Nebraska lawmakers discuss expansion of 529 plans for private K-12 tuition funding

In the heart of Nebraska's legislative chamber, lawmakers gathered on April 30, 2025, to discuss a series of bills aimed at reshaping the state's tax landscape and educational funding. The atmosphere was charged with anticipation as senators presented their proposals, each one promising to impact the lives of Nebraskans in significant ways.

One of the key discussions centered around LB 647, which incorporates several amendments, including provisions for tax credits related to educational savings. Senator Sorrentino introduced a notable amendment, AM 12:03, which seeks to expand the use of 529 plans to cover tuition for K-12 private schools. This change aligns Nebraska with federal tax law, allowing families to use tax-free savings for a broader range of educational expenses. Currently, Nebraska is one of only eight states that restrict these funds solely to college expenses.

Senator Sorrentino emphasized the importance of this amendment, highlighting how it would enable parents and grandparents to save for their children's education more effectively. "It's a great way to save for education," he remarked, noting that the bill would allow tax deductions of up to $10,000 per year for contributions to these plans. However, the implementation of this change is set for 2029, a strategic delay intended to mitigate immediate fiscal impacts on the state budget.

Yet, not all senators were in favor of this expansion. Senator Duncan voiced strong opposition, drawing parallels between the proposed changes and previous legislative efforts that sought to funnel public funds into private education. He expressed concern that expanding the 529 plan's scope could indirectly subsidize private school tuition, contradicting the public's previous rejections of similar initiatives. "The public has spoken time and time again that they do not want public dollars going to private schools," he asserted, urging his colleagues to reconsider the implications of the amendment.

In addition to the educational funding discussions, the session also addressed LB 642, which aims to exempt land with Nebraska veil easements from property taxes, promoting recreational development and tourism. Senators highlighted the bill's potential to enhance the quality of life for Nebraskans while providing equitable relief to landowners.

As the session progressed, the debate reflected a broader conversation about the direction of educational funding in Nebraska. With the clock ticking toward the 2029 implementation date, lawmakers grappled with the balance between supporting educational choice and adhering to the public's wishes regarding the separation of public and private funding.

The discussions in the Nebraska Legislature on this day encapsulated the complexities of tax policy and educational reform, leaving many questions unanswered as senators prepared for further deliberations in the days to come. The outcome of these bills could reshape the educational landscape in Nebraska, making it a pivotal moment for families across the state.