Pillen Announces Further Crackdown on State Spending

by John Gage

(Picture credit Matt Johnson)

Governor Jim Pillen announced Wednesday that he would be directing state agencies to further cut spending in response to lower revenue from tax cuts the Legislature had previously passed. Pillen issued a memo to all the cabinet heads of boards, commissions, and agencies directing them to “double” their efforts in restraining spending.

“I am pleased with the progress we’ve made, but I am not satisfied,” Pillen said in a statement. “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.”

The memo directs cabinet heads to have “restraint in travel, hiring, membership dues, implementing technology upgrades, and purchasing equipment.”

Additionally, agencies, commissions, and boards are expected to submit plans to cut spending, report monthly budgets, and put a freeze on hiring or the creation of new positions.

Pillen’s office said the cuts were made necessary because Nebraska taxpayers were getting more money back on their income tax returns.

“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,” the governor’s office stated.

In 2023, the Nebraska Legislature passed and Pillen championed income tax cuts that will take the state’s top rates down to 3.99% in 2027. Republicans have said the cut will help grow the state and keep it competitive with its neighbors while Democrats have blamed the cuts for the state’s budget deficit in recent years.

Last year, Pillen asked agencies to look to cut their budgets by 10%. The governor said the cuts were part of his broader goal to shrink the size of government.

— John Gage is the executive editor of The Plains Sentinel.