Budget amendment keeps Nebraska rural and workforce housing funds in place

By Brian Beach , Reporter Nebraska Public Media

May 12, 2025, 9 p.m. ·

Nebraska State Capitol building from the steps — Nebraska State Capitol (Photo by Fred Knapp)

The State of Nebraska’s budget for the next two years is coming into view as senators advanced additional appropriations bills to the final round of debate Monday.

After a morning and early afternoon advancing the main appropriations bill, LB261, the Legislature turned to LB264, a separate bill dealing primarily with transfers to and from state agency cash funds.

The legislation advanced from the first round of debate last week, and senators voted on several amendments over the course of four hours Tuesday.

Among them was an amendment from Sen. Bob Hallstrom to keep money in the Rural Workforce Housing and Middle Income Housing Investment Funds.

The funds are used to provide matching grants to non-profit development organizations which administer the funds to developers working on housing projects costing under $330,000.

The budget proposal coming into Monday’s debate would have taken $4 million from each of the funds and added it to the state’s General Fund in an effort to balance the budget.

But Hallstrom said that move could leave some housing projects across the state in limbo. Rural workforce housing projects across 13 legislative districts totaling $12.54 million were approved in the last batch of funding and those projects could be put on pause if funding is cut.

“I know there are some who are free market enterprise supporters as I am, that question the need for the state to be involved in providing funding,” Hallstrom said. “But I think what we've seen over the years is that this is an area, particularly in this time and place, where some type of incentive or subsidy is necessary to build the homes and to increase the housing supply and the housing stock that we need for employers to fill positions that are open in terms of employees and putting a roof over their head.”

To keep the budget balanced, Hallstrom’s amendment also takes $8 million from the Affordable Housing Trust Fund and places it in the General Fund in 2026.

“I again will pledge to use whatever is at my disposal to try and avoid the ultimate transfer a couple years down the road from this fund,” he said. “But in the meantime, I think our best course of action is to provide for the reinstatement of the Rural Workforce Housing Fund.”

Sen. Danielle Conrad pushed back on Hallstrom’s optimism on the availability of funds in 2026. She said she had concerns over how the cuts could impact places like Lincoln and Omaha, which don’t directly benefit from the Rural Workforce Housing Investment Fund, but do utilize the Affordable Housing Trust Fund.

“I’m puzzled at the amendment, because I'm not convinced that this is a net gain for housing,” she said. “I think what this really is is papering over the Appropriations Committee's work, which ended up in a cut to affordable housing of $8 million.”

After just under an hour of debate on Hallstrom’s amendment, senators voted 26 to 5 to adopt it.

Senators also adopted amendments transferring funds from the Nebraska Litter Reduction and Recycling Fund and increasing the amount of money transferred from the Cash Reserve Fund to the General Fund.

Next, LB264, along with the other primary budget bills, will need to advance through one more round of debate before they arrive on Gov. Jim Pillen’s desk.