$289 million

Nebraska will be looking to find additional Medicaid funding in the coming biennium, totaling $90.3 million, which will make balancing the state’s budget shortfall more difficult. The news comes after positive developments from last week’s forecasting board meeting. 

The additional funding needed for the coming budget cycle is due to revisions in Nebraska’s Federal Medical Assistance Percentage (FMAP). The FMAP is the federal contribution rate for the state’s Medicaid expenditures, which fluctuates based on how well the economy is doing relative to other states. Nebraska’s economy is strong, so the FMAP reflects the state’s purported ability to pick up a larger share of Medicaid spending.  

The result of this change is a larger shortfall for the Appropriations Committee, and ultimately the Legislature, to navigate in the upcoming biennium budget. With the shortfall now at $289 million, the Committee will look to increased revenues, cuts to programs, cash transfers (including from the state’s rainy day fund) or a combination of the three to maintain their Constitutional obligation to balance the budget. The next major development will come on legislative day 70 when the Committee’s final budget report is due for review by the full legislative body. 

$27 billion

We previously shared an update on the Trump administration’s tariffs on steel and aluminum products and the potential effects for Nebraska’s economy. The administration announced an update this week that beginning Tuesday, 25% tariffs would be imposed on all imports from Canada and Mexico, and additional 10% tariffs on imports from China. This boosts the previously-announced 10% tariff on Chinese goods. The future of the entire tariff strategy remains unknown as just a few days after they were implemented, the administration announced a 30-day pause for tariffs on goods imported from Mexico and Canada. 

This is not a new strategy for President Trump, as similar tariffs were implemented during his first term, resulting in retaliatory tariffs from Canada, China, the European Union (including the United Kingdom), India, Mexico and Turkey. These tariffs included a wide variety of agricultural and food products, including principal crops grown by Nebraska farmers, namely soybeans, according to the United States Department of Agriculture. Their report determined the total loss to the agricultural industry due to retaliatory tariffs to be $27 billion (or annualized losses of $13.2 billion) in U.S. agricultural exports, with Nebraska being among the top 10 most severely impacted states at #6. The Nebraska Farm Bureau estimates that Nebraska’s agricultural producers lost $943 million in revenues in 2019 as a direct result of retaliatory tariffs. 

The President, as well as U.S. Senator Pete Ricketts, have pledged to make ag producers whole should the tariffs affect their bottom line. Last term, Trump tapped a fund within USDA, Commodity Credit Corporation, for $28 billion in farm subsidies during the previous term trade wars, but that fund is now running low, according to reports by Politico. They report that it will be left with about $4 billion after upcoming payments, with limited options for regenerating the fund amid aggressive spending cuts prioritized by Congress. 

15%

Governor Jim Pillen announced last week that the Environmental Protection Agency (EPA) has confirmed its intent to uphold the current April 28, 2025 implementation date for year-round access to E15, a 15% ethanol fuel blend, in Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin. Sales are restricted seasonally elsewhere in the country by the EPA over air quality concerns. In those states, a 10% blend is typically available, though industry groups have long advocated for the higher blend. The gasoline additive consumes about 40% of America’s corn crop annually, and each percentage point of higher ethanol blend nationally equates to about 1.4 billion gallons. 

21%

The Thrifty Food Plan (TFP), which provides the basis of Supplemental Nutrition Assistance Program (SNAP) benefit allotments, has been a consistent mechanism proposed to achieve $150 billion in SNAP cuts outlined by the recently-adopted House Republican budget resolution. The TFP represents the actual minimum cost for a nutritionally adequate diet and serves as the basis for SNAP benefit calculations. The USDA revised the TFP in 2021 in response to the 2018 Farm Bill, in order to better reflect changing food prices, food consumption patterns and dietary guidance. Prior to this revision, according to the Center on Budget and Policy Priorities, the TFP’s cost had been adjusted only for inflation. 

According to a USDA report, the TFP update resulted in an average benefit increase of about $1.20 per person per day. With the adjustment, SNAP benefits still average only $6.20 per person per day in 2025. The updated benefit levels lifted more than 2 million SNAP participants above the poverty line when it took effect, with the greatest poverty-reducing impact for Black and Hispanic individuals.

The USDA indicates that Nebraskans benefited significantly from the TFP revision, bringing in an additional $87 million to the state in SNAP benefits. There are economic benefits to the state as well, with 1,290 authorized retailers in Nebraska, ranging from farmer’s markets and butchers to national chain superstores, that redeemed roughly $222 million in benefits in 2019. The Urban Institute outlines potential effects of reverting to the pre-2021 plan, which would include a modestly priced meal costing 54% more than the maximum SNAP benefit on average in Nebraska, with some counties climbing as high as 72% more.