$363 million
Assuming all remaining bills are passed on final reading and no vetoes, the state is projected to end FY 25 with $363 million in general funds above the state’s minimum reserve. Yet there are warning signs ahead on navigating the state budget.
Rather than invest surplus funds in state priorities, policymakers elected to hold them back to pay for income tax cuts passed last year that will continue to grow in cost, reducing state revenues by nearly $3.1 billion over the next five years while the benefits of those tax cuts are targeted predominantly to corporations and the wealthiest Nebraskans.
With tax cuts factored in, the $363 million surplus in general funds above the state’s minimum reserve is projected to sink to a $143 million deficit over the next budget biennium ending in FY 27.
Check out the latest General Fund Financial Status
Read OpenSky’s latest budget primer
121,000
The tax package advanced to final-round consideration next week (LB 388) would raise taxes on some goods and services, including pop and candy, lottery tickets, dry cleaning, pet grooming, cigarettes and vaping products and digital advertising.
The tax package also expands the state-level Earned Income Tax Credit for the first time since enactment for tax year 2007. If passed, the state EITC would grow from 10% to 15% in tax year 2025.
Low-paid workers calculate their state EITC as a percentage of the federal credit. An estimated 121,000 households in Nebraska would benefit from a state-level expansion, providing additional income to address poverty, improve health outcomes and educational achievement and boost local and state economies.
Learn more on Earned Income Tax Credit
Number crunching
- 3: Days remaining to file your state and local income taxes. Tax Day is April 15.
- 23: If you paid $1 or more in federal taxes, you paid more than the 23 corporations which paid zero federal tax between 2018 and 2022 despite being profitable in every single year.
- 30%: If you own property in Nebraska, remember to claim the state income tax credit on property taxes paid to local school districts and community colleges. For school district taxes paid, the credit is 30% for tax year 2023.
- $3,041,520,889: In FY 23, individual state income taxes contributed $3 billion to help pay for education, health care, infrastructure, public safety and other important priorities for all Nebraskans.
152
With a revenue cap in place and inflation outpacing state appropriations, since 2021 152 school districts in Wisconsin have gone to their voters to ask for tax levy increases to fund day-to-day operations. In the most recent spring election, voters approved 56 of 93 requests.
Wisconsin school districts said that they needed the additional funds to maintain class sizes, sustain art, music and physical education programs and retain high-quality teachers.
New revenue caps placed on Nebraska school districts last year would be extended to cities and counties under LB 388, a bill advanced to final reading. The revenue caps on cities and counties would generally limit increases in property tax requests to 3% with adjustments for real property valuation growth, inflation, emergencies threatening public health or safety and pay increases for understaffed departments of police, fire and corrections.