The Business Innovation Act, a key support program for Nebraska entrepreneurship that unexpectedly was paused in October, will begin awarding funds again, according to a memorandum from Gov. Jim Pillen on Dec. 22. 

The governor will also recommend a funding increase to $15 million, up from the roughly $12 million approved in the 2025 legislative session after Pillen attempted to cut the program.

Monday’s move follows a variety of public and private lobbying efforts from startup founders, chambers of commerce and other business leaders to restore the BIA. The push came as the state is grappling with brain drain and a job and wage growth crisis.

“This just shows the quick action of the community to really step up, to show both the Governor’s Office, but just broadly the wider community, the impact that this program has made,” said Laurel Oetken, vice president of operations at Open Range, a backbone organization for the Nebraska startup ecosystem. 

“I think when Nebraskans come together and make their voices heard, this is a great testament of (the) positive output that can happen,” she said.

Research shows that the Business Innovation Act, passed in 2011, has been an outsized success for the state. Businesses supported by BIA programs have generated almost $16 in revenue for every one dollar of state investment. 

Those businesses have also created almost 2,400 direct jobs, while making a $1.17 billion annual economic impact. That supports roughly 5,000 total jobs and generates $27 million in annual state and local tax revenue. 

“Governor Pillen took counsel and input from a wide array of stakeholders, from private sector businesses, to chamber of commerce officials, to gathering additional analysis and research from within state government,” said Laura Strimple, Pillen’s communications director, in an emailed statement. “The result of that process was a need to strengthen the program.”

Said Maureen Larsen, director of the Nebraska Department of Economic Development: “Nebraska is a great place for entrepreneurs to start and build their businesses … DED fully supports the Governor’s decision to resume BIA programs and to strengthen them through increased funding. The Good Life is open for business!”

A battle won, but still an unclear future

Despite the positive news, the memorandum also includes a “new direction” for the BIA that, in ostensibly securing the future of the program, still leaves questions and uncertainty for the startup community.

Pillen has instructed the Nebraska Department of Economic Development, which administers the BIA, to create a plan for offloading as much of the program’s funding to private vendors as possible.

DED should “allocate the maximum possible portion of funds appropriated to it for BIA activities to contracted private sector partner(s) which can more efficiently and cost-effectively administer such funds,” the memorandum said.

This should “reduce the state government resources currently devoted to such administration directly out of DED,” it said.

Invest Nebraska, a nonprofit already contracted with the state to invest some BIA funding in local startups, is named as one potential private vendor. Dan Hoffman, Invest Nebraska’s CEO, had not had time to read Pillen’s memorandum but appreciated the mention.

“It just seems the Governor’s Office acknowledges the job Invest Nebraska has done,” he said. Hoffman said he had not talked with the Governor’s Office about potentially increasing Invest Nebraska’s role.

Hoffman was asked by Silicon Prairie News if Invest Nebraska would be able to administer parts of the BIA. “We want to work with the (DED) and the Governor’s Office on whatever that looks like to assist, but obviously it’s going to require some legislative changes, so we’d have to discuss what that looks like,” he said.

Asked by Silicon Prairie News about instructions for DED to offload the BIA’s funding and operations, the Governor’s Office pushed back.

“The premise of the question is flawed,” Strimple said. “We are not ‘offloading’ administration … The Invest Nebraska partnership already exists, and the Governor has now received hard data that it is a major success. He is directing an increase in that partnership, not the creation of something new.”

Invest Nebraska’s involvement was welcomed by business leaders. “We are grateful to Governor Pillen for his decision to significantly increase funding for the Business Innovation Act and to strengthen its alignment with Invest Nebraska,” said Heath Mello, CEO of the Greater Omaha Chamber, in a press release.

“This is a smart, forward-looking decision that reinforces Nebraska’s competitiveness and sends a strong signal that our state is serious about growing the next generation of innovative companies,” Mello said.

But this new direction could signal a further downsizing of the DED at a time when leaders say the state needs strong economic development. The department has already cut over 20 staff, and other programs could also be offloaded.

“I do worry that we’re decreasing what DED does,” said Mike Cassling, chairman of the Aksarben Foundation Board of Governors. “We’re decreasing the funding to DED at a time when we need to grow — which BIA does, but we need to grow beyond just the startups … we need to grow primary jobs in the corporations across the state. Now is the time we should be doubling down on DED versus trying to move stuff off of it.”

Increased funding with a catch

Another unknown is the proposed increase in funding for the BIA that Pillen will request from the Nebraska Legislature. The state budget administrator is told to “source such appropriations to reduce reliance on the General Fund to the minimum extent possible beginning in FY 2026-2027,” the memorandum said. The ask of $15 million will be kept for the 2027-2029 budget recommendations.

But where that extra money will come from is not clear. “Those are some of my questions of, where does the additional $3 million come from?” said State Sen. Ashlei Spivey, who represents Legislative District 13, which covers part of North Omaha. 

“Especially when the governor (has) cut the BIA and has made promises to continue to cut, and I think we are still in a crisis with the DED that needs to be addressed,” she said. “There is a lack of transparency and deliberate communication around economic development.”

At the moment, the BIA is funded almost entirely from the state’s general fund. Meanwhile, the state is facing a nearly $500 million budget deficit. 

Several departments have proposed sweeping cash from accounts for specific programs back into the general fund, according to mid-biennium budget requests. These factors might leave few options for BIA funding outside of the general fund as Pillen pursues balancing the state budget and property tax relief. 

Asked by Silicon Prairie News where Pillen anticipated getting funding for the BIA, Strimple said the Workforce Development Program cash fund under the Department of Labor.

How successful Pillen’s plan is, and how the changes will affect the BIA, remain to be seen. For the moment, advocates are happy with the lobbying success and hope it signals a more proactive economic development approach from the governor. Spivey noted that 2026 is an election year, and Republican Charles Herbster is signaling interest in a gubernatorial run.

“We know that a key challenger has been doubling down on economic development as a missed opportunity (from) this current administration, and so it feels like this is very timely for the election and what’s in front of him, and I hope it’s genuine,” Spivey said.

“I hope that Gov. Pillen absolutely understands the frustration that pausing that (the BIA) caused,” she said. “The cuts to economic development programs overall are stifling our economy, and we can choose a different path that not only addresses the importance of strategic and intentional economic development now, but for the future of Nebraska.”

Lev Gringauz is a Report for America corps member who writes about corporate innovation and workforce development for Silicon Prairie News.