Main budget adjustment bill stalls after second failed cloture vote

Lawmakers fell short March 25 in their second attempt to move the main budget adjustment proposal to the final round of debate.

LB1071, introduced by Speaker John Arch of La Vista at the request of Gov. Jim Pillen, would provide, change and eliminate provisions related to appropriations for state expenses for the biennium ending June 30, 2027.

Debate on the bill has centered on a provision meant to provide “gap year” funding for private school scholarships.

The federal One Big Beautiful Bill Act of 2025 created a federal tax credit starting Jan. 1, 2027, that allows individuals a dollar-for-dollar, nonrefundable tax credit of up to $1,700 for donations to organizations that provide scholarships to students attending private and religious schools.

The governor’s proposed budget adjustments included $7 million in FY2026-27 to fund scholarships in Nebraska until the federal law takes effect.

An Appropriations Committee amendment adopted on general file would lower that number to $3.65 million, with $3.5 million for scholarships and $150,000 for administrative costs. Families would have to be at 185% of the federal poverty level or less to qualify for scholarship funds.

Plymouth Sen. Tom Brandt unsuccessfully attempted to remove those funds on the first round of debate. Both he and Ralston Sen. Merv Riepe indicated that they would not support the budget moving forward with inclusion of the scholarship funds.

In response, Elmwood Sen. Robert Clements, chairperson of the committee, offered an amendment during select file debate March 19 with the scholarship provision removed. Several senators said they would not support LB1071 unless the scholarship provision was reinstated, however, and an attempt to invoke cloture and force a vote on the bill that day failed.

When debate resumed March 25, Clements offered a substitute amendment containing all of the provisions the committee had included in the original select file amendment, as well as the scholarship funding.

Syracuse Sen. Bob Hallstrom supported the bill and the amendment, noting that there were many aspects of the budget adjustment package he opposed, but that it was time to move forward.

Lawmakers previously demonstrated that they could not advance the budget adjustment package without the scholarship funding included, he said, and the “hard decisions” regarding budgeting shouldn’t be “dictated” by a single policy issue.

“At the end of the day, it’s the totality of the budget that we need to look at,” Hallstrom said, “and I would hope we can all rise above and make the appropriate decision today.”

Sen. Ben Hansen of Blair said the scholarship funding was balanced by inclusion of a provision from Bennington Sen. Wendy DeBoer’s LB304, which would earmark $10.7 million from the Health Care Cash Fund for the federal Child Care Subsidy program.

The funds would support the permanent extension of expanded eligibility for the program, which provides a direct subsidy to providers to cover a portion of child care expenses for low-income families.

Income eligibility guidelines were expanded in 2021 from 130% of the federal poverty level to 185%. That expansion is scheduled to expire Oct. 1.

Hansen acknowledged that supporters and opponents of both proposals were unhappy, and said the best solution was for lawmakers to compromise and retain both provisions, since each would benefit low-income Nebraska families. Doing so, he said, also would avoid “mutual destruction” in the state budget process.

“We have heartburn on both ends,” Hansen said. “Colleagues, if there is a time to hold our nose a little bit, this is the time to do it.”

Omaha Sen. Dunixi Guereca opposed the amendment. He suggested that authorizing scholarship dollars in the budget would be used to open the door to charter schools in Nebraska in spite of proponents’ claims that the goal is simply to fill a one-year funding gap and not to change state education policy.

“I gotta be honest, folks, I don’t trust that,” Guereca said.

Sen. John Fredrickson of Omaha echoed those concerns. He said the goal of supporters of the private scholarship provisions wasn’t preventing children from having to switch schools for a year, but instead was about laying the groundwork for policy changes down the road.

“It’s not about the kids,” Fredrickson said. “It’s about the precedent of the government paying for private education.”

After two hours of discussion, Arch offered a motion to invoke cloture and cease debate. The motion failed on a 27-15 vote. Thirty-three votes were needed. A failed cloture motion ends debate on a bill for the day.