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LB 303

Create the School Financing Review Commission and change provisions relating to budget authority under the Tax Equity and Educational Opportunities Support Act

109th Legislature (2025-2026) Introduced by Danielle Conrad and 1 co-sponsor

Creates the School Financing Review Commission to study Nebraska's K-12 funding (TEEOSA) and recommend reforms to reduce reliance on property taxes.

Approved by Governor on June 4, 2025
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WeVote Research Nonpartisan
Bill Summary · LB 303

Summary — LB 303 (2025)

Title: Create the School Financing Review Commission and change provisions relating to budget authority under the Tax Equity and Educational Opportunities Support Act
Status: Approved by Governor (June 4, 2025); Emergency clause — effective on enactment

Main purpose

LB 303 makes targeted changes to Nebraska’s school finance law (TEEOSA) and creates a permanent advisory body — the School Financing Review Commission — to study and recommend changes to the state’s K–12 funding system. The bill reduces statutory maximum school property tax levies, increases a per‑student state aid component, creates a base‑levy adjustment mechanism that alters state aid calculations, and adjusts timing/certification rules and several budget‑authority provisions.

Key provisions and numeric details

  • Property tax levy cap: reduces the maximum general school levy from $1.05 to $1.02 per $100 of taxable valuation beginning in fiscal year 2025–26.
  • Foundation Aid increase: raises the TEEOSA “foundation aid” per formula student from $1,500 to $1,590 (a 6% increase) beginning with the 2025–26 school fiscal year.
  • Base levy adjustment: establishes a $0.30 per $100 of taxable valuation “base levy” benchmark. The State Department of Education must adjust state aid using that benchmark and year‑over‑year changes in district property valuations (new aid adjustment mechanism).
  • Certification and timelines:
    • Requires certification of state aid amounts by June 15, 2025, incorporating the new aid adjustment methodology.
    • Nullifies prior certifications of state aid, budget authority, and reserve percentages for the 2025–26 school year that were made before the act’s effective date.
    • Sets June 15, 2025 (and thereafter deadlines, e.g., annual March 1 certifications referenced in committee documents) for certification of district budget authority and allowable reserve percentages.
    • Requires the Appropriations Committee to include the funding amount for state aid in its annual recommendations to meet TEEOSA obligations.
  • Budget‑authority exclusions/amendments: AM1602 (adopted) modifies the list of allowable exclusions where districts may exceed general‑fund budget authority (examples include disaster repairs, certain retirement contribution carryovers and other specific exclusions).

School Financing Review Commission (created by the bill)

  • Composition: 18 members (including Commissioner of Education as chair, Property Tax Administrator, a Governor appointee, three legislative nonvoting members, postsecondary finance expert, multiple school district superintendents/board reps across district classes, and five at‑large appointees).
  • Terms & operations: Governor appoints most members; quarterly meetings minimum; administratively housed in the State Department of Education; members unpaid but reimbursed for expenses.
  • Duties: review and evaluate TEEOSA resource and need components, recommend formula adjustments to reduce property tax reliance, analyze impacts of underfunding on schools and student outcomes (early childhood, literacy, graduation, postsecondary/workforce), compare interstate policies, and submit annual reports (initial report by December 1, 2025; thereafter annual reports per amendment timing).

Who is affected

  • School districts: changes to levy limits, state aid calculations, budget‑authority exclusions, and certification schedules.
  • Property taxpayers: levy cap reduction is intended to lower property tax pressure (effect depends on local levies and state aid adjustments).
  • State budget/appropriations: higher per‑student aid and potential aid adjustments may increase state costs.
  • State Department of Education, Department of Revenue, Legislative Fiscal Analyst: data and administrative roles in implementing new aid calculations and supporting the commission.

Procedural/timeline highlights

  • Introduced Jan 15, 2025; Education Committee hearing Feb 10, 2025.
  • Passed Final Reading (with emergency clause) May 30, 2025 (vote 48‑0‑1).
  • Presented to and approved by Governor June 4, 2025 — immediate effect due to emergency clause.
  • Several floor and committee amendments were offered and adopted (notably AM1350/AM1593 and AM1602).

This bill is primarily structural and advisory: it changes specific TEEOSA mechanics and deadlines while creating a standing commission to study longer‑term school finance reform.

Compiled from official sources — confirm details with the bill’s official record.

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