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Nebraska governor touts ‘historically conservative budget,' wins
Nebraska Gov. Jim Pillen, center, greets State Sen. Dave Murman of Glenvil on the final day of the 2025 legislative session. June 2, 2025. (Zach Wendling/Nebraska Examiner) LINCOLN — Nebraska Gov. Jim Pillen, in his end of session speech to state lawmakers, called the state budget 'historically conservative.' Pillen portrayed the session as 'positive,' highlighting the passage of some of his priorities this session, including limiting high school and college sports participation to sex at birth, banning lab-grown meat, prohibiting cell phones in schools and a merger of the state's agencies in charge of overseeing water quality and quantity. He also praised a budget with a two-year average general fund spending growth of 1% a year. 'I believe we are setting the Cornhusker State up for success, and when we commit to strong fiscal conservatism and reduce the tax burden for Nebraska families, the potential of this place for generations to come is beyond our understanding,' Pillen said. Pillen said he and state lawmakers worked together to pass a 'budget package that said no when we needed to say no' and put the state's 'idle pillowcase money to work.' Nebraska lawmakers balanced the budget mostly by using the state 'rainy day' cash reserve fund and a series of cash transfers and spending cuts to fill budget holes. Democratic lawmakers have compared the budget to 'The Emperor's New Clothes,' a fairy tale where the ruler is naked but his subjects pretend he has extravagant clothing. Pillen tried and then withdrew his intended $14.5 million in general fund line-item vetoes to the budget. Property tax relief, a top Pillen priority, was dealt a blow when the Legislature's last shot at meeting his pledge to keep property taxes flat this year fell short last month, Nebraska's 'One Big Beautiful Bill' that would have shifted sales taxes toward property tax relief. That bill became the third property tax package in the past year to propose and lack support for broadening the sales tax base to lower property taxes. Pillen's push for 'Winner-Take-All' failed, as grabbing too few votes to overcome a filibuster. The governor, whose family owns a major hog operation based in Columbus, alluded to addressing property taxes in future sessions. 'We can decrease spending and actually fix our tax system — and we have to fix it because it is badly broken,' he said. Pillen achieved some of his culture war-related goal issues, including the school sports law, a law against foreign agents, age verification for future social media accounts and the ban on lab-grown meat. Pillen didn't directly address some of the session's controversies, among them several heated debates as the GOP-majority Legislature pushed back against a handful of ballot measures passed by Nebraska voters, including new laws requiring paid sick leave, raising the minimum wage, repealing school vouchers, and legalizing medical marijuana. He said he would continue to work with lawmakers to serve the people of Nebraska — and this time made no mention of a possible special session. 'I'm really proud to have partnered with you all on many of these initiatives,' Pillen said, 'So good news in just seven or so months, we all get to do it over again.' SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
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No more vetoes, Pillen says as 2025 Legislature wraps up; two lawmakers relieved
State Sen. Megan Hunt of Omaha speaks on the floor of the Legislature on May 19, 2023, in Lincoln, Neb. (Zach Wendling/Nebraska Examiner). LINCOLN — Two Nebraska bills most vulnerable to a governor's veto in the waning hours of the 2025 Nebraska Legislature are about to become law without his objection. The pair — separate priority bills from Omaha State Sens. Megan Hunt and Terrell McKinney — were among a late wave of 26 bills approved by the full Legislature and awaiting action by Gov. Jim Pillen as lawmakers adjourned for the year. Both the Hunt and McKinney bills cleared final votes Friday by less than the number needed to override a veto. Pillen, in a letter early Monday to the Clerk of the Legislature, said all the bills on his desk 'will become law without my objections in the coming days.' Included in the 26 bills Pillen is expected to approve were three sent to his desk Monday. That negated any need for veto override attempts on the Legislature's final day. Hunt said she was 'surprised,' and excited to see her Legislative Bill 275 cross the finish line. The bill reforms the use of Social Security benefits received by eligible Nebraska foster children, in part strengthening communication between the Nebraska Department of Health and Human Services and the youth's representative. Hunt described recipients as among the state's most vulnerable, because the benefits are related to the death of a parent or guardian or a physical or mental disability. DHHS currently intercepts the Social Security benefits bound for those kids and uses the funds to offset the state costs of the youths' care. LB 275 requires DHHS to set aside at least 20% of all Social Security benefits in a separate trust fund, beginning when the foster youth is 14, with the percentage increasing gradually to 50% at age 18. Meant to ease transition to adult independence, it brings Nebraska 'in line with federal law to provide further accountability, transparency and conservation of a portion of the funds in a trust account for the youth's own use when they exit state care.' Hunt said she thought LB 275, which advanced to Pillen's desk on a 29-19 vote, might be in jeopardy partly because of a roughly $1 million in annual notification and operational costs estimated in a fiscal note and also because of a pattern of Pillen's vetos, which she said have been 'less about policy and more about the introducer.' McKinney said Monday that he was unsure what Pillen might do on LB 48, his bill aimed at helping to keep youths out of the criminal justice system. He said he was happy to see it unobstructed by a veto, and proud of the accomplishment. 'It's good legislation that's going to help a lot of families and juveniles, keeping them out of the system,' he said. LB 48 calls for an around-the-clock Family Resource and Juvenile Assessment Center pilot program in Omaha. The goal is two sites that will address family dynamics, mental health, substance abuse and educational challenges to juvenile delinquency. The bill faced resistance and near demise during earlier legislative debate. It passed final reading on a 27-21 vote. Of 26 bills awaiting Pillen's signature Monday, two others passed final legislative debate with 33 votes; four passed with vote tallies in the mid to upper 30s, and the rest secured 40 or more votes. Said Hunt: 'I'm excited now to breathe a sigh of relief and move on to the next issue.' Nebraska Examiner reporter Zach Wendling contributed to this report. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
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Nebraska lawmakers adjourn 2025 legislative session, look ahead to future budget changes
State senators join together after adjourning for the year at the end of the 2025 legislative session. Not pictured: State Sens. Christy Armendariz of Omaha, Myron Dorn of Adams, Rob Dover of Norfolk and Glen Meyer of Pender. June 2, 2025. (Zach Wendling/Nebraska Examiner) LINCOLN — Nebraska lawmakers ended the 2025 legislative session Monday, celebrating a balanced budget achieved over a major projected deficit and the passage of more than 200 bills. Speaker John Arch of La Vista, marking the end to the 89-day session, thanked his colleagues for their work, and centered them on what he has already identified as the 'biggest challenge' for 2026, the same as in 2025: the state budget. He said fiscal numbers often change in the two-year budget cycle, and 'there is considerable uncertainty in the world that could make accurately predicting our fiscal future more difficult.' Lawmakers are projected to end the next two fiscal years, through mid-2027, at a $4.15 million surplus. Lawmakers are facing a projected $129.1 million hole in the following two fiscal years, from mid-2027 through mid-2029, which future lawmakers will need to address. Just five months ago, lawmakers faced a $432 million projected deficit for the 2025-27 fiscal years, which had grown by the time the budget passed in May. 'There is always more work to do and more opportunity to make Nebraska an even better state in which to live our lives and build our dreams,' Arch said in his closing address. 'It was hard work this session, but you proved that you can do the hard work. Next session will be no different.' Arch told senators to pay attention to fiscal dynamics in Washington, D.C., which could fall back on Nebraska, and to the next state revenue forecast this Oct. 31, on Halloween. Multiple state senators have noted congressional talks on Medicaid and SNAP (Supplemental Nutrition Assistance Program) benefits could pass costs back on to Nebraska. Gov. Jim Pillen and Arch agreed that budget adjustments for the 2025-27 fiscal years 'will be a priority' in 2026. That agreement came after Pillen unsuccessfully tried to line-item veto multiple items from the state's budget bills. Lawmakers rejected the vetoes as not having been properly filed with the Legislature, and Pillen ultimately withdrew his vetoes. As of this time, neither Pillen nor lawmakers have announced plans for a 2025 special session. A total of 204 bills passed this session, according to a count by the Legislature. Arch said 113 more bills were amended into those bills that have or will soon become law. Most bills that do not have a set date to take effect will become law Sept. 3, three months after adjournment. Pillen has committed to not vetoing any of the bills sent to him before Monday. Arch said senators requested more than 1,600 amendments and 845 fiscal notes during the session. While 715 bills, 18 constitutional amendments and six more policy-based resolutions were introduced this session, Arch said 374 more proposals were drafted but not introduced. Any legislation not passed in 2025 will return in 2026, such as slowing down voter-approved annual increases to the state minimum wage, increasing paid family and medical leave for teachers, requiring health care facilities to cremate or dispose of aborted fetal remains or creating second chance relief for certain state offenders. Arch told his colleagues to consider over the next seven months what they want to bring to the 2026 table, including what issues are most important to constituents and the state generally. 'Think about how we're going to work together as a diverse group of individuals,' Arch said, 'with differing opinions, different life experiences, but with a common goal of building consensus and crafting a policy that even makes this state of Nebraska better and better.' Lawmakers will reconvene Jan. 7, 2026, and stay for up to 60 legislative days, or around mid-April. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
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New school finance commission approved with hopes for long-term Nebraska property tax reform
State Sens. Wendy DeBoer of Omaha and Jana Hughes of Seward, from left, take photos of the successful vote to move forward a School Finance Review Commission led by Hughes in 2025 and sought by DeBoer in earlier years. May 21, 2025. (Zach Wendling/Nebraska Examiner) LINCOLN — Nebraska lawmakers greenlit a long-term commission Friday to review how the state funds its K-12 schools, a step that could lead to future property tax relief after the latest efforts fell short this year. Legislative Bill 303, from State Sen. Jana Hughes of Seward and introduced at Gov. Jim Pillen's request, passed 48-0. It would create an 18-member School Financing Review Commission to regularly review and suggest possible improvements to the state's main state aid formula to divert sales and income tax dollars to public K-12 schools: the Tax Equity and Educational Opportunities Support Act. 'I hope to be a fly on the wall of those meetings anyway,' said Hughes, who plans to reintroduce legislation in 2026 for additional property tax relief. 'When you hear ideas, then it might spark something else that gives you better ideas.' LB 303 received widespread support, including from the Nebraska Farm Bureau, Nebraska Farmers Union, Nebraska State Educational Association, Nebraska Rural Community Schools Association, Nebraska Council of School Administrators, Nebraska Association of School Boards, Greater Nebraska Schools Association, Educational Service Unit Coordinating Council and the OpenSky Policy Institute. The 'TEEOSA' formula, created in 1990 and perpetually adjusted since, in most basic terms, diverts 'equalization aid' to public school districts if it calculates that a local district has more 'needs' than 'resources.' 'Needs' is calculated among 18 buckets, including a district's poverty concentration, students with limited English proficiency, transportation needs and student growth. 'Resources' includes six buckets of funds, such as estimates of property taxes that could be raised with a $1 tax levy and net option enrollment funds. The formula diverts about $1.2 billion between 245 school districts each year. An increasing number of districts do not receive any TEEOSA aid under the formula, which is why Pillen and other senators in 2023 created 'foundation aid,' distributing $1,500 to school districts roughly for each student. About 60% of foundation aid is considered a 'resource.' Pillen, in a Friday statement, said the state's history with TEEOSA has indicated some 'glaring flaws.' He thanked Hughes for championing a commission that Pillen said could find the 'right solutions' to funding schools and 'ultimately be a part of solving our property tax crisis.' Hughes said the 'significant milestone' has been 'a long time coming' with multiple senators, including State Sen. Wendy DeBoer of Omaha and former State Sen. Al Davis of Hyannis, who each proposed similar commissions. DeBoer, now in her seventh year, routinely fought for the commission, including with LB 500 this year, because she believes it is the best way for a 'deep dive look' at TEEOSA and property taxes generally. She said it can help understand if the state is on the right path,' or if corrections are needed, 'not just today but in the long run.' DeBoer and Hughes are among a rare crop of senators who understood TEEOSA before coming to the Legislature, Hughes because of school board service in Seward and DeBoer because of preparations during her 2018 campaign and as a self-described 'nerd.' The two senators said the implementation of term limits in 2006 also complicated major changes to TEEOSA. State Sen. Dave Murman of Glenvil, chair of the Legislature's Education Committee, said the commission shows the need to reform property taxes and how the state funds its public schools. 'I agree with the desperation of farmers and homeowners that nothing else has worked, so it's worth a try with the commission,' Murman said. A former senator had questioned whether a commission was needed, arguing that lawmakers didn't need an outside advisory group and could act right away for any TEEOSA changes. Murman said the commission could be beneficial, but he's been hesitant to support one in the past because he feared school officials might push conversations in ways that support their local schools or a set group of schools. He said their representation is needed, but he also wanted more taxpayer representation. Hughes embraced those suggestions. With those reservations, Murman said senators should take any recommendations with 'a grain of salt' as they have the final say in legislation. Murman plans to appoint himself as the Education Committee representative on the commission. Hughes, vice chair of the Legislature's Education Committee, has made it one of her personal legislative missions to reform the state's model for funding K-12 schools. Over her years in the Legislature, she hopes to lower school property tax levies and push them closer together. Right now, school districts can tax up to $1.05 per $100 of taxable property valuation. TEEOSA considers a 'local effort rate' of $1 per $100 of taxable property valuation for every school district, a mathematical model to determine what a district could theoretically contribute. LB 303 would have originally lowered both the maximum tax rate and the 'local effort rate' by 3 cents, thereby distributing more dollars to schools to ease the burden of local property taxes. That would have cost more than $120 million, proving too big a hill to climb with the state's budget woes. Pillen originally included LB 303 in his budget proposal in January, but the Appropriations Committee made key diversions from Pillen's proposal, and downward economic projections in April derailed hopes to find additional funds without expanding sales taxes. Instead, the bill moved forward only with the review commission, the members of which will need to be appointed within one month of the governor signing the bill. A first report is due Dec. 1, with subsequent reports each Nov. 1 after. The commission's main duties are to: Evaluate TEEOSA and make recommendations for adjustments or changes 'that may be necessary to help prevent the increase of property taxes.' Regularly review both the 'needs' and 'resources' sides of the TEEOSA formula. Analyze how to minimize the negative impact on schools during times when the state might not be able to fully fund the TEEOSA formula. Examine the impact of funding for education on student achievement and outcomes, including access to early childhood education, student attendance, literacy, graduation rates, college-going rates and postsecondary workforce participation. Consider the impact of funding on issues and resources impacting students with relatively high needs, including students who live in areas of high concentrations of poverty, students with an individualized education program and students with limited English proficiency. Hughes' bill languished in the Education Committee until mid-May, largely because of a lack of funds. But it also stayed behind as a backup for property tax reform. 'We had to get a better feeling of what mechanisms might work to fund schools and property tax relief,' Murman said. 'We wanted to keep all options open.' Murman tried to keep LB 303 in committee longer than when the committee met May 9 to advance the bill 7-0, which could have hurt the chances of the bill reaching its finish line. The bill reached the full Legislature on May 15, the 80th legislative day, and passed on the 88th legislative day. Lawmakers will adjourn for the year Monday. At the committee meeting to advance LB 303, a committee staffer urged Murman to oppose LB 303, or at least not vote to advance it. But Murman voted it out of committee and approved it along the way. He said his concerns weren't personal. Hughes challenged Murman for committee chair in January. He won reelection 29-20. LB 303 sought three state senators as nonvoting members of the commission. However, Murman said the Education Committee chair should be a member, which some committee members pushed back on. Hughes changed her bill so the senators are the chairs of the Education and Revenue Committees, or their designees, and one at-large senator. No more than two senators can be of the same party, and both chairs are Republicans. If the Revenue Committee chair appoints himself, Hughes would not be able to serve on the commission because she, too, is a Republican. Hughes said she doesn't see a big recommendation coming from the commission this year but will continue work ahead of the 2026 session on how to drop school property tax levies and increase property tax relief. She plans to work with at least six other senators, two each from the Appropriations, Education and Revenue Committees, with even political party splits. 'People may or may not have noticed what a big bill it is,' DeBoer said, 'but it is a big deal towards the ultimate goal of finding the right way for Nebraska to finance education.' The School Financing Review Commission shall consist of: The state commissioner of education (currently Brian Maher), or the commissioner's designee, who will chair the commission. The state property tax administrator (currently Sarah Scott), or the administrator's designee. One representative of the governor appointed by the governor. Three members of the Legislature, including the chairs of the Education Committee (currently State Sen. Dave Murman) and Revenue Committee (currently State Sen. Brad von Gillern) or their designees. Up to two senators can be from the same political party. One member who is a representative of postsecondary education with expertise in school finance. One representative of a Class V school district (Omaha Public Schools). One representative of a Class IV school district (Lincoln Public Schools). Four superintendents or school board members representing Class I, II or III school districts (smaller than OPS or LPS). No more than two members can be from the same school district class. Five members appointed from the state at large, including at least one with experience in business, one with experience in farming and one who is an active certified teacher in a public school. The commission must meet at least once each calendar quarter. Commissioners would need to be designated by early July. The Nebraska Department of Education, Nebraska Department of Revenue and the Legislature's legislative fiscal analyst can provide data and assistance as needed. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
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Proposal to ban most THC, consumable hemp products in Nebraska delayed until at least 2026
State Sen. Kathleen Kauth of Omaha. Dec. 12, 2024. (Zach Wendling/Nebraska Examiner) LINCOLN — A legislative effort backed by Nebraska Attorney General Mike Hilgers to ban most consumable hemp and other THC products in the state stalled Friday and will now wait until at least 2026. State Sen. Kathleen Kauth of the Millard area, sponsor of Legislative Bill 316, asked that her Legislative Bill 316 be 'passed over' on Friday. She waited to do so until just 10 minutes before a two-hour debate would have ended, a time when Kauth would have needed 33 votes to survive a filibuster. After that, she would have needed 25 votes to pass LB 316 and send it to Gov. Jim Pillen. Kauth had the backing of most of the officially nonpartisan Legislature's 33 Republicans. But Republican State Sen. Ben Hansen of Blair held to his promise to oppose LB 316 if it wasn't amended to explicitly protect medical cannabis products. Kauth tried to address Hansen's concerns and would have, said Hansen. But lawmakers ran out of time, because State Sen. John Cavanaugh of Omaha and other opponents successfully blocked LB 316 from being amended. Hilgers has argued that THC products with delta-8 are already illegal, to which Cavanaugh said Friday that if that's true, a bill isn't needed. Hansen said the current 'environment' with Hilgers, who has opposed medical cannabis and has launched a statewide campaign against delta-8, could be 'hostile.' Hansen said there was language in LB 316 that could 'greatly impact' medical cannabis. 'That's something I cannot have,' Hansen said. 'I think the people passed [medical cannabis] for a specific reason, and I think they are then due to have what they voted for.' Hilgers helped lead opposition to Hansen's proposal for clearer medical cannabis regulations and guardrails with 53 sheriffs. His LB 677 fell short 10 votes of advancing on May 20. Part of Friday's last-ditch effort featured pressure on State Sen. Jane Raybould of Lincoln, who said she was concerned about 'bad actors' in the THC arena but didn't want to take away the health products some Nebraskans rely on. Raybould echoed Hansen that lawmakers should allow a new medical cannabis regulatory commission to proceed with directives for those products. Kauth said multiple times during the debate that her bill had nothing to do with medical cannabis and that more than a dozen amendments from Cavanaugh made it 'impossible' to seek the changes needed to keep her bill moving forward. 'No one is going into anyone's homes and searching their medicine cabinets,' Kauth said. 'That is more hyperbole and hysteria from the left.' State Sen. Jared Storm of David City, who prioritized Kauth's LB 316 for this year's session, encouraged Nebraskans not to buy the 'garbage' products. He repeated that he would never jeopardize 'the health or safety of our citizens of this state, especially children and young adults, for revenue.' LB 316 would prohibit raw hemp above 0.3% tetrahydrocannabinol (THC) of any concentration and with processed hemp prohibit the lesser of 0.3% THC on a total weight basis or 10 milligrams per package, effective Jan. 1. The mature stalks of Cannabis sativa and its fiber, oil, cake and any other naturally derived products would not be considered hemp, leaving a narrow legal path for some hemp-based products such as fibers and textiles. If the bill passed, it would have included a 'consumer safe harbor period' through the end of 2025 to give consumers time to discard any 'illegal hemp' as newly defined under LB 316. Legal products would have faced an additional 10% wholesale tax at the time of purchase. The new excise tax revenue raised would have been directed toward property tax relief. Besides protecting the voter-approved medical cannabis laws, Kauth also worked with State Sen. Tom Brandt of Plymouth to offer an 'affirmative defense' in court if someone could prove they previously legally purchased what would have become 'illegal hemp' under LB 316. That could include a receipt. State Sen. Dan McKeon of Amherst, a Republican who represents a Pleasanton-based hemp company that has offered tours to state senators of its facilities, said there are good actors that lawmakers should be working with. State Sen. Dan Lonowski of Hastings, a close ally of McKeon, said there are no 'good actors.' Nebraska lawmakers again advance ban of most THC, consumable hemp products Kauth read a letter from Hilgers that had said if LB 316 passed, his office would have announced a pause on new civil enforcement actions against 'businesses operating in good faith' for at least 120 days, exactly through the end of 2025. Kauth declined to provide a copy of the letter because LB 316 did not pass. Kauth and Storm said they now hope Hilgers ramps up his legal efforts against THC stores. Many hemp-focused businesses said the broad language in LB 316 would shut down their industry, even as supporters said the bill wouldn't touch them. Kauth said Friday that some businesses that were fighting the changes are essentially 'admitting that they are selling dangerous, untested, unregulated, synthetic pot products.' 'They are pushing the health and well-being of their pocketbook above the health and well-being of Nebraskans,' Kauth said. 'I'm extraordinarily disappointed that that is where we have come.' Cavanaugh, who again led opposition to the bill, said regulations and not a ban were still the best path forward. He said LB 316 would go in the 'opposite direction' of economic development for budding businesses who are 'good actors.' His LB 16, to implement regulations on THC products, did not advance from the Judiciary Committee this year, and lawmakers repeatedly rebuffed his efforts. Cavanaugh repeated Friday that he is 'ready, willing and able to work on a regulatory scheme that will actually do this the right way and answer all the concerns that people have.' State Sen. Terrell McKinney of North Omaha, who also pushed for regulations, said Kauth's bill could cause more harm than good and that the state should let people be adults. 'Why do we have to act as if we're the moral compass for the state? We're senators. We're not people's parents,' said McKinney. State Sen. Margo Juarez of Omaha said she had purchased CBD with hemp in it for her nearly 101-year-old mother, but she didn't have a receipt for the product. Cavanaugh said the proposed defense provision only dealt with individuals, so businesses would have needed to destroy or sell all products by September, when the bill, if passed, would have taken effect. If not, business owners would risk 'countless felonies,' Cavanaugh argued. The debate on LB 316 has seen senators forcefully disagree with what would be banned, with supporters arguing it would only ban 'synthetic' chemically modified hemp or THC, while opponents said the bill would stretch to CBD, creams, ointments and most other products. Part of that is because LB 316 would count the THC level based on all concentrations — delta-8, delta-9, delta-10, etc. — and not just 0.3% delta-9 THCc. Cavanaugh and State Sen. Wendy DeBoer of Omaha have said that it could criminalize possessing a gummy as a felony. Supporters of LB 316, however, say that only chemically modified 'synthetic' products would be banned. Nebraska lawmakers in 2011 already banned 'synthetic' marijuana, such as K-2 or spice. Most hemp or other hemp-derived products require chemical modifications, such as heat. State Sen. Tanya Storer of Whitman said that while, as a conservative, she doesn't think government should be in the way of business or entrepreneurship, government does have a role to protect people 'from things that they couldn't otherwise do for themselves independently.' 'Individuals do not have the capacity to know the processes that go into developing a product. That's what we have things like the FDA for,' Storer said, referring to the U.S. Food and Drug Administration. Cavanaugh, McKinney, Raybould and State Sen. George Dungan of Lincoln repeatedly said that was part of the reason why regulations, not a ban, would be better, treating the products similarly to alcohol, tobacco or other drugs. Kauth said that with lawmakers' failure to move forward, senators must own that the next time someone dies because of the products, they will know: 'We could have stopped it.' LB 316 will return next year one vote away from passing, with eight minutes to go in the third round of debate, though it's unclear what amendments might come. Rescheduling would be up to Speaker John Arch of La Vista. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
