Education Committee
February 10, 2025
Committee Chair: Sen. Dave Murman | Bills Heard: 5 | Full Transcript (PDF)
LB303: Tax Equity and Educational Opportunity Scholarship Act (TEEOSA) adjustments to increase state aid and reduce property tax reliance
Introduced by: Sen. Jana Hughes | Testimony: 10 proponents, 1 opponents, 1 neutral | Read bill text (PDF)
Governor Pillen and Sen. Hughes team up on major school funding overhaul that would boost state aid by $62 million while capping property tax levies. LB303 adjusts Nebraska's 35-year-old school funding formula through four mechanisms: lowering the maximum levy cap, increasing per-student foundation aid, creating a floor for low-levy districts, and establishing a commission to monitor the formula going forward. Why it matters: Rising agricultural land values have inadvertently shifted the tax burden from the state to property owners, pushing 184 of 244 school districts out of equalization aid eligibility. This bill attempts to reverse that trend while maintaining local control—a critical concern for rural districts. What they're saying: Proponents, including the Nebraska State Education Association and school administrators, called it the best education bill from the Governor's Office in a decade. But Omaha Public Schools warned that lowering the levy cap could cost them $30 million in future federal aid and proposed an alternative that maintains the current cap while adjusting the local effort rate instead. By the numbers: $62 million in additional state aid; foundation aid increases from $1,500 to $1,590 per student; only one school (Omaha Nation) affected by the base levy adjustment. What's next: No vote was taken. The committee will likely work on refining the School Finance Reform Commission composition and considering amendments before advancing the bill.
Committee sentiment: Supportive: Sen. Danielle Conrad, Sen. Dave Murman
Sentiment estimated from questions and comments — not stated positions.
LB500: Education Finance Commission
Introduced by: Sen. Wendy DeBoer | Testimony: 6 proponents, 0 opponents, 0 neutral | Read bill text (PDF)
Sen. DeBoer revives a bill she's championed for years to create a standing commission that would monitor Nebraska's school funding formula and prevent the kind of drift that has devastated rural districts. LB500 would establish an Education Finance Commission with expertise in TEEOSA to provide annual recommendations to the Legislature. The original TEEOSA formula included such a commission, but it was eliminated years ago to save money—a decision stakeholders now view as a costly mistake. Why it matters: Without ongoing oversight, the formula failed to adapt when agricultural land values tripled between 2008 and 2016, causing 150+ schools to lose equalization aid eligibility. A commission could have flagged and corrected this drift in real time. What they're saying: Proponents, including farm groups and education finance experts, called the commission essential infrastructure for managing a complex formula. The filibuster argument from years past—that the commission would improperly delegate legislative authority—was dismissed as applying to virtually every advisory board. By the numbers: The commission would cost only mileage reimbursement for members. What's next: No vote was taken. The bill is being heard in tandem with LB597 and appears to have broad support, with concepts incorporated into LB303.
Committee sentiment: Supportive: Sen. Danielle Conrad, Sen. Jana Hughes
Sentiment estimated from questions and comments — not stated positions.
LB597: TEEOSA formula adjustments including local effort rate reduction, agricultural valuation adjustment, and basic funding for early childhood
Introduced by: Sen. Wendy DeBoer | Testimony: 2 proponents, 1 opponents, 0 neutral | Read bill text (PDF)
Sen. DeBoer's alternative school funding bill takes a different approach than LB303, focusing on bringing school levies closer together through valuation adjustments and a sparsity-aware funding formula. LB597 would reduce both the local effort rate and levy cap by $0.10, cut agricultural land valuation from 72% to 65% in the formula, and replace flat foundation aid with a percentage-based approach that gives small districts more support. Why it matters: The bill directly addresses the root cause of the equalization crisis: inflated agricultural land values that pushed 150+ schools out of equalization aid eligibility. By reducing how much ag land counts in the formula, it rebalances the system without requiring massive new state spending. What they're saying: Proponents, including rural school board members, called it the right long-term target. But Omaha Public Schools opposed the foundation aid and ag valuation components, arguing they disproportionately benefit nonequalized districts and rural areas at the expense of equalized urban districts. OPS supported only the LER reduction. By the numbers: The bill is more expensive than LB303 due to the larger LER reduction, but the fiscal note reflects the cost of moving toward full equalization. What's next: No vote was taken. The bill is being heard alongside LB500 and appears to have less support than LB303, with key education stakeholders divided on the foundation aid and valuation adjustment components.
Committee sentiment: Supportive: Sen. Jana Hughes Skeptical: Sen. Glen Meyer
Sentiment estimated from questions and comments — not stated positions.
LB498: Foundation aid inflation adjustment
Introduced by: Sen. Dave Murman | Testimony: 3 proponents, 1 opponents, 0 neutral | Read bill text (PDF)
Sen. Murman introduces a technical bill to tie foundation aid to inflation, ensuring the $1,500-per-student commitment doesn't lose value over time. LB498 would adjust foundation aid annually by the Consumer Price Index for urban consumers, preserving the purchasing power of the commitment made in LB583 two years ago. Why it matters: Inflation has eroded the real value of the $1,500 foundation aid since it was established. Without an inflation adjustment, schools will gradually receive less in real terms, undermining the original commitment to increase state support and reduce property tax reliance. What they're saying: Murman framed this as honoring a bipartisan commitment (LB583 passed 44-0) rather than increasing aid. Omaha Public Schools opposed it, arguing foundation aid increases benefit nonequalized districts disproportionately and that new money should go to districts with greater needs. By the numbers: Three online proponents, one opponent. What's next: No vote was taken. The bill appears to be a lower priority than LB303 and LB597, but could be incorporated into a broader school funding package.
Committee sentiment: Unclear: Sen. Jana Hughes
Sentiment estimated from questions and comments — not stated positions.
LB161: Early childhood education weighting factor adjustment in TEEOSA
Introduced by: Sen. Juarez (introduced by legislative aide Rolf Kloch) | Testimony: 13 proponents, 0 opponents, 1 neutral | Read bill text (PDF)
With overwhelming support, a bill to increase early childhood education funding passes its first committee hearing, addressing Nebraska's ranking as dead last in state spending on preschool. LB161 would increase the weighting factor for 4- and 5-year-olds in the school funding formula from 60% to 100%, recognizing that young children are full students deserving full funding. The change would cost about $2 million annually. Why it matters: Nebraska ranks 44th out of 44 states in state dollars spent per child in early childhood education, despite having decent access. Early childhood education is one of the highest-ROI investments available, with research showing participants are 25% more likely to graduate high school and 4 times more likely to earn a bachelor's degree. It's also critical for closing achievement gaps for at-risk students. What they're saying: Teachers shared powerful stories of students arriving with no school experience and making dramatic progress—one girl went from hiding under a table to writing her name in six months. Neuroscience experts explained that brain architecture is built through interactions in early childhood, making this the optimal time to invest. No one testified in opposition. By the numbers: 13 online proponents, zero opponents, one neutral. Fiscal cost: $1.9-2.9 million annually. What's next: No vote was taken, but the bill appears to have clear sailing with bipartisan support and no opposition.
Committee sentiment: Supportive: Sen. Danielle Conrad Unclear: Sen. Dan Lonowski
Sentiment estimated from questions and comments — not stated positions.
Session Notes
The Education Committee held a full day of hearings on February 10, 2025, focusing primarily on school funding and TEEOSA formula adjustments. Governor Jim Pillen testified in support of LB303. The committee heard four major school funding bills (LB303, LB500, LB597, and LB498) plus one early childhood education bill (LB161). A 5-10 minute break was taken between the LB500/LB597 hearing and the LB498/LB161 hearing. No votes were taken on any bills during this hearing. The committee indicated it would work on refining proposals, particularly regarding the composition of the proposed School Finance Reform Commission. Online testimony was recorded for all bills: LB303 (1 proponent, 1 opponent, 1 neutral); LB500 (6 proponents, 1 opponent, 0 neutral); LB597 (2 proponents, 0 opponents, 0 neutral); LB498 (3 proponents, 0 opponents, 0 neutral); LB161 (13 proponents, 0 opponents, 1 neutral).
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