Senators advance one of two budget bills, but school vouchers torpedo the other

By Noelle Annonen , Multimedia Reporter

March 19, 2026, 9 p.m. ·

Speaker John Arch (Photo courtesy Nebraska Legislature)

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The Nebraska Legislature voted to advance one of the two budget bills it discussed on Thursday, bringing a budget deficit from $125 million down to $42 million.

The bill includes appropriations from funds in an effort to close that deficit but includes notable expenses, including the continuation of a child care subsidy originally intended to sunset.

Nebraska passed a law in 2021 that temporarily increased household income requirements for child care subsidies. The eligibility threshold went from 130% to 185% of the federal poverty level. This raises the cap from $42,000 to $59,000 for a family of four.

The new limits were set to revert to the lower ones in October, so the Appropriations Committee moved to recommend that the government provide funding to keep the subsidies as they are. The funds will come from the state’s Health Care Cash Fund and not from general fund tax dollars. This is a $10 million expense. Sen. Ben Hansen suggested sunsetting the child care subsidy in two years, but he was met with stiff resistance from lawmakers, notably Sen. Danielle Conrad.

“The thousand or so kids whose parents are working are not the reason we are in a structural budget deficit,” Conrad said. “And they shouldn’t be caught in the crosshairs of these ridiculous political games.”

Included in the bill was an effort sponsored by Sen. Macheala Cavanaugh to keep funds in place for homeless shelters. To help close the budget deficit, the Appropriations Committee originally pitched taking $6.5 million from the fund for homeless shelters. That fund currently has a balance of $11.5 million.

Cavanaugh explained that each year, the Legislature puts $4.5 million into the fund and not all of it has been spent. But in recent years, the entirety of the annual appropriations has been spent, with Sen. Jane Raybould noting that the demand for shelters is only going up, especially over the winter. She added that a shelter representative sent her a letter confirming this, asking for lawmakers to not take their funding.

“Nobody wants to go to a shelter,” Raybould said. “But if they have to, they must.”

Cavanaugh worked out the budget so that the $6.5 million will not be taken from the fund until next year to keep the homeless shelters from having to decrease services in the meantime. She said there is room in the budget to take the money next year.

The first of the two budget bills did not advance Thursday. It was held up by voters who want to keep a private school voucher program in place. Speaker John Arch admonished the Legislature as they adjourned, saying that the body’s only mandate is to balance the budget. He thanked the senators who voted in favor of the budget, regardless of their personal views on the school vouchers.

“I have to tell you, I am quite disappointed with the outcome of today,” Arch said. “I want to reassure the residents of Nebraska: The Legislature will pass a balanced budget before we adjourn this year.”