Proposals would end unfunded mandates

The Nebraska Legislature would be required to provide full reimbursement to political subdivisions for any new program or expansion of an existing program under two proposed constitutional amendments heard Feb. 27 by the Government, Military and Veterans Affairs Committee.

LR18CA, introduced by the Government, Military and Veterans Affairs Committee, and LR16CA, introduced by the Urban Affairs Committee, would require, beginning in 2026, that the state pay the full costs of new programs or increased levels of service required under an existing program either through general fund appropriations or an increase in state distribution of revenue to the impacted political subdivision.

If approved by lawmakers, the proposals would be placed on the ballot for voter approval in the 2026 general election.

Introducing LR18CA, committee chairperson Sen. Rita Sanders of Bellevue said every mandate the state places on counties and cities, even when in the service of valuable public policy, comes at a cost to those entities. The Legislature has studied the problem of unfunded mandates several times in recent years, but has failed to take meaningful action, she said.

“Studying the problem has not solved the problem,” Sanders said.

Omaha Sen. Terrell McKinney, introducing LR16CA on behalf of the Urban Affairs Committee, agreed. Unfunded mandates cause strain on local government budgets, he said, often forcing them to increase local property taxes.

“For far too long, political subdivisions — our cities, counties and school districts — have been left to absorb the financial burdens left by state mandated programs without any adequate support,” he said.

Lisa Albers testified in support of both proposals on behalf of the Nebraska Association of School Boards and Grand Island Public Schools. Unfunded mandates can force local school boards to focus on statewide priorities rather than local needs, she said.

“Unfunded mandates impose significant challenges on Nebraska public schools by requiring them to implement programs or meet standards without providing financial resources,” Albers said. “Even the most well-intended of mandates can strain local budgets, divert resources from essential programs and, at times, undermine local control.”

David Klug, chairperson of the Sarpy County Board of Commissioners, also spoke in favor of both proposals on behalf of the board. Counties rely mostly on property taxes to fund services, he said, and new state programs that do not include funding make it difficult for counties to meet residents’ needs.

“In 2024, Sarpy County and its taxpayers paid $15 million, or 15% of the county’s general fund budget expenditures, toward unfunded and underfunded mandates,” Klug said.

No one spoke in opposition to the measures and the committee took no immediate action on either proposal.