LINCOLN — Nebraska's projected $432 million budget deficit diminished Friday with a more optimistic economic forecast — but lawmakers still face some budgetary challenges.

The Nebraska Economic Forecasting Advisory Board projected slight growth in revenues through June 30, 2027, which includes the next two-year state budget period. Overall, the board predicted an additional $165 million in tax revenue within that time. If accurate, that would reduce the state's deficit to approximately $267 million.

The board forecasted state tax revenues of $6.4 billion for the current fiscal year, which is $100 million higher than the previous projections in October. For the upcoming budget cycle beginning on July 1, the board projected revenues at about $7 billion for the first year and a little more than $7 billion for the second year, marking a $65 million increase from past projections.

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