged debate on LB 455, introduced by Senator Bob Hallstrom (Syracuse). The legislation would make workers' compensation first reports of injury private in an effort to prevent unnecessary solicitations by trial attorneys whenever an employee is injured at work. With the Committee Amendment, the bill also contains LB 313, introduced by Senator Teresa Ibach (Sumner), which would modify the current standard for payment of judgments or settlements in workers’ compensation subrogation cases. A cloture vote to end debate is expected tomorrow morning. This vote will signal where parties stand on several pieces of other pending business-friendly legislation, including tort reform and further modifications to the Nebraska Healthy Families and Workplaces Act, also known as Initiative 436 or the “Paid Sick Leave Ballot Initiative”. 

NBA-Supported Bills Adopted

On Friday, the Legislature advanced two bills supported by the NBA, LB 783 and LB 836. Both bills have been sent Governor Jim Pillen for his signature.

LB 783 - Adoption of Uniform Assignment for Benefit of Creditors Act & Tax Exemption for Assignments
The bill enacts the Uniform Assignment for Benefit of Creditors Act, establishing detailed rules and definitions for voluntary assignments of a debtor’s assets to an assignee to satisfy creditor claims. It sets out eligibility and duties of assignees, creditor notification and claims procedures, asset management, priority of distributions, judicial oversight, and protections for parties involved. The bill also amends section 76-902 to exempt these assignments from the documentary stamp tax and provides for severability. (NBA Position: Support)

LB 836 - Revisions to Examination Charges and Assessments for Financial Institutions
.The bill amends several sections of Nebraska law to modernize and broaden the Department of Banking and Finance's authority for levying assessments and examination costs on a wider range of financial entities, including both state-chartered and licensed/registered entities (such as mortgage lenders and money transmitters). It revises the methodology for calculating assessments, expands the basis for such assessments beyond asset size to include other measures (transaction volume, origination, servicing, etc.), and clarifies procedures for billing, proration, and penalties for nonpayment. Provisions relating to billing for examiner time are removed and replaced with broader director-set rates. The bill also expands the grounds for suspension or revocation of charters, licenses, or registrations for nonpayment. (NBA Position: Support)