With the Revenue Committee quickly advancing multiple tax proposals to be debated by the full Legislature, state lawmakers already have a lot on their plates when it comes to major fiscal issues.

Things will only intensify in the coming week as committee hearings are held on the state budget, the governor’s plan to use American Recovery Plan Act (ARPA) dollars and several major tax and school finance proposals. Below we take a closer look at what lies ahead on the Nebraska fiscal front this week.

Taxes on Monday morning, budget in the afternoon

The top two items on the Legislature’s agenda for Monday are first-round debate on LB 825, which would fully exempt Social Security income for taxation – and LB 723, which would prevent the funding level for the LB 1107 credit from dropping below its current level of $548 million per year. The revenue impact of these measures creates sustainability concerns and could leave Nebraska vulnerable to cuts to schools, health care and other priorities, particularly when the federal relief dollars currently bolstering our economy stop flowing into the state.

The state budget bills – LB 1011, 1012 and 1013 – will be the focus of an Appropriations Committee hearing on Monday afternoon. The proposed budget contains some concerning provisions including significant withdrawals from the state’s cash reserve. While the fund is currently at record levels, maintaining a strong cash reserve will be important moving forward should the state find itself faced with revenue problems once the federal relief dollars stop flowing or we end up having to refund any of those dollars because we use them improperly.

ARPA proposal light on support for individual Nebraskans

LB 1014 – the governor’s plan to distribute $1.04 billion in ARPA funds – will be the focus of Tuesday’s Appropriations Committee hearing. Only about 30% of the funding would be used to help individual Nebraskans, under the proposal. The proposal, however, places considerable emphasis on investing in tourism and water infrastructure.

K-12 finance bills to be heard Tuesday and Wednesday

LB 890 will be the focus of an Education Committee hearing on Tuesday. The proposal calls for a $715 million increase in funding for K-12 education in order to help offset Nebraska’s high reliance on property taxes to fund our schools. LB 891, which is a companion bill to LB 890, will be heard by the Revenue Committee on Wednesday. The bill would make a variety of school finance and tax changes to provide funding for the increased K-12 aid.

Income taxes the focus of Thursday revenue hearings

Several bills related to income tax changes will be heard by the Revenue Committee on Thursday including LB 938 and LB 939, which would reduce income tax rates. LB 938 would ratchet Nebraska’s top corporate income tax rate down to 5.84%. LB 939 would do the same for Nebraska’s personal income tax rates. Both measures would result in large tax cuts for wealthy Nebraskans while dramatically reducing revenue needed to fund schools, roads, health care and other services that are vital to a strong economy.

Another bill that will be heard that day, LB 832, would make several changes to the state’s personal income tax including creating a new bracket that would tax incomes above $1 million for individuals and $2 million for married couples filing jointly at 8.25%.

Nebraska Public Media will stream all legislative debate and hearings live.