Gov. Pillen proposed large spending cuts to offset $471M budget shortfall

LINCOLN, Neb. - While insisting concerns of a budget crisis in Nebraska are overblown, Governor Jim Pillen is proposing a nine figure cut in spending. 

During his annual State of the State address Thursday morning, Governor Pillen proposed $495 million worth of spending cuts over the next two years. 

The Department of Health and Human Services would see the largest amount of cuts, facing more than $130 million in reductions next year.

DHHS says the majority of that would come from staffing adjustments and increments in federal funding, along with a $14 million reduction in Nebraska’s Aged and Disabled Waiver program.

All this is to address a projected $471 million budget shortfall in the current fiscal year.

His budget also calls for a decrease in funding for the University of Nebraska system, citing the more than $750 million it has in cash reserves and the ability for the foundation to raise $3 billion instead of relying on financial help from the government.

Pillen said even with the predicted revenue shortage, Nebraska is in good fiscal shape.

The governor’s office estimates his proposed cuts would result in a $125 million surplus by the end of fiscal year 2027.

Those numbers include projected increases in state revenues.

Pillen said the state has a general fund reserve of nearly $2 billion and the highest credit rating in Nebraska's history, adding that it is not the state’s job to hoard taxpayer money as he looks for legislation to lower property taxes.

Additionally, Pillen said there is a clear need to secure the border and go after illegal criminals that are creating chaos across the state, and the rhetoric about Diversity, Equity and Inclusion has to go away.