By Erin Bamer | Nebraska Examiner
Balancing the budget, tax reform, scheduling among top priorities for Arch heading into final session as speaker
Lincoln, Neb. — Heading into his final legislative session as a term-limited Nebraska state senator, Speaker of the Legislature John Arch of La Vista said he expects the short, 60-day session to fly by.
The session begins Jan. 7, and between the possible expulsion of a senator, discord over the repurposing of a state prison facility into an ICE detention center and a continued push for property tax relief, Arch acknowledged there are more than enough issues to occupy lawmakers’ time before they adjourn in April.
Arch’s top priority among those issues is filling a $471 million budget hole by Day 50, he said, the deadline lawmakers have to complete budget adjustments and send the proposal to Gov. Jim Pillen’s desk.
“Honestly, there is the budget, and then there’s everything else,” Arch said.
Budget struggles also took precedence during the Legislature’s 90-day session this spring, when lawmakers worked to fill a budget deficit that at one point grew to $432 million. After making numerous cuts that senators acknowledged were painful, the session concluded with the state’s two-year budget projecting a modest $4 million surplus.
That surplus didn’t last long, because new economic projections made in July put Nebraska back into a projected deficit of $95 million. When Nebraska’s Economic Forecasting Advisory Board met again in October, projections brought the expected shortfall to $471 million.
Arch said balancing Nebraska’s budget is more difficult than normal, because the state’s revenue streams continue to evolve. Passage of the federal “One Big Beautiful Bill” in July is expected to cost Nebraska’s state government about $406 million over the next four fiscal years, according to the state Department of Revenue.
Additionally, Nebraska is in the midst of scaling down its individual income tax rates to eventually hit 3.99% in 2027. Once lawmakers reach 2027, Arch expects state revenue sources to stabilize, which he said should make managing the budget a bit easier.
“After we flatten out in ‘27, there is a very simple formula, and that is: You spend less than you bring in,” Arch said.
The looming budget challenge is on the minds of many senators, and Arch said there may be fewer new bills introduced in 2026. Recent sessions have established a trend of a higher-than-average number of new bills introduced within the first 10 days of a legislative session, and there are still 240 bills carrying over from 2025, according to legislative records.
At the very least, Arch said lawmakers are aware that there needs to be extremely good cause to introduce any bill with an appropriation attached.
“I’ll emphasize ‘extremely,’” Arch said. “Because it’s just going to be very difficult for a bill to pass that has an A-bill attached.”
Aside from balancing the budget, the speaker said another one of his goals in setting the session’s agenda is scheduling as many priority bills as possible.
However, he acknowledged multiple other issues that could make staying on that track more challenging. He said any extraneous matters could mean priority bills suffer.
During the legislative break, Arch reset all existing priority bills from 2025 back to normal status. He said this was because he felt not all were “ready,” and he intends to start 2026’s floor debates with worksheet order bills before focusing on senators’ personal priorities. He noted that senators could still reprioritize the reset bills.
Even with less time for bills, Arch said there is still value to introducing bills on important topics for the sake of starting conversations. He noted that his recent bills on government efficiencies and legislative oversight took years to pass.
Arch said he intends to bring a smaller government efficiency bill in 2026 that would continue to eliminate certain government reports he views as “obsolete.” He said lawmakers should always keep government efficiency on their mind, because there is always something worth addressing.
On legislative oversight, Arch’s Legislative Bill 298 established a new Division of Legislative Oversight and a new Legislative Oversight Committee. This being a significant change to Nebraska’s governmental structure, Arch said it needs time to settle before further bills with changes should be brought.
Arch anticipates that property taxes will remain a top issue for lawmakers in 2026. While it is also one of his goals to make progress on tax reform, he said he doubts there will be enough revenue to pass new tax relief.
In recent sessions, Arch said senators have been more focused on quick fixes for immediate tax relief, mostly through allocating state dollars to local governments.
Arch said he would like to shift the focus to structural reforms that address the root causes of rising taxes. Arch identified several factors that he believes contributes to higher taxes — rising property valuations, unfunded government mandates, and local government spending.
He said the Legislature ought to revisit its discussion on spending caps, and encourage local governments to be stricter about how it spends money. Though that may take more than one session to accomplish, he argued it will be better for the state in the long run.
Arch, who will be term-limited after 2026, said he hopes people look back on his legacy and view him as a speaker who put the institution first.
The 2023 session — his first as speaker — was contentious from start to finish, and Arch said he was pushed in multiple directions in regard to his scheduling. In those instances, he believed ceding to the pressure would not be good for the institution, so he stuck to the Legislature’s policies and held strong to those principles in subsequent sessions.
“You have to have the opportunity to debate what is important in our society, and we as senators have to learn how to do that well,” Arch said. “Some days we do that well, some days we don’t.”