Gov. Pillen Issues Memo Directing Further Reductions in State Spending; Outlines Processes to Ensure Compliance

LINCOLN, NE – Governor Jim Pillen is directing that state agencies, boards and commissions do their part in reducing state spending, to ensure that Nebraska taxpayers continue to receive the benefit of reduced income tax rates and investments into property tax relief. In fiscal year (FY) 2026, the State paid out $307 million more in refunds than was anticipated. That represents cash directed back into the pockets of Nebraskans, but efforts must continue to close the gap in state revenue.

“I am pleased with the progress we’ve made, but I am not satisfied,” said Gov. Pillen. “We must do better. We must run government like a business and embrace the innovation and change that is necessary to shrink the size of government. Bloated businesses don’t survive for long, and it’s our duty to make sure our State adapts and changes to stay competitive and resilient.”

In his memo, the Governor made clear that appropriations in the current fiscal year as well as the biennium years of FY 27/28 and FY28/29 would be reduced.   Agencies, boards and commissions have been ordered to exercise fiscal restraint in the areas of travel, hiring, membership dues, implementation of technology upgrades and equipment purchases. In addition, those entities are encouraged to consider additional avenues for budget savings like reduction of redundant processes and services, consolidation of duties and ensuring that programs are meeting their stated objectives for Nebraskans.

To ensure compliance, Gov. Pillen is requesting the submission of monthly reports beginning July 31 that detail, among other things, the amount of appropriation saved as a result each entity’s initiatives. The State Budget Division will be responsible for receiving and reviewing those reports, as well as providing final approval for newly created positions and hiring.