$10.76 billion

The Legislature sent mid-biennium General Fund budget adjustments to Governor Jim Pillen’s desk for signature this week, with a total of $10.76 billion in spending for the biennium, representing a reduction of $243 million over the biennium, or less than one percent over the previous budget. If all bills on Final Reading and E&R engrossing were to pass, it would still result in a shortfall of $7.1 million, and if bills on Select File and E&R initial pass as well, it would result in a $6.1 million surplus. 

However, the shortfall could reach $645 million for the following biennium based on the most recent projections from the Nebraska Economic Forecasting Advisory Board, which will not meet again until October. There will be at least 12 new members of the Legislature at that time, either due to term limits or declining to run for reelection. Among those not returning in 2027 are 4 members of the Appropriations Committee, including Chair Robert Clements, who is term limited. 

123,000

The One Big Beautiful Bill Act (OBBBA) passed last summer and supported by Nebraska’s Congressional delegation could have potentially severe impacts on the 123,000 Nebraskans served by Community Health Centers (CHCs). According to the Health Center Association of Nebraska, more than 85 sites across the state serve primarily low-income Nebraskans, including more than 40,000 children, 7,500 patients experiencing homelessness, 2,500 agricultural workers, 1,200 veterans and about 2,800 patients requiring obstetric services. 

The Commonwealth Fund, a health policy think tank, estimates that across the nation, Medicaid requirements imposed in OBBBA will result in a loss of coverage for 5.6 million patients who receive services at CHCs. They project a revenue loss for centers at $32 billion, which for many will mean closures or significant staff reductions. As OpenSky previously reported, Governor Jim Pillen announced in December that Nebraska will opt in to these work requirements early, beginning May 1, prior to final guidance coming from the Centers for Medicare and Medicaid Services. 

While Congress did increase federal grant programs for CHCs significantly earlier this year, the grant funding only extends through 2026, which makes it difficult to plan for long-term sustainability and staffing. The centers will also be eligible to receive funding under the Rural Health Transformation Program, but those funds are explicitly prohibited from being used to reimburse services provided by Medicaid. 

$4.6 billion

As many families begin plans for summer travel, the Institute on Taxation and Economic Policy (ITEP) examined the broad landscape of state taxation for tourism activities, including Nebraska. According to the Nebraska Tourism Commission, the travel industry contributes $4.6 billion to the state’s Gross Domestic Product and supports approximately 41,000 jobs statewide. 

Nebraska charges a 1% lodging tax statewide, which is in addition to county-level lodging taxes that can be up to 4%. These surcharges are added to the statewide sales tax of 5.5% and any other local sales tax rates. The state also imposes a 5.75% rental car tax, which combined with sales taxes and local rental car taxes averages 14.27% for a $250 rental for 5 days. Local municipalities are also permitted to levy taxes on prepared foods in restaurants, as is the case in both Omaha and Kearney.

According to ITEP, tourism revenues are best used to stabilize, not replace, other local revenue streams. They advocate for places with lower tourism rates to strive for lower overall sales tax rates to avoid taxing their local residents for tourist activities. They also note that some states implement a seasonal tax rate during peak tourism to ensure that local residents don’t pay an unfair burden. For example, South Dakota’s lodging and amusement taxes are implemented only from June-August.