We are down to less than 4 days left in session with a lot of work ahead of us. There are 111 bills on Select File and Final Reading. Ten or more bills need to be amended either on Select File or with a return to Select File from Final Reading to lower the fiscal impact. Just the processing of those bills and amendments could likely take up the time we have remaining. We will be meeting on Day 60 (April 18th) in order to read some bills as well as have time to address any vetoes from Governor Pillen’s office.

Bill Updates
There are two bills that were debated last week that work hand in hand to help with property tax relief and increase school funding.

LB388 introduced by Senator Lou Ann Linehan is a proposal to generate state revenue that would be used to provide additional property tax relief. The additional revenue would fund a companion proposal contained in an amendment to LB1331, introduced by Senator Dave Murman of Glenvil. Senator Linehan said the two proposals–in conjunction with a modified cap on school property taxing authority in the amendment to LB388–would provide more funding to schools at a time when valuations in some urban and some suburban districts are spiking, which reduced their state aid under the school funding formula and forces them to rely more on property taxes. Beginning January 1, 2025, the committee amendment would increase the state sales tax rate from 5.5% to 6.5% unless actual state General Fund net receipts for fiscal year 2023-24 exceed the most recent forecast of net receipts provided by the Nebraska Economic Forecasting Advisory Board by 3.5%. If net receipts exceed the forecast by 3.5%, the state tax commissioner then would set a lower rate, from 6.25% to 5.5%, based on how much state revenue exceeds that threshold. The commissioner would determine the applicable rate on or before July 14, 2024. The amendment would also limit to 3% the amount by which a city, county, or village could increase its property tax request from one year to the next with several exceptions, including a percentage based on real property growth. Senator R. Brad von Gillern of Elkhorn said the proposal is not a dollar-for-dollar tax shift and would result in a “net tax reduction” for many Nebraskans. He said the sales tax increase would not have an outsize effect on low-income Nebraskans because they spend most of their income on essentials, such as groceries and rent, that are not subject to sales tax. The committee amendment would help offset any regressive effects from the sales tax increase by exempting residential utilities from sales tax. Senator Linehan said she was open to amending the proposal on select file to remove the sales tax increase. This bill was advanced to Select File and is still being adjusted to figure out the right way to bring property tax relief to Nebraska. (“Potential sales tax increase, local taxing authority cap advanced”. Unicameral Update. 3 April, 2024. http://update.legislature.ne.gov/?p=36242)

LB1331 introduced by Senator Dave Murman of Glenvil is a proposal that would terminate the Tax Equity and Educational Opportunities Support Act (TEEOSA) and establish a new school funding system. This bill was gutted and replaced with a separate proposal containing provisions of Omaha Senator Justin Wayne’ s LB1231. Senator Murman said it became apparent that establishing a new school funding system was of greater importance this session. This bill is a companion bill to LB388. These two bills aim to generate state revenue to fund additional property tax relief by implementing the Nebraska Education Formula and increasing yearly per student foundation aid from $1,500 to $3,000. The amendment would end the refundable income tax credit against school taxes paid that was created under LB1107 in 2020 and instead “front load” the funds allocated to the credit by increasing foundation aid to public schools. Other provisions of LB1331 include prohibiting school districts from adopting budgets that surpass certain allowable reserve percentages. The percentages would differ based on the district’s average daily membership and the department would be responsible for annually determining and certifying each district’s specific allowable reserve percentage. Senator Linehan supported the bill, saying TEEOSA has long been a problem. She said equalization aid–calculated by subtracting needs from available local property tax revenue–has disproportionately affected rural school districts that contain large amounts of agricultural land. In addition, she said, recent property valuation increases in urban and suburban areas have decreased foundation aid for those districts. LB1331 advanced to Select File. (“School funding changes advanced”. Unicameral Update. 4 April, 2024. http://update.legislature.ne.gov/?p=36253)

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I would like to invite students to the Unicameral Youth Legislature. High school students are invited to take on the role of state senators at the Unicameral Youth Legislature June 9-14. At the State Capitol, student senators will sponsor bills, conduct committee hearings, debate legislation and discover the unique process of the nation’s only unicameral.

The Unicameral Youth Legislature gives behind-the-scenes access to students who have an interest in public office, government, politics, law, public policy, debate or public speaking. Students will learn about the inner workings of the Legislature directly from senators and staff.

The Office of the Clerk of the Nebraska Legislature coordinates the Unicameral Youth Legislature. The University of Nebraska–Lincoln’s 4-H Extension Career and College Readiness Office coordinates housing and recreational activities as part of the Big Red Summer Camps program.

To learn more about the program, go to www.NebraskaLegislature.gov/uyl or call (402) 471-2788. Early registration discounts and scholarships are available. The final registration deadline is May 20.

As always, I invite you to let me know your thoughts, ideas, concerns, or suggestions by calling my office at (402) 471-2716 or emailing me at jalbrecht@leg.ne.gov.