LINCOLN, Neb. — OpenSky Policy Institute released a preliminary fiscal analysis in response to Governor Jim Pillen’s announcement that Nebraska would opt in to a private school voucher program created by the One Big Beautiful Bill Act (OBBBA), which was supported by Nebraska’s entire Congressional delegation and signed into law this summer. The program creates “Opportunity Scholarships” with a dollar-for-dollar tax deduction up to $1,700 per year beginning in 2027. This program is the only one in the federal tax code that reimburses charitable giving so generously, surpassing benefits for donations to organizations that support child abuse prevention, food banks, houses of worship, disabled veterans, victims of domestic abuse and more.
“Prioritizing unmitigated spending like this through the tax code is risky, and the administration’s eagerness for Nebraska to participate is perplexing amid well-documented headwinds facing the state,” said Dr. Rebecca Firestone, Executive Director of OpenSky Policy Institute. “Nebraskans care about our young people, but wiser, research-backed options to provide for a brighter future certainly exist that would better serve our state. For instance, expanded Child Tax Credits, maintaining and expanding food security programs, health care access and high-quality public education starting at birth—all have proven benefits. Saddling the next generation with unsustainable debt that will have widespread economic impact runs in stark contrast to the ‘opportunity’ that OBBBA and this scholarship program claim to promote.”
As written, the program has no caps on the number of individuals or joint filers who can claim the tax credit, nor the total amount of tax revenue that can be forgone for this purpose. This could put significant strain on the federal budget, which provides critical funds to states for programs like special education, Medicaid, and food security. In Nebraska, more than a third of the state’s total operating budget comes from federal funds, at about $6 billion.
OBBBA leaves guardrails for the program to the states, with no required transparency, quality control or accountability measures. This creates a wide runway for waste, fraud and abuse. Additionally, Scholarship Granting Organizations are permitted to retain 10% of the donations for their own purposes, with reporting and accountability guardrails entirely optional and determined on a state-by-state basis.
OBBBA, with the Opportunity Scholarship program embedded, is projected by the Congressional Budget Office to increase the deficit by $3.4 trillion over the next decade. The additional interest on that debt is expected to add another $718 billion, bringing the total to $4.1 trillion. The United States will spend more on interest payments on this sum than on any other federal expenditure, skyrocketing to $4.9 billion per day by 2035.
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OpenSky Policy Institute is a nonpartisan 501(c)(3) organization dedicated to using research, strategic communications and coalition-building to advance evidence-based policies that improve economic opportunity for all Nebraskans. For 14 years, the organization has focused on empowering policymakers to make wise fiscal policy decisions, with expertise in taxation, budgeting, educational funding and social safety net policies.
