$152.4 million
Governor Jim Pillen released his budget proposal last week, which includes a total of $495 million in spending cuts over the next two fiscal years. The largest share of the proposed cuts are from the Department of Health and Human Services (DHHS), to which the Governor proposed $22 million in cuts this fiscal year, followed by $130.4 million next year, totaling $152.4 million.
Significant cuts totaling $14.1 million would impact the state’s Medicaid Aged and Disabled Waiver program, which allows disabled and elderly Nebraskans to remain at home rather than in a skilled nursing or rehabilitation facility. These waivers cover services such as home and vehicle modifications, personal care services for children with disabilities and meal deliveries for seniors.
Individuals losing access to resources that allow them to live in their communities may put significant stress on Nebraska’s already-burdened nursing home and assisted living landscape. According to the Nebraska Health Care Association, 15 Nebraska counties have no such facilities, and closures have been common over the last several years. These facilities also face an uphill battle in years to come due to changes made by H.R. 1, known as the One Big Beautiful Bill Act, which is projected to reduce Medicaid funding by $1 trillion and also restrict the use of provider taxes, which draw down federal funds and create a critical pipeline for long term care reimbursements.
$7 million
Also included in Governor Pillen’s proposed budget is a $7 million earmark for private school scholarships, despite an overwhelming statewide rejection of this concept in 2024. The proposed appropriation appears as a line item in the Department of Labor budget, bypassing the Department of Education and the State Treasurer. This funding would be in addition to the federal income tax incentives that the Governor “cannonballed” Nebraska into this summer.
The proposal comes as the Legislature prepares to navigate a $471 million budget shortfall, which may expand or contract when the Nebraska Economic Forecasting Advisory Board meets in February. It also comes alongside deep cuts not only in DHHS, but a reduction of special education reimbursements by $18 million statewide.
$3.28 billion
An analysis by the University of Nebraska-Lincoln’s Center for Agricultural Profitability estimates that the closure of the Tyson Beef plant in Lexington this week will cost the state $3.28 billion in direct and indirect economic benefit. The plant’s closure is projected to eliminate more than 3,200 jobs, or about half of Lexington’s workforce, with an additional estimated 4,000 job losses in related industries. Senator Teresa Ibach has introduced LB 806, a bill designed to bolster Lexington’s economy. It has not received a hearing date yet.
The report projects state tax revenues will take a significant hit, with annual losses in state personal income tax revenue estimated at over $23 million. State sales tax revenues are projected to decline by over $10 million per year. Local sales tax revenues accruing to Dawson County are expected to fall by $2.77 million dollars per year in the central Nebraska county with a total general fund budget of just over $23 million. The Flatwater Free Press reported on ripple effects of the closure for the town of Lexington, including empty pews in local churches, reductions in school enrollment and economic uncertainty in the local business community as a significant number of Lexington residents have moved for other employment.