Nebraska budget stalls in Legislature again over scholarship issue

By Fred Knapp , Senior Reporter/Producer Nebraska Public Media

March 25, 2026, 5 p.m. ·

Nebraska Capitol (Fred Knapp/Nebraska Public Media News) — Nebraska Capitol. (Fred Knapp/Nebraska Public Media News)

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The Nebraska Legislature failed once again to advance a budget bill Wednesday as senators disagreed over funding scholarships for students in private and religious schools.

Last week, senators rejected a version of the budget that did not contain money for private and religious school scholarships. So Wednesday, they tried again, this time debating a proposal that did contain the money – about $3.5 million.

It also contained about the same amount – $3.2 million this fiscal year, $4.2 million the year after that – to maintain child care subsidies for families with incomes up to 185% of the federal poverty line – about $61,000 for a family of four.

Without that provision, starting in October the subsidies would only be available up to 130% of the poverty line, or about $43,000 for the same family.

Sen. Ben Hansen said both the scholarship and the childcare provisions gave different senators heartburn. But he said including them both was probably the way to go.

“This, in my opinion, is probably the best path forward for this budget, not only to move a budget forward, but to help many of these families with low income children and low income households to be able to live a better life,” Hansen said. "Now, if this does not pass, we may be stuck again and then ultimately ends up in mutual destruction."

Sen. Bob Hallstrom noted that the scholarship money, like the childcare subsidies, would be limited to families at or below 185% of poverty.

And he said supporting the childcare provisions but not the scholarships would be contradictory.

“We're saying it's quite all right to spend public funds to benefit those kids and their families at a private run child care, but once they reach age 5, we're going to abandon them," he said. "And at the same time, neither the family's needs or the children's needs have changed one iota."

Opponents of the scholarships argued that voters had repealed a program that provided them in 2024. Supporters said the money for them was simply to cover a one-year gap between the discontinuance of that program and the beginning of a similar federal program that takes effect next January.

Sen. Tanya Storer, supporting the scholarships, said the appropriation would have a limited effect.

“It is not changing the policy in Nebraska on school choice. It is not. It is not. It is a one-time fund to help ensure that students who benefited from the opportunity scholarships previously are not uprooted, and their families are not disrupted, and that those students can have continuancy in their education,” Storer said.

But Sen. John Fredrickson, arguing against the scholarships, said the money was not the point.

“This is not about the $3.5 million for these kids. The proponents of this want this so desperately because they want precedent. Every single person who's pushing this so hard wants to come back in 5, 10, 15, 20, years and point to the fact that we did this,” Fredrickson said.

Fredrickson said supporters of the scholarships could raise the money needed to cover the gap year through charitable donations, and offered to support those efforts.

“Don't be fooled, if you're watching this at home, that it's about these kids that are being thrown out of school. They're not being thrown out of school. If that's happening, come talk to me. I'll write you a check for your tuition if you're gonna be thrown out of school,” he said.

Sen. Loren Lippincott (Photo courtesy Nebraska Legislature) — Loren Lippincott

But Sen. Loren Lippincott read from a letter from Dr. Jordan Engle, superintendent and principal of Grand Island Central Catholic Schools, that said denying the funding would hurt.

“If this funding were to go away, we would no longer be able to support a number of families who are completely reliant on it… Schools like ours would be placed in an unsustainable position, forced to choose between turning families away or absorbing financial losses that threaten long term stability,” Lippincott read.

After allowing the two hours he had allotted for debate, Speaker of the Legislature Sen. John Arch moved for cloture – that is, to cut off debate and vote on the bill itself. That move requires support from two-thirds of the Legislature, or 33 votes.

Last week, only 19 senators supported Arch’s move for cloture on the budget. Wednesday, 27 did – still short of what was needed. After the vote, Arch was seen circulating among senators taking a new vote count. He said the budget bill would come up again Thursday.