Nebraska’s projected budget shortfall for the two-year cycle beginning in 2027 has grown to about $1.2 billion after state forecasters reduced their estimate of future revenue by roughly $355 million.
The Nebraska Economic Forecasting Advisory Board made the projections Friday as it reviewed revenue for the current budget period and prepared estimates for the next biennium. The board’s updated numbers leave the current projected deficit largely unchanged at about $208 million by the end of the fiscal year ending June 30, 2027.
Current budget remains nearly $208 million short
Legislative fiscal analyst Keisha Patent said the board expects state revenue to rise by about $23 million by the end of fiscal year 2027. Existing law will direct those additional dollars into Nebraska’s cash reserve rather than use them to reduce the projected gap in the current budget cycle.
Before Friday’s forecast, the projected shortfall at the end of the following two-year budget period was about $846 million. Patent said the lower revenue estimate for fiscal years 2028 and 2029 adds approximately $355 million to that figure, producing a projected deficit of about $1.2 billion for the next biennium.
- Fiscal year 2027: about $208 million in projected deficit at the end of the current budget period.
- Fiscal years 2028-29: about $1.2 billion in projected deficit after the latest revenue reduction.
- Revenue change: about $23 million more expected by the end of fiscal year 2027, with the money directed to the cash reserve under existing law.
More forecasts are scheduled
The figures will be revised before lawmakers begin work on the next state budget. Patent said the projections will change after the next Tax Rate Review Committee meeting in November. The forecasting board also is scheduled to update its estimates again in February.
The 2027 session is on track to be the third consecutive legislative session in which Nebraska lawmakers address a projected deficit. State Sen. Rob Clements of Elmwood, the term-limited chair of the Appropriations Committee, said the forecast for the next biennium was more severe than he expected. He said Gov. Jim Pillen’s effort to reduce state spending could help with balancing the budget.
“It’s still going to be a belt-tightening year,” said State Sen. Rob Clements.
Pillen said in a news release that the latest forecast means lawmakers will need to identify about $393 million each year for the next three years to balance the state budget. The estimate covers the current budget period and the next two-year cycle, while the official figures remain subject to the additional forecasts planned for November and February.
