SENATOR JACOBSEN: ‘HOW TO DEAL WITH THE $400 MILLION DOLLAR PROJECTED BUDGET DEFICIT’

SENATOR JACOBSEN WEEKLY COLUMN - Nebraska faces a tough challenge this legislative session: balancing a budget with a projected $400 million deficit. 

Many ideas have been suggested to address the shortfall, including delaying the final income tax reduction and redirecting funds from the Perkins County Canal project, but these are not viable solutions. Lawmakers must find a combination of revenue measures and spending cuts that can gain support from at least 33 of 49 senators. Proposals to expand the sales tax base have so far failed, meaning difficult decisions on spending—including agency budgets and tax relief—will be necessary.

Income and property taxes in Nebraska remain high compared to neighboring states, pushing some residents to relocate to avoid taxes. Ensuring tax competitiveness is essential to retain current residents and attract new ones, rather than incentivizing people to leave after decades in the state. Attempts to tax the wealthy often fail because those with resources can legally avoid taxes, underscoring the need for broader fiscal strategies.

Property taxes also continue to rise unsustainably, especially affecting retirees. While the state has tried to reduce local reliance on property taxes and provide credits or subsidies, the impact on actual tax relief has been limited. Nebraska must find more effective ways to balance the budget without forcing residents out or undermining the state’s competitiveness.

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