The Legislature officially adjourned Sine Die on Monday, June 2, 2025 (Day 89). It is not uncommon to adjourn early, but there’s a certain amount of risk to passing bills without the chance to override a veto. Every bill passed must be sent to the Governor’s office for his signature. If he chooses to veto a bill passed on the last day, he would do so without any opportunity for the Legislature to override the veto. This year, the Legislature was assured by the Governor that he would not veto any bills scheduled to be heard on Day 89. As a result, we were able to adjourn one day early.

I have been asked many times: How did the session go? Did you make progress on property tax reductions? The session was productive, as measured by the number of bills signed into law, but progress on property tax relief was limited. With the large incoming Freshman class, there were extremes on both sides. The new conservatives had several good ideas regarding property tax relief, but their ideas need some time to develop. The more progressive members of the class were focused on spending bills. If passed, one new Senator’s bills alone would have amounted to over $1 billion in new spending. That is the greatest problem in the Legislature: too many want to spend, rather than give dollars back to taxpayers.

As a refresher, the state’s revenue sources are primarily limited to the 5.5% state portion of sales tax, state income tax, and fees. The state also receives federal dollars, particularly for public welfare programs like Medicaid. The state has no property taxing authority. The budget just passed for the two-year biennium includes total state spending of approximately $11 billion and had to make up for some significant reductions in federal funds. Nearly 25% of this total spending goes to funding K-12 public education. The projected growth in General Fund spending will be limited to 2.8%. So, we have indeed held spending down, but were unable to increase revenue to the extent that significant dollars could be added to the property tax relief fund.

At the local level, the rest of the funding for most public schools comes from property taxes. Cities and counties receive property tax revenue, along with other political subdivisions. Counties also receive funding from inheritance taxes and fees, while cities receive funding from fees and local option sales taxes.

Just as grain farmers are forced to find cost savings and new revenue sources, because they have no choice, we must do the same. The revenues are simply not there. If property taxes are going to go down, we need to spend less, expand our tax base, or increase fees and taxes (either through rates or increasing the number of taxable items/services). If we want to avoid fee and tax increases, political subdivisions must cut spending, not just slow spending. This growth in spending is not sustainable. At the same time, the Legislature should focus on providing state funding for unfunded mandates, exploring mechanisms to limit spending, and identifying inefficiencies. Part of that also includes supporting programs that actually make a difference in growing the economy, and eliminating those that don’t work.

I remain open to listening to anyone who has a better solution, but tag lines like “we need to change our tax system” or “our tax system is broken” are not enough. Part of a viable plan is not just the concept, but a solution that 33 Senators can agree to. That requires a careful balance of interests between a number of groups, including conservatives, progressives, urban, and rural. There is a limited amount of funds available, so ideas for how to raise revenue or cut spending are welcome.

It is a privilege to represent you in the Nebraska Legislature, and I look forward to hearing from you regarding issues that are important to you. I can be reached at 402-471-2729 or by emailing me at mjacobson@leg.ne.gov.