# Nebraska faces $172M deficit after three months of weak tax receipts  
**Published:** 2026-06-15T22:30:07.000Z  
**Source:** [Nebraska Examiner](https://nebraskaexaminer.com/2026/06/15/nebraskas-projected-budget-deficit-exceeds-170-million-following-new-tax-receipts/)  
**AI-generated:** yes (claude-haiku-4-5-20251001)  
**Canonical:** https://lincolne.news/article/nebraska-faces-172m-deficit-after-three-months-of-weak-tax-receipts

For the third consecutive month, Nebraska's tax receipts fell short of economic projections, threatening the state budget heading into 2027 and potentially requiring lawmakers to address a combined shortfall exceeding $800 million, according to [a report from the Nebraska Examiner](https://nebraskaexaminer.com/2026/06/15/nebraskas-projected-budget-deficit-exceeds-170-million-following-new-tax-receipts/).

The state Department of Revenue reported that May's tax receipts came in 7.8% below the February forecasts from Nebraska's Economic Forecasting Advisory Board, translating to roughly $43 million less in revenue. Combined with shortfalls in March and April, the current biennial budget now faces an expected deficit of approximately $172 million.

The pattern of missed revenue targets follows a grueling 2026 legislative session when lawmakers navigated a projected deficit that peaked at $646 million. Through a combination of spending cuts described by many as painful, legislators managed to leave the state with a projected surplus of about $6 million in April—only to see recent tax data erase that gain.

Individual income taxes have been particularly weak, running 14.5% below forecasts for May and resulting in a $46.4 million loss. Corporate income taxes fell 33% short of projections, costing $3.2 million. The primary culprit, according to State Sen. Rob Clements of Elmwood, chair of the Legislature's Appropriations Committee, has been higher-than-expected tax refunds issued by the Department of Revenue.

The only bright spot came from sales and use taxes, which exceeded projections by 7.1%, generating a $14.7 million gain—the only category to rise above forecasts in May.

State officials have previously noted that [timing issues with tax refunds have contributed to lower revenue reports](https://nebraskaexaminer.com/2026/05/19/higher-tax-refunds-dip-nebraska-revenues-below-forecast-for-second-straight-month/) while not necessarily signaling broader economic weakness. However, the consistent underperformance across multiple months has raised concerns heading into the 2027 legislative session.

Clements said the state is not yet at a crisis point, noting that Nebraska's cash reserve currently stands at approximately $546 million. He argued that lawmakers could theoretically access the entire reserve and still maintain about $330 million in minimum emergency funds.

The true scope of the challenge facing lawmakers won't become clear until Nebraska's Economic Forecasting Advisory Board meets in October to revise its projections for both the current biennial budget and the next two-year spending cycle beginning July 1, 2027. Current estimates project a $631 million deficit for the 2027-2029 biennium.

If a deficit remains when the 2027 legislature convenes in January, lawmakers will face the dual challenge of closing both the current budget shortfall and addressing the projected deficit in the coming biennium—marking the third consecutive legislative session grappling with budget shortfalls.

## Sources

- [Nebraska Examiner](https://nebraskaexaminer.com/2026/06/15/nebraskas-projected-budget-deficit-exceeds-170-million-following-new-tax-receipts/)
- [Nebraska Examiner - Higher tax refunds dip Nebraska revenues below forecast for second straight month](https://nebraskaexaminer.com/2026/05/19/higher-tax-refunds-dip-nebraska-revenues-below-forecast-for-second-straight-month/)

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This article was generated by AI (claude-haiku-4-5-20251001) based on source material from Nebraska Examiner, enriched with 3 web searches. The original source is available at https://nebraskaexaminer.com/2026/06/15/nebraskas-projected-budget-deficit-exceeds-170-million-following-new-tax-receipts/.