$8 million

The newly-combined Nebraska Department of Water, Energy and Environment (NDWEE) has requested an $8 million transfer from the Nebraska Environmental Trust in their mid-budget requests, which will be evaluated as the Legislature crafts an amendment package to the biennial budget. Of the total sum, $6 million would be used for soil and water conservation projects and an additional $2 million for administrative salaries and benefits, according to reporting by the Nebraska Examiner. 

The Nebraska Environmental Trust, funded by proceeds from the Nebraska lottery, uses a competitive grant process to “conserve, enhance and restore the natural environments of Nebraska.” According to the organization’s 2025 annual report, recent grants have included projects like invasive weed mitigation, animal habitat restoration, recycling and tree planting. The trust currently holds more than $70 million, some of which is already granted to multi-year projects. Objections have been raised about whether Trust funds can legally be used for state operating expenses, not the first time citizens have taken issue with what they saw as misuse of funds. In 2020, Nebraskans won a legal challenge against a $1.8 million grant from the Trust to install ethanol blender pumps at gas stations. 

This request follows a recent trend by state agencies and the Nebraska Legislature of funding budget gaps by sweeping cash funds established for specific purposes. Concerns remain as to the long-term sustainability of this strategy, as cash funds are finite resources and often contribute to projects designed to enhance quality of life in the state, a critical element for broadening the tax base by attracting new residents. 

$218,529,075

In late December, the Centers for Medicare and Medicaid Services (CMS) announced the state awards funded by the $50 billion Rural Health Transformation Program, established as part of H.R. 1, known as the One Big Beautiful Bill Act. H.R. 1  included an estimated $911 billion in federal Medicaid spending reductions over ten years, including an estimated $137 billion in rural areas. Each state submitted applications for the funding, which will be awarded over the next 5 years and administered by a new Office of Rural Health Transformation. Half of the funds are distributed equally among states, regardless of population, and the other half awarded at CMS discretion based on factors like land area and rural population percentage. 

Nebraska was awarded more than $218 million in the first year, the 8th largest award in the nation. That equates to approximately $280 per rural resident, according to analysis by KFF, a health policy think tank. Abstracts of the grant program published by CMS indicated that Nebraska will direct funds to obesity reduction programs, access enhancement, workforce development, mobile clinics, rural emergency behavioral health and assisted living facility grants for high acuity patients. KFF estimates that the impact of Medicaid changes in H.R. 1 will reduce funding to Nebraska by $3 billion over the next 10 years, approximately $300 million annually. 

$380 million

Good Jobs First, a nonprofit economic policy think tank, recently published a report detailing the impact of economic development tax abatements, particularly tax increment financing (TIF), on Saint Louis Public Schools. They calculate that TIF has cost students more than $380 million in the past eight years and these losses have grown significantly over time. In FY2024, tax abatements cost these schools almost $70 million, a $14 million increase over FY2023. Students enrolled in St. Louis Public Schools, an urban district, lose by far the most in the study at $2,360 per student per year. Suburban districts, in contrast, fared much better, with 10 losing less than $80 per year. The divide follows sharp lines against other demographics as well, with Black students seeing an $859 loss to abatements vs. their white peers at $249. Students who qualify for free and reduced lunch saw an $859 per pupil impact vs. their peers who do not qualify, at $216.

Good Jobs First points to potential problems arising from the proliferation of data centers and subsequent subsidies. Data centers have largely increased in demand as artificial intelligence ramps up, and they require enormous capital investment. As a result, they have large taxable values, but typically are only enticed to locality by long-term tax abatements. In Nebraska, nearly 12% of the total electricity consumed by the state was used by data centers in 2023, but that percentage is expected to reach 18% by 2030. Data centers also require large standby power generators, typically powered by diesel engines or methane turbines, both of which have the potential to cause environmental health issues, especially in low income communities. Good Jobs First posits that without additional protections for school revenues, data center subsidies could deepen inequities in school funding while bringing a whole host of other negative externalities to communities. 

Researchers flagged the same trends for Nebraska school districts, noting that TIF is positively associated with property values in low poverty districts, but in the highest poverty districts, property values either remain unchanged or show negative associations. Nebraska is currently home to 39 data centers, highly concentrated in the Omaha metropolitan area. TIF is a widely used economic development tool with rapid expansion, noted in a report by Auditor of Public Accounts Mike Foley in an advisory letter to the Nebraska Legislature. Auditor Foley raised concerns about the sustainability of the program and potential lack of oversight across the state.