Nebraska Gov. Jim Pillen urged state lawmakers to pass a budget after the state's 2025-27 biennium spending bill fell short of a cloture vote on Thursday.

"The legislature has a job to do — and Nebraskans expect them to get it done," Pillen said in a statement. "My message right now is simple: It's time for them to stop playing political games and pass a balanced budget. The people of our state deserve better."

The budget is in the second round of debate with two key sticking points, state Sen. Rob Clements, R-Elmwood, the chair of the Appropriations Committee, told The Bond Buyer Friday.

"There are going to be negotiations over the weekend," he said. "We'll come back Monday and bring it back. We will get our budget passed."

The final budget "will still have a substantial cash reserve," Clements said. "Our revenues have been steady."

The obstacle to passage that's received the most attention is $3.5 million of school choice funding.

That voucher funding would act as a stopgap to pay attendance costs for private-school students until a federal tax credit takes effect next year. Nebraska voters state school choice program, according to the Nebraska Examiner.

Clements reportedly removed the $3.5 million of funding on Wednesday in an effort to win the 33 votes necessary to advance the budget. But the budget bill was then filibustered, and failed to receive enough votes for cloture.

The governor supports the school choice funding, according to Clements, and now "his staff is working with a bipartisan group to work out a solution" to the budget impasse, he said.

"We have an extremely strong teachers union," Clements said. The union "puts a lot of money into electing candidates favorable to them," he said.

There are several reasons the teachers union opposes the school voucher funding, said Tim Royers, president of the Nebraska State Education Association, a Lincoln-based union representing public school teachers, support staff and university faculty.

Nebraska has had public school choice since 1989, he said, and the NSEA believes "there needs to be a level playing field." Second, in the last general election Nebraska voters repealed a similar voucher measure. And third, he disputed that Nebraskans would be unable to access the federal tax credit until next year.

"They're claiming there's a sort of gap year," Royers said. "(But) you're able to utilize the federal program the next school year." NSEA sees that as a sign that lawmakers are "trying to reinsert their foot in the door to try to expand the voucher program."

"I kind of laugh at the assertion that we can just tell lawmakers how to vote," he added, noting he can name "about a dozen bills in the current session" his organization has lobbied for that haven't gone anywhere.

Another reason "we take exception to that characterization," Royers said, involves the conversations NSEA members had with voters in the lead-up to the referendum that repealed a previous school choice law.

"We've been out and talking with folks in the communities," he said. "The opposition (to vouchers) was actually stronger in more rural, more conservative counties than in the Omaha and Lincoln areas. I think it's because a lot of those counties don't have a private school … (and) for a lot of smaller towns, the public school is kind of the last pillar of the community that remains standing."

The second barrier to the budget's passage is "a childcare subsidy that some conservatives don't prefer," Clements said.

"The governor's proposal was to roll it back to what the benefits were before COVID," he said. "It would set the income threshold lower. The proposal (in the budget) is to raise the income threshold level to maintain it at what it was during COVID. … It's a $10.7 million difference."

Legislators are facing a March 25 deadline and a $646 million projected deficit, due mainly to property tax relief measures and income tax cuts, according to the Nebraska Examiner.

Nebraska is rated triple-A by both S&P Global Ratings and Moody's Ratings after an upgrade from Moody's in March 2025.