Gov. Jim Pillen calls for budget cuts, hiring freeze in new memo

Nebraska Gov. Jim Pillen on Wednesday announced measures to further cut state spending, including a cut in state agency spending and a hiring freeze on most positions.

Pillen said in a news release that the measures are necessary after the state paid out $307 million more in state tax refunds than anticipated in fiscal year 2026, which ended June 30. Tax receipts have come in below projections in March, April and May, leading to a current expected deficit of $172 million.

That’s after lawmakers closed a $646 million budget hole in their most recent legislative session.

The governor has previously sought to cut spending to provide more property tax relief to Nebraska residents and had called for additional cuts during the current fiscal year.

“I am pleased with the progress we have made, but I’m not satisfied,” Pillen said in a news release.

Accompanying the release was a memo Pillen sent to state agencies, boards and commissions in which he called on them to “exercise additional fiscal restraint.”

Among the measures outlined in the memo:

• A freeze on creating any new positions or filling any vacancies without approval from the state budget office. The freeze does not apply to law enforcement or corrections positions.
• A 5% reduction in budgets for all state agencies.
• All agencies, boards and commissions must provide monthly cash flow projections.
• Agency leaders are directed to “concentrate” on eliminating redundant processes, services regulation and aid programs.
• Agency leaders are directed to reduce their agencies’ physical footprint and “consolidate teams and services.”

All state entities are required to submit their plans for reducing spending by the end of the month.

The memo also said agencies should “prepare for downward adjustments to appropriations” not only in the current fiscal year but also in the 2028 and 2029 fiscal years.