Bill > LB1124

This bill increases the cigarette tax and changes how the money collected from it is distributed, with the stated intent of using a portion of these funds for Medicaid expenses related to smoking-induced illnesses, which the state currently spends over $120 million annually on. Specifically, the tax on a package of cigarettes containing not more than twenty cigarettes will increase to $1.64, and beginning July 1, 2026, fifty-two cents of this tax will go to the General Fund. The remaining proceeds will be distributed to various funds, including the Nebraska Outdoor Recreation Development Cash Fund, the Health and Human Services Cash Fund, the Building Renewal Allocation Fund, the Nebraska Public Safety Communication System Cash Fund, and importantly, the Nebraska Health Care Cash Fund, which will receive ninety-seven cents of the tax plus an additional $1.25 million, with this ninety-seven-cent portion explicitly designated for Medicaid purposes. The bill also repeals the original section of law it amends and declares an emergency, making it effective upon passage and approval.

Budget and Finance

https://nebraskalegislature.gov/bills/view_bill.php?DocumentID=62815