LINCOLN — Within the last two years, the outlook of Nebraska’s financial health has taken a U-turn from having a near $2 billion surplus to now facing a structural deficit that could last years. Lawmakers are in the midst of debating proposed budget adjustments to fill a projected deficit that grew to $646 million. Last year, the Legislature formed the two-year budget and filled a separate deficit.

Combining both years, lawmakers will have dealt with a total shortfall of well over $1 billion this budget cycle, using mostly cash fund sweeps and spending cuts.

Budget observers in Nebraska identified a pair of major contributors to the problem — increased spending on property tax relief eating state dollars and income tax cuts reducing the revenues the state collects.

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