Nebraska Lawmakers Confront $471 Million Budget Deficit Ahead of Legislative Session
LINCOLN, NE – Nebraska state lawmakers are preparing to address a projected $471 million budget deficit as they convene for a sixty-day legislative session in January. The shortfall, confirmed by the Legislature‘s Tax Rate Review Committee, presents a importent challenge for the state as it navigates competing priorities in funding essential services.
The deficit stems from lowered revenue forecasts and recent tax changes. The Nebraska Economic Forecasting Advisory Board reduced expected state revenues by approximately $367 million over the next two years during its October meeting. While October tax receipts showed a net gain of $311 million – exceeding earlier projections for the month – overall monthly revenues have fallen short of forecasts throughout 2025.
Contributing factors include the gradual reduction of individual and corporate income tax rates approved by the 2023 legislature, which decreased the state’s annual revenue stream. Additionally, the federal “One Big Stunning Bill” is estimated to cost Nebraska around $216 million over the next two years. Lawmakers will now face difficult decisions regarding budget allocations and potential solutions to close the gap, impacting state programs and services for Nebraskans.
