Ahead of another looming session of budget cuts, lawmakers pledge to not increase taxes

Four conservative state senators in the officially nonpartisan Nebraska Legislature are making a pledge ahead of the 2026 session to restrain tax increases.

The pledge drafted by senators Bob Andersen, Tanya Storer, Jared Storm and Paul Strommen vows not to not increase the total tax burden on taxpayers and provide “direct and explicit dollar-for-dollar decreases in other taxes, if any tax rate is increased or tax base expanded.”

All four said they would like to see a decrease in state spending and an overall decrease in the size of government.

“We don’t have a revenue issue,” Storm said. “We have a spending problem.”

He said the core group is firmly united in trying to lower taxes and cut spending. Storer pointed to the recent $1.6 billion injected into the state’s budget to offset the property tax burden, yet taxpayers have seen only a $6 million decrease in total property taxes collected.

Analysis by Statehouse Reporter Fred Knapp shows it’s true that total property taxes levied decreased only $6 million from 2023 to 2024 – from $5.308 billion in 2023, to $5.302 billion in 2024. But that does not reflect the fact that by converting what had been a state income tax credit to a property tax credit, the state in effect paid a much larger portion of those property taxes.

In fact, the share of school costs paid by local property taxes decreased from $2.619 billion in 2023-24 to an estimated $2.013 billion in 2024-2025, according to the Nebraska Department of Education.

Of course, that means people aren’t getting the income tax credit they used to get. So, their overall tax burden may not have changed.

Storer said if the government needs to “plug the bottom of the bucket” by implementing a new tax, it would need to be met with the offset of another tax.

“So the overall tax burden on Nebraskans is not increased,” Storer said. “If there’s a proposal for adjustments, the only way that I think the four of us are open to that is if it is a guaranteed decrease in another area of tax in the state.”

But the hole in the bottom of the bucket seems to continue to grow. The group of senators said they wanted to establish this pledge well ahead of the session that’s set to begin in early January, where senators are expected to grapple again with budget cuts. It was one of the last messages Speaker of the Legislature John Arch left with his colleagues.

“I will predict that our biggest challenge next year will be our budget,” Arch said on the final day of the session. “Once again, we sent a balanced budget to the governor, but we always face mid-biennium budget adjustments, and next year will be no different. And in fact, could be more challenging.

Just two months later, Gov. Jim Pillen in July asked state agencies to figure out how they can cut 10% from their budgets in 2026. In an October summit held by the Platte Institute, legislative leaders said it will be another year of “belt-tightening.”

“The patient continues to bleed faster than we’re able to put blood into the patient,” Arch told the crowd. “We have put lots into our tax relief, but the patient continues to bleed faster.”

Just a few weeks ago on Halloween, lawmakers received a spooky revenue projection from the Nebraska Economic Forecasting Advisory Board that showed state revenues projected downward by about $120 million for FY2025-26, and $247 million for FY2026-27. That means the state’s budget shortfall – which was already at $95 million following the recent legislative session – has ballooned to more than $450 million over the current biennium.

There have been discussions in recent legislative sessions about potentially implementing new sales taxes. In January, state senators introduced bills that would impose sales taxes on about two dozen services, ranging from nail care to chartered airplane flights – taxes one state senator deemed as “luxury sales taxes.”

Some state senators and tax policy experts have pointed to the Legislature’s recent large cuts in corporate and state income taxes to blame for some of the state’s revenue shortfall.

Andersen, Storer, Storm and Strommen are hoping that by scaling back some state programs, it may relieve some cost of operations, though the senators did not point to specific programs they would like to reduce.

“Reducing the size of government, I think, is one of the key aspects of this,” said Strommen, who sits on the Legislature’s Appropriations Committee. “As the government grows, more dollars are spent on that, and anything that we can do to get our spending under control, decrease the overall size of government, I think that’s good policy.”

Storm said the cost to run the state government has continued to grow at an unsustainable rate, and that senators need to approach the next session with fiscal restraint.

Spokeswoman Laura Strimple echoed support for the senators’ pledge, saying, “Governor Pillen applauds these senators for their commitment to fix Nebraska’s tax system. We need them and other members of the Legislature to be strong partners to deliver transformative, lasting property tax relief to Nebraskans.”