ERIN BAMER
Nebraska Examiner
LINCOLN — After state officials initially said Nebraska had made zero cuts to the workforce of the state’s Department of Economic Development, they acknowledged the department has paid roughly 22 fewer full-time employees over the past two months.
Similar workforce reductions have also impacted various other state agencies, prompting new concerns from some frontline workers that Gov. Jim Pillen and his administration are focusing on staff cuts to balance Nebraska’s budget.
A department spokesman, working with the Governor’s Office, initially said, in response to a reporter’s questions, that DED had seen “0 layoffs/reductions in force” in September and October, when the Examiner first asked in early November. The department noted it had seen voluntary departures from posts and would not fill some vacated positions but did not specify how many.
The state clarified the disconnect after payroll records obtained by the Examiner from the Department of Administrative Services in recent weeks indicated 112 full-time employees on DED’s payroll in September, then 101 in October and 93 in November.
Justin Pinkerman, a spokesperson for the Department of Economic Development, acknowledged this week that DED was down to just over 90 filled full-time positions by the end of November.
Governor’s Office spokeswoman Laura Strimple, in a separate statement clarifying what the department previously sent, said all of the reductions in full-time staff from September to November had been voluntary. And the department, via Pinkerman, says the downsizing is part of a winding down of pandemic-era programs.
Last month, Pinkerman had said DED eliminated only a single position this summer, that of Deputy Director of Operations Joe Lauber.
The DED downsizing comes as other cuts have impacted different state agencies, including the Nebraska Department of Revenue. The state laid off 11 revenue agents in October, closed the department’s Scottsbluff office and shrank its Lincoln-based individual income tax collections office.
At a press conference this week for a union representing state employees, the Nebraska Association of Public Employees, Executive Director Justin Hubly said reducing revenue agents when the state is short of funds was a “bananas decision” considering that State Auditor Mike Foley recently reported that unpaid state taxes had grown 15% over the past year, rising above $310 million.
Additionally, Hubly said at least four employees were cut from the state Office of the Chief Information Officer. He said smaller cuts have impacted several other departments in recent months.
At DED, evidence suggests that the majority of the downsizing was focused on managerial and higher-up positions not covered by union protections. Hubly said NAPE logged about seven voluntary departures within DED between June and November. NAPE represents roughly 55-60 DED workers, he said.
Lauber, who served as DED’s deputy director of operations and its chief legal counsel, said in August he was told his position had been eliminated due to budget cuts, and he was escorted out of the building. He had worked at DED for 13 years.
“It came as quite a shock to me,” Lauber said of his dismissal.
Prior to his termination, Lauber said there were signs of budget cuts impacting DED, like hiring freezes and directives to stop travel. He said during a management meeting he attended, then-interim director Maureen Larsen shared that it was the governor’s goal to reduce the size of DED through attrition.
Agencies often do this by not filling positions people vacated through retirements and having or encouraging people to leave on their own. Lauber said the state implemented strategies such as Pillen’s return-to-work order and enforcing a strict 8 a.m. to 5 p.m. work schedule in hopes of getting people to consider whether they wanted to stay working for the department. Lauber said employees were not allowed to end their days earlier than 4:30 p.m.
Hubly said NAPE workers in other state agencies have also seen a pattern of the state cutting jobs this year to save cash.
Pillen has discussed his intent to cut Nebraska’s two-year budget by $500 million by the end of lawmakers’ 60-day legislative session in 2026. Lawmakers will enter the 2026 legislative session needing to fill a projected $471 million budget hole.
Hubly suggested the state implement retirement incentives as a way of tightening the budget, arguing that hiring younger workers would reduce staffing costs. Hubly said the governor rejected this proposal.
Pillen recently named Larsen the permanent DED director after she had served as interim director since July following former director K.C. Belitz’ resignation. Belitz did not return a request for comment.
Prior to her appointment, Larsen served as Pillen’s general counsel and deputy director of his Policy Research Office. Hubly said he’s heard some concerns from workers that Larsen was appointed as director as part of a “hatchet job,” a term often used for someone hired to cut staff, due to a lack of outreach she did with the rest of the department.
“We did hear a lot of concerns when she was kind of installed temporarily,” Hubly said. “She wasn’t out and about, she wasn’t introducing herself to people. So I think there was kind of this general consensus from people we talked to that was like, ‘She’s here to do a hatchet job and get rid of people.’”
Larsen did not immediately respond to a request for comment. Pinkerman, reaching out on her behalf, said DED “experienced dramatic growth following the coronavirus pandemic.”
Pinkerman shared data showing that between 2020 to 2023, the department’s full-time staff grew by about 10-15 people per year. It reached a peak of about 114 filled full-time positions on June 30 of this year, which has since dropped to around 90.
Larsen took over as interim DED director on July 21.
“As DED winds down pandemic-era economic recovery programs and identifies greater operational efficiencies, not all positions that come open are being filled,” Pinkerman said in an email.
Hubly called on the Nebraska Legislature to protect frontline workers when debating budget adjustments this spring, arguing that staff cuts should be the last place state officials look to fill the deficit.
Instead, he proposed searching for new revenue sources or surveying state workers for ways to improve efficiencies.
“It is not possible to continually cut positions and increase workloads on state employees and not affect the quality of the services the employees provide,” Hubly said.
