Spending and Revenue Graphics

Nebraska’s General Fund is state government’s primary spending account, funded mostly by sales and income tax revenue. The Legislature's budget debates are centered around the use of this money. Here are the top recipients of Nebraska's General Fund dollars.

Excluding federal funds, Nebraska state government’s two largest sources of revenue are sales & use tax along with income tax.

Notes:

- In the fiscal year ended June 30, 2025, the State of Nebraska received more than 42% of its funding from the federal government in the form of grants and contracts, including for functions such as Medicaid and highway construction.

- In the same fiscal year, the State of Nebraska received over 45% of its funding from various state taxes — primarily income taxes and sales & use taxes.

- Meanwhile, property taxes are assessed and collected at the local level — and are used locally — primarily by K-12 school districts, counties, and cities. State government does not collect or receive property tax revenue.

Nebraska’s General Fund is the state government’s primary spending account, funded largely by sales & income taxes. Here’s a look at recent General Fund expenditures and receipts, as well as transfers out of the General Fund (primarily to offset property taxes collected by local government, including K-12 school districts). These transfers have occurred mostly to pay for the State’s:

- School Property Tax Relief Fund ($750M in 2025) to provide property tax credits for K-12 school taxes;

- Property Tax Credit Fund ($395M in 2025) to provide credits on property owners’ tax statements from local government;

- Education Future Fund ($250M in 2025) to provide K-12 special education and foundation aid; and

- Community College Future Fund ($253.3M in 2025) to provide community college funding.

COMPARISON: In FY 2019-20, the State's property tax relief programs (Property Tax Credit, Personal Property Tax Exemption, and Homestead Exemption) totaled approximately $381.1 million.

Five years later, in FY 2024-25, the State's property tax relief programs (listed above, plus $149 million for the Homestead Exemption) totaled roughly $1.8 billion.

Here's a look at the state government’s General Fund budget for fiscal year 2025-2026.

Notes:

- The General Fund is the state government’s primary spending account, funded mostly by Nebraska’s individual income tax, corporate income tax, and sales tax. The Legislature’s budget debates usually focus on the use of this money.

- This overview does not include the more than $1.7 billion in transfers out of the General Fund, primarily to provide state dollars for relief of locally imposed property taxes. (School Property Tax Relief Fund [$780M]; Property Tax Credit Fund [$422M]; Community College Future Fund [$271.4M]; and Education Future Fund [$242M]).

- General Fund transfers-out have grown from $9,140,000 in fiscal year 2005-2006 to $1,716,356,476 in fiscal year 2025-2026.

This is an overview of the State of Nebraska's General Fund obligations (including transfers out to cash funds).

Notes:

- The General Fund is the state government's primary spending account, funded mostly by Nebraska's individual income tax, corporate income tax, and sales tax. The Legislature's budget debates usually focus on the use of this money.

- This chart displays General Fund obligations by major category when state appropriations are combined with transfers out to cash funds.

- For Fiscal Year 2026-27, the total for General Fund appropriations plus transfers to cash funds is $7.07 billion.

Here is the revenue collected from Nebraska’s sales-and-use taxes over the past 11 fiscal years.

Notes:

- Nebraska’s state government imposes a 5.5% sales-and-use tax.

- Nebraska municipalities and counties may impose an additional local sales-and-use tax, resulting in a maximum combined sales tax rate of 7.5%, depending on location.

- The sales-and-use tax is one of Nebraska state government's largest sources of revenue, along with individual and corporate income taxes.

Here’s the property tax revenue collected by local governments throughout Nebraska over the past 10 fiscal years.

Notes:

- Property taxes are assessed, collected, and spent at the local level. Property tax revenue primarily funds K-12 school districts, counties, and municipalities, as well as Natural Resources Districts (NRDs), Educational Service Units (ESUs), and other local government entities.

- State government does not collect or receive property tax revenue.

- This overview does not include state government spending on initiatives aimed at providing relief from property taxes. In fiscal year 2025-26, more than $1.7 billion in state funds is expected to be spent to help reduce the local property tax burden: School Property Tax Relief Fund ($780M); Property Tax Credit Fund ($422M); Community College Future Fund ($271.4M); and Education Future Fund ($242M).

Here is the revenue collected from Nebraska’s income taxes over the past 11 fiscal years.

Notes:

- Nebraska state government collects both individual and corporate income taxes. Nebraska has no local income taxes.

- In 2026, the top individual and corporate income tax rate is 4.55%. Under current law, the top rate is scheduled to decrease to 3.99% in 2027.

- Individual and corporate income taxes are among Nebraska state government's largest sources of revenue, along with sales-and-use taxes.

Proceeds from the Nebraska Lottery help fund programs related to the environment, education, the Nebraska State Fair, and compulsive gamblers assistance. Here's a look at Nebraska Lottery revenues and beneficiary distributions since FY 2013-14.

Notes:

- Approximately 25 cents of every dollar spent on Nebraska Lottery tickets goes directly to state beneficiaries, according to the Nebraska Lottery.

- The Nebraska Lottery recently surpassed $1 billion in beneficiary transfers since its inception in 1993.

- Lottery revenues are deposited into the State Lottery Operations Trust Fund, which is used to pay lottery prizes, fund lottery operations, and make beneficiary distributions.