Senators prepare for budget debate with differing approaches

By Fred Knapp , Senior Reporter/Producer Nebraska Public Media

March 6, 2026, 5 p.m. ·

Nebraska Capitol. (Fred Knapp/Nebraska Public Media News)

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The Nebraska Legislature is headed toward a showdown over balancing the state budget, with senators divided over the right approach to take.

With debate on the budget scheduled to begin Monday, senators spent Friday working on smaller bills and previewing arguments over how to balance the budget.

Sen. Danielle Conrad said spending cuts should be accompanied by delaying or scaling back tax cuts approved by the Legislature in recent years.

“There has to be some sense of balance. The unsustainable, inequitable tax cuts – the Kansas-style tax cuts that we couldn't learn the lesson from our neighbors to the south – we committed ourselves to a course of eviscerating our revenue base to help the wealthiest Nebraskans and the biggest corporations at the expense of everything else. And then that comes on top of billions of dollars in corporate welfare,” Conrad said.

Sen. Jane Raybould reinforced the point, quoting from a 2023 study by the left-leaning Center on Budget and Policy Priorities.

“Lawmakers in states like Iowa, Mississippi, Nebraska and West Virginia that have recently cut their income taxes should harbor no illusions that such a move will stem, let alone reverse, their states' long-standing net out-migration trends,” Raybould said. “If deep tax cuts result in substantial deterioration in education, public safety, parks, roads and other critical services and infrastructure, these states will render themselves less, not more, desirable places to live and raise a family."

That drew a response from Sen. Mike Jacobson, who said he strongly disagreed.

“I don't care what think tank comes up with something and says, ‘Well, people aren't moving out because of this.’ Let's understand that migration runs two ways. We want in-migration. Why would someone select Nebraska to start a business, to move a company here and bring employees here, or try to hire employees here if we have the highest property taxes, the highest state income taxes in the region?” Jacobson asked.

And Jacobson objected to the idea of increasing taxes on higher-income people.

“We always have this idea: ‘We're going to go tax the rich. They're not paying enough. We need to tax them more.’ Well, they didn't get rich by being stupid. Okay? They understand what tax rates impacts have. They understand that part, I'm telling you. We need to have people here in this state that do make money, that are philanthropic, who do pay taxes that support all of the social programs that our state provides,” he said.

The budget proposal that senators will begin debating Monday would go a long way toward reducing – but not eliminating – the budget shortfall that was projected when lawmakers convened in January.

Back then, Nebraska was projected to fall $471.5 million short of what state law requires it to do, which is have a balanced budget that includes a 3% reserve.

The Appropriations Committee has recommended a budget that, through a combination of budget cuts, cash fund transfers, and transfers from the state’s rainy day fund, cuts the budget shortfall to about $125 million.

Appropriations Committee Chair Robert Clements said it’s a good proposal.

“We still have a good amount of cash reserves, and we have not cut agency budgets to where we're going to lose services. We've been asking agencies if the adjustments are reasonable to where they can still operate, and that's been a priority,” Clements said.

What other senators think about the proposal, and what – if any – changes they will make, will be seen starting Monday.