As Nebraska grapples with a tightening budget, state agencies are considering unusually severe ways to cut spending. The ideas on the table include eliminating positions, reducing public services and, as first reported by Nebraska Public Media News, even having some workers sleep in their cars during work travel instead of paying for hotel rooms.
Here's what to know
After tax collections fell short of expectations, Gov. Jim Pillen told agency leaders to prepare for leaner budgets. Documents first obtained by Nebraska Public Media News and reviewed by Nebraska Examiner show agencies were asked to manage under at least a 5% monthly withholding and a hiring freeze covering most positions.
Nebraska has a $208 million budget deficit, and the next biennium is projected to bring another $840 million gap. Agencies responded with proposals that included cutting staff, increasing fees, closing offices and limiting travel.
One of the most striking suggestions came from the Nebraska Board of Barber Examiners, which said it would reduce inspections and have traveling employees sleep in their vehicles rather than stay in hotels. Other agencies suggested reusing old uniforms, leaving vacant jobs unfilled and doing less public outreach.
Pillen's office said the agency submissions remain only "hypothetical fiscal restraint considerations" and still need further review.
More background
The Department of Revenue proposed tightening homestead exemption rules so that eligible property owners would need to pay at least 10% of their tax bill before credits begin. That change could affect older adults and disabled Nebraskans who depend on the exemption to remain in their homes.
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The Nebraska Commission for the Blind and Visually Impaired said it could discontinue a pilot Support Services Provider program for the DeafBlind community. At the same time, the state's emergency fund is under pressure, with military officials saying the disaster-response account cannot withstand more cuts while Nebraska continues repaying costs tied to events such as the 2019 floods.
Not all larger agencies submitted reduction plans, and some said they had already been working to lower costs. Secretary of State Bob Evnen's office, for instance, said it already reviews spending closely and did not propose additional cuts.
What's being done?
To address the budget gaps, state officials are looking to save money through smaller payrolls, fee increases and shifting costs into cash funds supported by licenses or similar charges. The Department of Insurance said higher licensing fees would raise $2.2 million each year, while the Department of Labor wants a temporary increase in contractor registration fees that could generate as much as $2 million if lawmakers approve it.
Some agencies said they would rely on attrition instead of immediate layoffs. The Nebraska State College System would freeze 14 full-time jobs and leave 12 more positions vacant, and both the State Fire Marshal and the State Historical Society also identified positions for cuts.
Critics say broad spending reductions can create new problems if they erode oversight or weaken essential services. Nebraska auditor of public accounts Mike Foley cited audits that found waste and misuse of taxpayer money.
"Most disconcerting of all, perhaps, was the reaction of DHHS' middle management to the WIC audit letter," Foley said.
"Such a 'penny-wise and pound-foolish' approach to budgeting would unquestionably jeopardize countless taxpayer dollars by dramatically increasing their risk of undetected (much less unprevented) loss or misappropriation," Foley wrote in his letter.
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