Legislative Session Set for Fiscal Restraint Amid Property Tax Concerns
Amid ongoing fiscal challenges, Nebraska state senators are gearing up for a legislative session focused on budget balancing and reducing property taxes, all while federal revenue diminishes. Discussions at the Platte Institute’s Annual Legislative Summit on Thursday highlighted the financial hurdles ahead.
Nebraska’s property tax ranking remains a concern as the state was placed 46th for property taxes in the 2026 State Tax Competitiveness Index from the Tax Foundation. However, thanks to higher corporate and sales tax rankings, the state secured the 22nd position overall. In contrast, neighboring states Wyoming and South Dakota lead the index.
Speaker of the Legislature John Arch used a medical analogy to describe the ongoing struggles of property taxpayers in Nebraska. “The patient continues to bleed faster than we’re able to put blood into the patient, and that’s where we are,” he remarked, emphasizing the difficulty in alleviating the tax burden despite state efforts.
Arch noted the need for an additional $250 million in annual revenue merely to sustain current property tax levels. Despite such challenges, he assured that the state’s financial health is stronger than perceived: “The state of Nebraska is not broke,” he stated, highlighting the presence of reserves and a rainy-day fund.
The financial outlook was further impacted by a report from the Nebraska Department of Revenue, revealing that the One Big Beautiful Bill Act could deplete state revenue by nearly $217 million over the next two years.
Appropriations Committee Chair Rob Clements, entering his 10th year of service, emphasized the importance of balancing the budget without raising taxes. “We’re going to need to continue to watch our spending and find cost savings and efficiencies to balance the budget, so that we can have a big, beautiful budget,” he said, eliciting light-hearted laughter from attendees. He remains optimistic about the future, expecting state revenues to recover by 2027.
Clements also reaffirmed his commitment to eliminating the inheritance tax, a legislative effort that previously stalled in 2025.
Revenue Committee Chair Brad von Gillern cautioned about the potential economic repercussions of aggressive budget cuts. “We got to make sure that we don’t just take out a machete and start cutting through things, just because they’re the easy things to do,” he advised. Von Gillern supports maintaining recent income tax cuts to avoid stifling economic growth and discouraging migration to the state.
As Nebraska’s financial strategies unfold, the Nebraska Forecasting Advisory Board is set to meet on Friday to project future state tax revenue, which will be crucial for legislative budget planning.
