We have reached Day 89, and Speaker Arch announced it will be the last day of session. On Day 89, we will deal with housekeeping items and wrap up four Final Reading bills that do not have a veto risk from the Governor. Constitutionally, a bill that passes Select File must lay over for at least one session day prior to getting scheduled for Final Reading. The Governor then has five days from receiving a bill passed by the Legislature to veto the bill. For that reason, there are only four bills scheduled for final consideration on the last day of the session, plus any veto overrides needed for bills passed in the prior week.

I will spend the weeks going forward recapping some of the specific bills passed this session, but for now, I want to give you my take on how the session went. Compared to the 2023 session, it went very well, but it became clear many of the progressives in the body had decided to resist any tax shifts and force the conservatives to be seen as tax and fee raisers. The fact remains that there are limited natural revenue increases that can be captured in any one year. Additionally, the federal government has made significant cuts in aid to states this year. As a result, the Governor asked the Appropriations Committee to sweep any unnecessary funds in agency cash accounts to meet our spending obligations, including tax relief commitments.

After passing the budget, the Legislature heard LB169, which included much of LB170. The combined bill would have raised “sin” taxes on cigarettes to match Iowa and doubled the vape products tax. It also would have removed the existing sales tax exemption on several services, including high-end services such as chartered jet flights, pool cleaning, and landscaping. The measure would have also taxed “soda” (taxed today if they are fountain drinks) and “candy.” The ultimate use for the approximate $100 million in annual new revenue would have been property tax relief.

Unfortunately, this bill did not pass due to a few conservatives and most progressives in the body.

Some were opposed because they called it a tax shift (they are exactly right), but we have been shifting to a higher reliance on property taxes for many years. If the state underfunds education, property taxes go up.

If we truly want property tax relief, we need to spend less at all levels of government. If local property tax budgets are exceeding the rate of inflation, taxes will go up. If we attempt to freeze property valuations, mill levies increase. In the end, controlling spending is the best fix.

Education of K-12 students is a Constitutional responsibility of the state. Over the years, attempts to raise more sales tax revenue to fund education have met with resistance from urban schools, which like the current system. Most urban schools receive TEEOSA funding and have costs per pupil around $10,000 per student. Many small schools have funding costs closer to $30,000 to $45,000 per student. This is caused by lower student numbers with limited opportunities to find other funding sources. Consolidation could be one solution, but a significant disparity in school mill levies limits voluntary consolidation. That is what limits greater progress in this area.

Property taxes remain a significant problem because it is hard to get the buy-in of all the parties involved. Competing interests and priorities are echoed in the Legislature, which makes it challenging to find consensus that is radical enough to make a real difference.

It has been a pleasure serving as your State Senator during the 2025 Legislative Session. I have enjoyed the challenge and will continue to do my best to serve the interests of District 42.

As we head into the interim, please continue to reach out regarding issues that are important to you. I can be reached at 402-471-2729 or by emailing me at mjacobson@leg.ne.gov.