Nebraska Budget Gap Shouldn’t be Closed with Higher Taxes

Nebraska lawmakers are once again looking for ways to raise more revenue rather than addressing the real issue driving the state’s fiscal challenges: spending. Amendment 2406 to LB 901 would impose a series of new fees and penalties on taxpayers, effectively increasing the cost of interacting with the state’s tax system. 

While framed as administrative changes, these provisions function as tax increases. The amendment would require the Nebraska Department of Revenue to add a collection fee of $25 or 10 percent of the tax liability to delinquent tax claims, whichever is greater. It would also impose a similar assessment fee of $25 or 10 percent of the tax liability whenever the department issues an assessment or notice of deficiency. On top of that, the bill creates new filing fees and administrative charges for various tax-related requests and appeals. 

These fees may appear small individually, but together they represent a clear effort to extract additional revenue from Nebraskans through the tax code. Charging taxpayers extra simply to dispute a tax assessment or resolve an issue with the Department of Revenue creates new barriers for individuals and small businesses trying to comply with the law. 

More broadly, proposals like this amount to balancing the state budget on the backs of hardworking Nebraskans rather than doing the difficult but necessary work of addressing wasteful spending. Families and small businesses across the state are already dealing with rising costs and high property taxes. Instead of tightening its own belt, the state is asking taxpayers to pay more simply to patch over a budget gap created by years of ever-growing spending. 

Just as importantly, measures like this do nothing to provide long-term fiscal stability. One-off revenue patches may help close a short-term gap, but they fail to address the structural issues driving the state’s budget pressures. When the next budget cycle arrives and lawmakers face another shortfall, will the solution simply be another round of new fees and taxes? Continually layering temporary fixes onto the tax code is not a sustainable fiscal strategy, and it’s not what Nebraskans deserve. 

If Nebraska lawmakers are concerned about the state’s fiscal outlook, the answer is not to layer new fees and penalties onto taxpayers. State spending has grown dramatically in recent years, and policymakers should focus on bringing that growth under control rather than searching for new ways to collect more money. 

Nebraska’s budget challenges will not be solved by quietly increasing the cost of the state’s tax system. Instead of imposing new fees on taxpayers, lawmakers should prioritize fiscal discipline and address the spending decisions that created the problem in the first place.