Senators' pay, tax on services discussed in Legislature

By Fred Knapp , Senior Reporter/Producer Nebraska Public Media

March 14, 2025, 5 p.m. ·

Nebraska Capitol (Photo by Fred Knapp, Nebraska Public Media News)

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Nebraska state senators might get a pay raise under a measure being debated in the Legislature. And services ranging from charter flights to dry cleaning could be taxed in order to offset property taxes, in a measure being considered by a legislative committee.

Lawmakers Friday debate a state constitutional amendment proposed by Sen. Ben Hansen to establish an independent commission to recommend changes in state senators’ pay. If approved by the Legislature, the measure would go before voters next year.

Senators’ pay is currently fixed in the state constitution at $12,000 per year, an amount that hasn’t increased in nearly 40 years. Hansen said that’s low compared to other states, and limits who Nebraskans can choose to represent them.

“The national average for the annual salary for legislatures is $39,216 in 2021. Nebraska makes it very difficult for people working normal jobs to be able to represent their communities as a state senator,” he said.

Sen. John Arch, speaker of the Legislature, said the low pay means senators tend to be older or younger, but not middle-aged.

“You will see people such as myself that are at that retirement age," he said. "You will see people who are younger, who are building a career, who are putting pieces together in order to be able to be here. But (for) the 40- and 50-year-old it is a very difficult time to be here in the Legislature. You have children at home. You are paying for college, you are doing the things that are required of life, and it's very difficult to be here."

Sen. Machaela Cavanaugh said she has supported a pay raise in the past, but was leaning against this proposal because of how the Legislature is acting this year.

“We are nickel-and-diming the people of Nebraska on everything, and so I don't feel that in good conscience, I can support something to raise our own salary, as measly as our salary is, so long as we can't also raise like resources we give to people who are 50% of the poverty level, who make less than $12,000 a year,” she said.

Cavanaugh was referring to the Health and Human Services Committee killing a proposal to increase welfare benefits for people on the Temporary Assistance to Needy Families, or TANF program.

Opposition also came from Sen. Danielle Conrad, who implied supporters were being hypocritical.

“I think this measure comes at a time by proponents who are completely out of touch with where everyday Nebraskans are," she said. "Initially, this measure sought to ensure that Nebraska legislators would make at least minimum wage, yet this body is preparing to undercut minimum wage for other workers in Nebraska, and they've prioritized that measure, and it will be on our agenda soon."

Three years ago, voters approved increasing the minimum wage, which is scheduled to reach $15 an hour next January and then increase with inflation. Pending legislation would allow lower starting wages and cost-of living increases for young people under the age of 18.

Hansen acknowledged the opposition based on what the Legislature is currently doing, but stressed the decision would be up to voters.

“I trust the people to make good decisions, and I expect them to read through this thoroughly and make the decision that they feel is right," he said. "And if they don't like this, then don't vote for it, and we'll keep our pay the same way. And if they decide this is a good idea for the Legislature and for the people of Nebraska… I'm all for it."

Lawmakers adjourned for the day without reaching a vote. Speaker Arch said they would resume debating the measure Monday.

Also Friday, the Revenue Committee met to discuss proposed changes to Nebraska’s tax system. Among the proposals receiving the most discussion is one that would impose sales taxes on about two-dozen currently tax exempt services. They include pet grooming, tattooing, swimming pool maintenance, interior design, dry cleaning and chartered flights. Sen. Dave Murman has named the bill his priority, increasing the chances it will be debated yet this year.

In an interview, Murman said the proposal would help modernize Nebraska’s tax system to reflect the modern service economy.

“Most of these services are -- pretty much all of them are -- more wants than needs… but my whole goal is property tax relief. I don't like to have any more taxes than we actually need, but we do have to have fair taxes. And we have been trying to get property tax relief for, I think, decades now, and we're overdue to try and really do something to do that, and we need revenue to replace the lost revenue if we do actually have property tax relief,” he said.

Sen. Tom Brandt, who introduced the bill, estimated that the taxes on services, combined with a proposed cigarette tax increase from the current 64 cents a pack to $1.36, would raise about $80 million a year.

Sen. George Dungan expressed resistance to taxing services in order to lower property taxes, noting that the state is also in the process of lowering corporate taxes.

“I just have an objection when we're broadening the tax base and putting the burden on everyday working people to pay more money in sales tax, when we're simultaneously giving tax cuts for wealthy corporations. I just think that it's a philosophically problematic way to try to fund the state and when we're looking at a budget crisis, which obviously we are here in Nebraska, I think that we shouldn't be trying to balance the budget on the backs of people who were just trying to make ends meet,” he said.

The committee has not yet voted on advancing the proposal to the full Legislature for consideration.