Proposed Budget Highlights
The governor’s proposed adjustments focus on reforming property taxes, providing various tax incentives to attract and retain talent for the workforce, and making adjustments and transfers to the general fund and the cash reserve fund. Recommendations include the following:
Property Tax Reform
- Reduces property taxes by 40 percent and reduces the amount collected annually from $5 billion to just under $3 billion. Proposed policy changes include:
- A 0 percent hard cap on property tax growth by local governments, with an allowance based on real growth and a vote of the people in an election year.
- Repurposing the existing retrospective individual income tax credits and front-load them resulting in a reduction of nearly $750 million in annual property taxes.
- Update the ImagiNE Nebraska Act to enhance and improve tax incentives in the state.
Attracting and Retaining Talent
- Directs $5 million to incentivize Nebraska businesses to recruit out of state workers.
- Allocates $5 million for the Pioneer Tax Credit to provide tax credits to entrepreneurs looking to get their business ideas off the ground.
- Provides a tax credit on income earned by serving full or part time in the Nebraska National Guard.
Budget Adjustments and Transfers
- Allocates $87.3 million in American Rescue Plan Act (ARPA) funding to the Department of Transportation to bolster highway construction and asset preservation projects.
- Transfers $252.9 million from multiple state agency cash funds to the general fund.
- Recommends transfers and adjustments of $67 million to bolster the cash reserve fund.