Pillen’s Budget Bombshell: Nebraska Slashes Staff, Hikes Fees
Nebraska’s Budget Crisis: Governor Asks Agencies to Cut Costs
Important Point: Nebraska is facing a $208 million budget deficit right now, and an even bigger $840 million deficit for the next two-year budget period. This is after lawmakers already tried to fix the budget last session.
Why Is This Happening?
Imagine you have a piggy bank. Every month, you put in your allowance (tax money). But for the last four months, less money has been coming in than expected. The piggy bank is getting emptier, not fuller.
Governor Jim Pillen sent a memo in July to all state agencies (like departments and offices) saying: "We need to find ways to spend less money."
How Did Agencies Respond?
Some Agencies Sent Ideas for Cuts
They proposed things like:
- Cutting staff positions
- Raising fees (charging people more for services)
- Closing offices
- Reducing travel and training
Important Point: The governor’s office says these are just "hypothetical ideas" — nothing is final yet. They need "substantial analysis" first.
Some Big Agencies Did NOT Respond
These major departments did not submit plans:
- Department of Health and Human Services
- Nebraska State Patrol
- Department of Administrative Services
- Department of Motor Vehicles
What Kinds of Cuts Are Being Proposed?
1. Changes to Property Tax Help (Homestead Exemptions)
Department of Revenue suggests:
- People who get property tax breaks (seniors, disabled) would pay at least 10% of their tax bill before getting help
- Before: lowest-income people got 100% exemption (paid nothing)
- Also: closing offices in North Platte and Norfolk
2. Emergency Disaster Fund Running Dry
Military Department (manages disaster response):
- Fund used for floods, tornadoes, etc.
- Still paying back money from 2019 floods
- By 2027-28: only $1 million left — if no new disasters happen
3. Prisons: Cut $10 Million But Keep Services Running
Department of Correctional Services:
- Cut $10 million from general funds
- Use $4 million from other pots (reentry fund, facilities fund)
- Review all jobs to see if duties can be shared by fewer people
Agencies Proposing Staff & Operational Cuts
| Agency | Proposed Cuts |
|---|---|
| State Fire Marshal | Cut deputy position + accountant; limit staff training |
| Board of Barber Examiners | Fewer inspections; staff sleep in cars instead of hotels |
| State Electrical Division | Reuse uniforms if clean and in good shape |
| Commission for the Blind & Visually Impaired | End pilot program for DeafBlind community; cut ads & outreach |
| Public Employee Retirement | Software to auto-answer calls; fewer in-person seminars (even though law requires them) |
| Tourism Commission | Cut positions; print fewer passports; more pickup events to save postage |
| Brand Committee | Already at lowest staff ever; trying to keep costs low |
| State College System | Freeze 14 full-time jobs (save $1M+); leave 12 more empty |
| State Historical Society | Cut ~$240K via job cuts; double membership dues ($35→$70); raise museum fees ($5→$7 adults, $3→$4 kids) |
Agencies Proposing Fee Increases (You Pay More)
| Agency | Fee Change | Expected Revenue |
|---|---|---|
| Dept. of Insurance | Raise licensing fees | $2.2M/year |
| Dept. of Labor | Contractor registration: $25 → $40 (wants $100 later) | $500K–$2M |
| Dept. of Water, Energy & Environment | Unspecified fee hikes | $325K |
| Dept. of Banking & Finance | Raise fees on brokers, advisors | $3M+ over few years |
| Dept. of Agriculture | Use fee-funded cash accounts for salaries/vet costs | ~$280K |
Important Point: When agencies say "cash funds," they mean money collected from fees you pay — not general tax dollars.
State Auditor Pushes Back
Mike Foley (State Auditor) wrote a 5-page refusal. He says his office already finds waste:
- State workers using government cars for personal trips
- Former employees getting benefits they shouldn’t
- Non-profits misusing state funds
His point: Audit the waste first before cutting services.
Summary
- Nebraska is short on money — $208M now, $840M coming up.
- Governor asked agencies to propose cuts in July.
- Some complied with ideas like: staff cuts, fee hikes, office closures, program eliminations.
- Some big agencies ignored the request.
- Proposed changes affect real people: property tax breaks, disaster readiness, prison services, museum fees, professional licenses, and more.
- Nothing is final yet — these are just proposals for review.
- Auditor says: look for waste first.
FAQ
1. What is a "biennium"?
A two-year budget cycle. Nebraska plans its spending in two-year chunks.
2. What is a "homestead exemption"?
A property tax break for seniors, veterans, and people with disabilities. It lowers (or eliminates) what they owe on their home.
3. Why are some agencies not submitting plans?
The article doesn’t say. But big agencies like Health & Human Services and State Patrol may have complex budgets that take longer to analyze — or they may disagree with the approach.
4. Will my fees definitely go up?
Not yet. These are proposals. The Legislature (state lawmakers) must approve most fee increases.
5. What happens next?
The governor’s office will review all proposals, do "substantial analysis," and then decide what to include in the next budget request to the Legislature.
Remember: This is a starting conversation, not a done deal. Lawmakers, the governor, and the public will all weigh in before final decisions are made.