Pillen, senators reflect as 2026 Nebraska legislative session ends

The Nebraska Legislature finished its 2026 session Friday by upholding Gov. Jim Pillen’s vetoes and reflecting on work accomplished -- and left undone.

Addressing senators on the last day of this session, Pillen praised their work, particularly in balancing the budget.

“We passed a fiscally, historically, conservative balanced budget by decreasing spending, by using idle ‘pillowcase’ money and increasing revenue, while we ensured services improved, not cutting them,” Pillen said.

Offering a sharply different perspective was Sen. Danielle Conrad, a registered Democrat in the officially nonpartisan but Republican-dominated Legislature.

“I think who really got left out this year were Nebraska's working families, and the other, I think, significant casualty was upholding the will of the voters in Nebraska,” Conrad said.

Between those divergent opinions, there was little doubt whose viewpoint dominated Friday, as lawmakers rejected all attempts to override Pillen’s vetoes of bills they had passed.

One example was an attempt to override the governor’s veto of a bill that would have required housing developers who use subsidies from the state’s Affordable Housing Trust Fund to make sure a certain percentage of housing units were accessible for people with mobility, hearing or visual impairments.

The Legislature had passed that bill (LB839) on a vote of 34-15, and it would have taken only 30 votes to override the veto. But Sen. Terrell McKinney, a supporter of the bill, predicted that override attempt would fail.

“It speaks to this biennium, and it speaks to this Legislature, and it speaks to the people who act as if they're allies and not allies, smile in your face but stab you in the back. That's what this speaks to, and that's what we're about to hear from others that are going to stand up and don't support this override. And you know, it's the Nebraska Legislature,” McKinney said.

Sen. Rob Dover, one of those who voted for the bill but not the override, explained his thinking on the bill, which was sponsored by Sen. Victor Rountree.

“The core thing of his bill that was good was he was going to have the cities find out how many units were there for the immobile, the hearing- and vision-impaired people. That's where you start. You don't just mandate everything across the board,” he said.

Similarly, attempts to override vetoes of bills mandating paid parental leave, allowing managed care organizations to absorb copays for people who could not afford them, and allowing cities to count snow and ice removal and flooding expenses as emergency expenses, also failed.

In end-of-session interviews, senators offered divergent opinions on their accomplishments, or lack thereof. Sen. Kathleen Kauth emphasized the positive.

“Getting the budget figured out was probably the biggest thing. I mean, we had huge swings in deficit, and our Appropriations Committee did incredible work trying to figure all of that out, and getting that budget passed was really important,” Kauth said.

At the start of the year, projections showed the state would end the current two-year budget cycle with $471.5 million less than its legally required 3% reserve. But through a combination of budget cuts, fund transfers, tax increases on items including so-called skill games (LB901), and dipping into the state’s cash reserve, the state is now projected to squeak by with a little more than $6 million to spare. Still, current projections anticipate another shortfall, of $632 million, in the next two-year budget cycle.

Sen. Machaela Cavanaugh took a dim view of how the budget (LB1071 and LB1072) got balanced.

“We had a budget that did nothing very good for the people of Nebraska, but protected pools of state dollars that go to the wealthiest Nebraskans,” Cavanaugh said.

Cavanaugh pointed to the continuation of cuts to the top bracket of the state income tax, and state spending intended to offset local property taxes, including large landowners.

Those offsets, in the form of homestead exemptions and credits on property owner’s tax bills, amount to about $1.4 billion this year – an increase of $100 million, but still not enough to cancel out the rise in property taxes levied by local governments.

One item not included in the final budget, despite Pillen’s backing for it, was a scholarship program for students in private and religious schools.

Lawmakers passed tax incentives (LB1165) aimed at persuading Union Pacific to maintain its headquarters in Omaha as it seeks to merge with Atlanta-based Norfolk Southern. Those incentives could total more than $50 million.

They also approved cuts to Medicaid eligibility. Federal legislation passed last year authorized states to end retroactive eligibility, like Nebraska’s current practice of covering bills from up to 90 days before the application was submitted.

Federal law now allows two months for traditional Medicaid enrollees and one month for Medicaid expansion enrollees. That’s what the Legislature approved (LB958), despite Pillen’s proposal to end retroactive eligibility altogether.

Lawmakers also approved a bill (LB935) calling for a variety of increases in fees, including $26 for a divorce, $36 for traffic violations, and $45 for civil lawsuits in district courts.

They also approved continuing child care subsidies (LB304) for families with incomes up to 185% of the federal poverty level. Those subsidies, which benefit families with incomes up to about $59,000 for a four-person household, had been scheduled to expire in October.

At the same time, they approved a lower minimum wage (LB258) for teenage workers, and slower increases for everyone else . Despite voters’ having approved a $15 minimum wage that went into effect in January, employers will now be able to pay 14- and 15-year-old workers $13.50 an hour. Workers aged 16-19 can also be paid at that rate for 90 days as a training wage. And future increases for everyone will be limited to 1.75 percent per year instead of inflation.

Lawmakers also had mixed reactions to proposals on social issues. They declined to pass Kauth’s legislation (LB730) that would have restricted school and state agency bathrooms and locker rooms to people according to their sex at birth. They also rejected Pillen’s proposal (LB1050) to require schools to hold back students who are not proficient in reading by the third grade. But they enacted his legislation (LB653) restoring schools’ ability to suspend children in kindergarten through second grade, an ability that legislation had removed in 2023.

They also approved $3 million worth of tax credits for agencies that work to combat domestic violence and human trafficking (LB901).

One longstanding issue addressed by lawmakers was a proposal (LB1187) dealing with the state’s brand inspections for cattle. The legislation will allow fees to pay for brand inspections to rise from $1.10 to $1.50 per head. But it will also require feedlots, who have long chafed at paying fees they say provide them no value, to pay only 25% of that.

Senators also approved legislation (LB1261) that would allow private companies to build electrical generating capacity to serve large customers like data centers. The companies would also be able to sell excess power, but only with permission of the public power supplier serving that area.

Lawmakers also passed a bill (LB1235) authorizing application fees of up to $50,000 for cultivation, manufacturing and dispensing of medical cannabis. However, they did not pass a measure (LB933) that would have given immunity to health care professionals for recommending the drug to patients, which supporters of medical marijuana say is necessary to overcome professionals’ fears of being sued or losing their licenses.

Nebraskans visiting the Capitol in the future will have to go through security and will not be allowed to bring guns into the building unless they have a concealed carry permit, under another bill (LB1237) that passed. And candidates will be permitted to use campaign funds (LB986) to pay for security equipment and personnel.

In his speech at the end of the session, Pillen promised to keep working to lower property taxes, which has been his top priority.

“I believe in 2027, it's time we come together and solve the problem. I won't go into the list of why, but when this body reconvenes, I'm challenging the 110th (Legislature) that we just come together and we solve the property tax crisis,” he said.

But while the governor, who is seeking reelection, looked forward to continuing work next year, Conrad looked forward to change.

“The good news is it's an election year, and there's a lot of hotly contested legislative races. There's a gubernatorial race. And Nebraskans, who are frustrated with this cynical approach that put profits over people, have a chance to ask their candidates where they stand on issues and to let their voice be heard,” she said.

The May 12 primary election, followed by the general election Nov. 3, will determine which cast of characters will be making decisions for Nebraskans next year.