Last Friday marked the end of Day 8. The first week focused on electing our leadership and the chair of the Committee on Committees. From there, committee assignments were determined and the first of the bills for this session were filed. Last week, the standing committees elected their vice-chairs, which are elected at the committee level rather than the entire body. I was fortunate to be elected Vice Chair of the Revenue Committee. I look forward to working with Senator Brad von Gillern, who chairs the committee, to make progress on fixing our broken tax system.

I have gotten several questions regarding the current projected revenue shortfall of over $430 million as we enter this biennium. The shortfall is based on a significant projected revenue decline anticipated by the Revenue Forecasting Board. However, their December projection increased revenues by approximately $200 million, cutting the shortfall by nearly half.

I was part of a small group of Senators who had an early look at the Governor’s budget and discussed his plan to remove any shortfalls. The plan focuses primarily on cutting state spending and repealing some of the spending bills passed in 2023 and 2024. In the end, the Governor’s proposed budget would reduce state spending by half a percent as opposed to the normal 2-3% increase. On a $5.5 billion state budget, this adds up to real money. Of course, these budget recommendations are subject to modification by the Appropriations Committee and, ultimately, the full Legislature.

On Thursday, the Rules Committee held hearings all afternoon to allow the public to weigh in on 24 proposed rule changes. It is important to remember that rule changes are very hard to make because there is no limit to debate if a proposed rule change is voted to the floor. In 2017, the Legislature spent the first 30 legislative days debating changes to the filibuster rule. In the end, the attempt failed and the Legislature moved on to other business. There are some proposed rule changes this year that seem to have broad support. Those rules could see traction on the floor if they are voted out of committee.

One of the proposed rule changes would change the filibuster rule again. Today it takes 33 votes to pass a cloture motion to end debate. More importantly, it takes 17 “no” or abstaining votes to defeat a cloture vote. The third caucus has 16 Senators, the first caucus has 16 Senators, and the Second caucus has 17 Senators. Lowering the threshold to end debate would require even more members to stop a bill from progressing. All too often, the focus is on stopping the minority party from holding up legislation, but the minority could also be urban vs rural. A former Senator once told me, “Be careful what you wish for.” I have never forgotten that. I am skeptical when it comes to making changes to this rule.

The urban/rural divide often becomes very apparent when we’re talking about Nebraska’s tax structure. As we focus on ways to reduce property taxes, there have been several ideas expressed over the years. This year Senator Hardin re-introduced the EPIC tax. As many of you know, I am not a fan of EPIC because the plan would send all taxes to Lincoln and the Legislature would decide how the funds are divided. When you consider who controls the votes in Lincoln, how comfortable are you that enough funding would be appropriated to rural Nebraska?

Senator Kathleen Kauth also introduced LR12CA, a constitutional amendment that would change how property taxes are assessed. The problem I see with the proposal is that it eliminates the lower valuation for agricultural land (currently at 75% of market value) and simply caps taxes at 1.5% of the present market value. If passed, this would be horrible for farmers and ranchers because it would compound the property tax problem for owners of agricultural land. The imbalance of values and the tax burden on agricultural land has been far out of balance. The gap has worsened as more and more investors have jumped into the market. We can’t forget these unintended consequences when crafting tax policy.

I look forward to continuing to hear from you about issues that are important to you. It is a privilege to serve as your State Senator, and I will continue to give my full effort to make a positive difference for the District and the State. You can reach me at mjacobson@leg.ne.gov or 402-471-2729.