Legislature passes budget and tax bills; advances branding bill

By Fred Knapp , Senior Reporter/Producer Nebraska Public Media

April 1, 2026, 5 p.m. ·

The Nebraska Legislature in session. — The Nebraska Legislature in session Wednesday. (Fred Knapp/Nebraska Public Media News)

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The Nebraska Legislature moved closer to balancing the state’s budget Wednesday, passing the main budget bills along with a measure that increases tax revenues.

On the 54th day of their scheduled 60-day session, senators finished their work on the budget bills with no debate. From a $471.5 million projected shortfall when the session started in January, through contentious hearings and debates over spending cuts and fund transfers, they had reduced that shortfall to $38 million.

Final approval was expected to be routine when Speaker of the Legislature John Arch called for the final vote, as announced by Lt. Gov. Joe Kelly.

“Shall LB1071 pass with the emergency clause? All those in favor, vote aye. All those opposed, vote nay.” Kelly intoned.

For what seemed like an eternity, but was in fact less than 10 seconds, lights on the voting board lit up red, as 36 senators at one point voted against the budget. Arch, normally impassive, allowed his jaw to drop almost an inch before Sen. Kathleen Kauth, and then her colleagues, explained their votes.

“April Fools, April Fools,” they cried out.

Arch readjusted his jaw, then joined in the laughter and applause at the joke his colleagues had played on him as he finishes out his legislative tenure.

Things then turned serious, as Sen. Brad von Gillern, chair of the Revenue Committee, asked for support of LB901, a bill raising taxes.

“The fiscal note dated March 25 shows a positive general fund impact for (LB)901 of nearly $26 million for fiscal years '26 and ’27, and the Department of Revenue is projecting closer to $30 million in the out years. So as you can see, it's critical that we pass 901 as a piece of the puzzle to resolving our budget situation this year,” von Gillern said.

The bill allows the Department of Revenue to add a collection fee of $25 or 10% for all delinquent taxes. It repeals sales tax exemptions on items ranging from game birds to biochips and data center equipment. And it raises the taxes on so-called games of skill from 5% to 10%.

It also provides tax credits to nonprofit organizations fighting domestic violence and sexual assault. Sen. Bob Andersen objected to those provisions.

“From my perspective, this is a giveaway to the nonprofits on the order of $5 million," he said. "And in the tax situation we're in, we're upside down on the budget. We don't have enough money. Giving $5 million -- we're basically laundering the money, because once they get the money back from the marketplace where they sell the tax credits, there's no traceability."

The credits actually total closer to $3 million. After less than an hour of debate, senators voted 36-13 final approval for the tax bill.

Lawmakers also took on the controversial issue of the state’s cattle brand inspection laws. Sen. Mike Jacobson proposed an amendment that adds representation on the brand committee from eastern Nebraska, where brand inspection is not currently required but many cattle spend the winter. It would also raise brand inspection fees from $1.10 to $1.50 per head.

Teresa Ibach is the state senator for Nebraska’s 44th District. (Courtesy of the Nebraska Legislature)

Sen. Teresa Ibach, who has championed the interests of feedlot owners who want a more modern system of identification that relies less on traditional branding, said the proposal is a start.

“LB1187 represents a step, just a step, in modernizing Nebraska's cattle industry,” Ibach said.

Ibach also explained how the proposal divides up the state for representation on the Brand Committee, invoking some human parallels, including a historic voting rights case.

“Each district contains just over one million cows. We believe that all cows matter, regardless of where they are located, so we went with the precedent set in Baker versus Carr of one cow, one vote,” she said.

Sen. Tanya Storer, championing cow-calf operators who rely on brand inspections to protect their property, suggested the changes will have gone far enough.

“I've heard over and over again here that ‘It's time to do something.’ Well, I'm telling you, this legislation is a substantial something and reflects the largest changes to brand law at any one time, perhaps ever. So if this passes, we've done something. We're done,” Storer said.

Senators gave the bill first-round approval on a vote of 36-4.

Editor’s note: Nebraska Public Media News appreciates getting technical help on this story from NTV.