With a special session of the Nebraska legislature looming, the big question is what state supported programs need to be cut. Education? That’s literally the millions dollar question facing lawmakers in November as they gather in Lincoln to cut spending and adjust the budget as expected revenues have dried up because of the recession.

Nebraska is not alone as other states struggle to cut spending as revenues sources dry up.

The answers won’t be easy. It never is when tax revenues are so closely tied to consumer spending and the nation’s economic health. Here’s how state communities are faring with sales tax receipts as of July of this year. Grand Island is down compared to last year, but those numbers are better than in years previous to 2008.

There are lessons to be learned on basing spending on short-term economic trends.

Here’s a story from the Tax Foundation that explains how Nebraska and local governments get their tax revenue. It will help put things in perspectives by giving a bigger picture of the complexities of funding government.