State Sen. Jane Raybould of Lincoln, center, talks with State Sens. Paul Strommen of Sidney and Kathleen Kauth of Omaha on May 28, 2025. Raybould sponsored a measure to slow down voter-approved minimum wage increases while Strommen sponsored a measure to water down voter-approved paid sick leave. Kauth chairs the Legislature's Business and Labor Committee that considered both bills. (Zach Wendling/Nebraska Examiner)
LINCOLN — Workers’ rights and the state budget were among the top themes of Nebraska’s 2025 legislative session as lawmakers tried to balance new voter-approved laws with legislative power, all while dealing with a major budget deficit.
State lawmakers had telegraphed their intent to adjust what Nebraskans passed in recent years, including votes to increase the minimum wage (passed by about 59% of voters in 2022) and mandate paid sick leave for all workers (passed by about 75% of voters in 2024).
The labor laws came into focus in the first contested vote of the 2025 session in January, the choice for chair of the Business and Labor Committee.
Both candidates for the post — Omaha State Sens. Kathleen Kauth and John Cavanaugh, a Republican and Democrat in the officially nonpartisan Legislature, neither of whom had yet served on the committee — hinted that the laws from Nebraska’s “second house” might need adjustments.
“We need to make sure that we honor the intent of those [voter-initiated] bills and get through the process successfully,” Kauth said Jan. 8. She would be elected committee chair 31-18.
Cavanaugh described the need for possible “technical updates and implementation” to some of the ballot-passed laws while stating the Business and Labor Committee should “be respectful of the will of the voters but also make sure that we are taking into consideration those very real concerns.”
The labor proposals worked their way through Kauth’s committee, and the fights spilled over like proxy wars into other labor measures and the budget.
If 2023 focused on health care and 2024 focused on education and taxes, in that year’s regular and special sessions, 2025 focused on the budget and labor, often a direct response to the “will of the voters” from recent elections.
‘Will of the voters’
The phrases “will of the voters” or “will of the people” were repeated throughout the session and became rallying cries for opponents of the labor bills. One example was the morning of March 26 when the phrases were said 44 times by 14 different senators during three hours of debate on proposed changes to paid sick leave, legislative transcripts show.
The proposed tweaks were panned as partisan and nearly divided the 49-member Legislature along ideological lines. One Democratic exception, State Sen. Jane Raybould of Lincoln, a grocery store executive, joined 32 of 33 Republicans on the labor-related, voter-passed laws.
The result left 33 votes, which is the minimum threshold to overcome a filibuster but also change voter-approved laws as required under the Nebraska Constitution. However, the minimum wage proposal led by Raybould stalled procedurally but will likely return in 2026 and pass if all supporters hold.
Supporters defended the efforts to water down paid sick leave protections and slow minimum wage increases as necessary for businesses, citing fiscal and cost restraints.
“I don’t think we’re undoing the will of the people as much as we are contemplating what the financial impact may be,” State Sen. Tony Sorrentino of the Elkhorn area said in late March.
But opponents regularly questioned the message to “working families” and made the fight personal, especially for Raybould and other business owners.
“We can see by opening the door to undermining the will of the people under the auspices of so-called ‘technical corrections,’ it has opened a Pandora’s box to completely defy the will of the people,” State Sen. Danielle Conrad of Lincoln said the same day Sorrentino spoke.
‘Nebraska: We do not like competition’
Two other labor fights moved more quickly, including a pair from freshman State Sen. Bob Hallstrom of Syracuse, and led to the gnashing of senators’ teeth early in the session.
Hallstrom’s first bill classified rideshare drivers for Uber, Lyft and Door Dash as independent contractors, locking workers out from some employee-based protections for discussing organizing into unions (Legislative Bill 229), while the other increased the legal threshold to sue companies after cybersecurity breaches, protecting businesses from lawsuits unless they showed “willful, wanton or gross negligence” in securing data (LB 241).
The fights repeatedly drove a wedge between some progressives in the legislative minority and Raybould, who also joined 32 Republicans on the rideshare and cybersecurity bills over filibusters.
Conrad and State Sen. Terrell McKinney of Omaha, both progressives, viewed the Hallstrom bills as part of an emerging theme of being hostile to labor as the pushes to change voter-led laws waited in the wings.
McKinney on March 4, during debate on a smaller fight over liquor licenses designed to help in-state distillers, said the state was reaching a new slogan: “Nebraska: We do not like competition.”
“It’s either competition or helping out corporations,” McKinney said at the time.
State Sen. Dan Quick of Grand Island, one of two Democratic lawmakers representing Trump-won districts, led the distillery measure that Raybould opposed to the point of seeking an attorney general’s opinion. She argued Quick’s proposal would have given “preferential treatment” to in-state operators and could entangle other liquor laws and lead to lawsuits. The bill passed 33-13.
Conrad on Feb. 4 called out “palpable disdain both for the voters of Nebraska and for working families,” and on March 6 she said “anti-worker legislation” was moving “at record pace.”
Legislature’s referendum power
Hallstrom, a former longtime lobbyist who had worked around the statehouse since 1981 when he graduated from the University of Nebraska College of Law, defended his legislation as helping protect “flexible work” for rideshare drivers. He said it would help working families. He said his other bill limiting lawsuits after data breaches would cut back on “speculative risks” that he argued could strain judicial resources or cost businesses.
Hallstrom said he doesn’t buy into the criticisms of him and others that they had advanced “anti-worker legislation” or pushed back on voters.
Instead, Hallstrom and Raybould repeatedly pointed to the Nebraska Constitution, as amended by the voters in 2004, that gives the Legislature the ability to amend voter-approved laws with at least 33 votes. Voters set the 33-vote threshold that year, moving it up from a simple majority.
“Not only have the people spoken with regard to the specific statutory initiatives regarding minimum wage and paid sick leave, but they’ve spoken just as loudly to the authority of the Legislature to make revisions where deemed appropriate and necessary,” Hallstrom told the Examiner.
Finding a ‘balanced approach’
Raybould was among those who repeatedly said senators in the majority were standing up for a “balanced approach” to “good policy,” which she and others argued would better help keep Nebraskans safe, healthy and employed with benefits and competitive wages.
Her minimum wage proposal sought to slow the annual rate at which the state’s minimum wage increases beginning in 2027, rather than increasing it based on inflation as voters mandated. Raybould’s measure would also carve out teen workers, aged 14 or 15, for a “youth minimum wage.”
“You have to always balance it out to make sure that we maintain the economic vitality and vibrancy and economic growth in our state without falling off and creating a cycle of cost increases that are so much harder for Nebraska families to be able to afford,” Raybould said in April.
Raybould took barbs from colleagues she usually agrees with, including Conrad. In March, Conrad urged her “friends on the left,” primarily Raybould, to renege from what she called an “ongoing assault on working families and workers’ rights” that were “undermining your values.”
“You claim to support civil rights. You claim to support human rights,” Conrad said. “Yet, without economic justice, Nebraskans have no opportunity to be empowered to exercise those.”
Raybould has decided to not seek reelection in 2026. She said her decision was not related to the “rather brutal” 2025 session or her minimum wage bill.
‘Making it so that it will work’
The paid sick leave law voters passed required sick leave to be paid to all employees beginning Oct. 1. But before the law takes effect, legislative changes led to passage by freshman State Sen. Paul Strommen of Sidney this spring will leave out teens aged 14 or 15, agricultural workers, independent contractors and businesses of 10 or fewer workers from the new requirement.
The back-and-forth was similar to that of minimum wage but featured a seemingly brief compromise in Strommen’s proposal that would have allowed more employees to be entitled to paid sick leave, including requiring it of businesses with 6-10 employees and for 14 or 15 year olds who are parents.
Strommen had said his measure recognized the “will of the voters, while also avoiding a few serious detriments to small businesses and workers and the Nebraska economy.”
But at the urging of State Sen. Mike Jacobson of North Platte, lawmakers reconsidered the “compromise.” It returned to the new Strommen requirements.
The majority yanked the “compromise” partly because the floor fight over the bill continued even after the changes had been adopted.
“We’re not taking away what the voters said they wanted. We’re making modifications to it,” Jacobson said in May. “We’re making it so that it will work for small businesses and for employers.”
The “compromise” would have also reinstated the voter-approved right for employees to sue to enforce the law, rather than solely relying on the Nebraska Department of Labor. Some lawmakers hope to revive that provision in 2026.
Employers can still choose to offer paid sick leave to any employee before the law takes effect Oct. 1, and employers can pay any employee above the state minimum wage, for that matter.
The way the public can petition the state government could also change as Strommen introduced an interim study to examine Nebraska’s ballot measure process, including possible statutory or constitutional tweaks.
Medical cannabis
The labor fights also played at least a small role in the defeat of efforts to tweak medical cannabis laws to legalize and regulate the drug, which voters approved in November.
But unlike the paid sick leave and minimum wage proposals, longtime advocates for medical cannabis, including those who led the 2024 campaign, had supported and asked for the legislative changes.
Cavanaugh was among those helping negotiate a path forward for the bill while Kauth worked with the Nebraska Attorney General’s Office on a hemp-related ban that some worried could ensnare the new legal framework for medical cannabis.
Some conservatives, including State Sen. Tanya Storer of Whitman, described the lawmakers’ efforts on medical cannabis as “political theater,” saying the proposal was meant to get around lawsuits, which have so far failed.
Storer and State Sen. Bob Andersen of north-central Sarpy County were among senators blasting progressives for embracing changes to the voter-approved medical cannabis legislation yet deriding conservatives for pursuing changes to the voter-approved laws on paid sick leave and minimum wage.
“This bill’s unnecessary, inappropriate, undermines the will of the people and implements recreational marijuana,” Andersen said at the time.
Progressives, including State Sen. John Fredrickson of Omaha, who similarly opposed the minimum wage and paid sick leave legislative bills, contended that cannabis would not “leap off the shelves” and corrupt Nebraska youths, as some opponents had suggested.
He said senators, sometimes, needed to go outside and “touch some grass and just think about what the world is like outside of this room.”
“Let’s not get too concerned about ‘fighting against the will of the people,’” Fredrickson continued. “Let’s help shape it. Let’s help put in the right guardrails in place, and let’s help build a system that we can be proud of and puts our patients first.”
Ongoing budget balancing
Minimum wage, paid sick leave and medical cannabis could all return in 2026, as could major adjustments to Nebraska’s 2025-27 budget.
Lawmakers began the 2025 session trying to juggle a $432 million projected hole but needed to cover even more after an economic forecast in April estimated fewer state receipts for the next two years.
Lawmakers juggled roughly $850 million in changes, such as creating new revenue streams, cutting state spending, scrounging for loose dollars in state cash funds and dipping into the state’s “rainy day” fund. In the end, they finished the session with $4.15 million to spare.
“It seemed like an insurmountable mountain to climb, but we did it, and we also did not cut essential services,” State Sen. Rob Clements of Elmwood, Appropriations Committee chair, said after the budget passed in May.
Still, the budget fight isn’t over. Just last week, revised fiscal estimates, including receipts coming $86 million short in May and June, returned the two-year state budget to a nearly $100 million deficit that will need fixing.
Speaker John Arch of La Vista identified the state budget as the top issue of 2025 before the session began, and he has said it again will be top of mind in 2026.
Arch had told his colleagues to prepare for and be mindful if there is an economic shift before 2026, notably in state receipts or via the federal government.
Those urgings came before the latest state projections and before Congress passed President Donald Trump’s “one big beautiful bill” that could cut Nebraska’s share of Medicaid dollars and Supplemental Nutrition Assistance Program (SNAP) benefits.
Gov. Jim Pillen, who, along with all of Nebraska’s congressional delegation, supported the federal bill, has said the state is “prepared” if federal funding stalls or slows, which he called “our job.” But he has taken a different approach than recent GOP governors in trying to draw down “more than our fair share” of federal dollars.
Also likely to be considered as part of the 2026 budget debate will be Pillen’s attempted line-item vetoes from the end of the 2025 session, the official copies of which were delivered to the wrong office in May, which lawmakers said made the attempted vetoes null and void.
Next year will also feature a new Pillen goal to state agencies under his control: Cut 10% from the just-approved $5.5 billion annual spending.
State Sen. Wendy DeBoer of Omaha had compared the budget state lawmakers approved in 2025 to the fairy tale “The Emperor’s New Clothes,” where the ruler is naked but his subjects pretend he has extravagant clothing. She said the budget, which she opposed, was “based on a number of sleight of hands.”
“It is not actually balanced,” DeBoer said in May. “We’re just making it look like it’s balanced.”
Oher 2025 items of note
Among other major legislation in 2025:
Property taxes — For the third time in a row, lawmakers rejected attempts to shift some of the burden from local property taxes onto currently sales tax-exempt goods and services. The governor has acknowledged that the failure to pass more property tax relief in 2025 could lead to increased property tax bills as lawmakers hope to address the perennial issue in 2026. In the meantime, a new School Financing Review Commission will meet and soon begin suggesting long-term solutions.
Social media and cellphones — Lawmakers approved age verification for all social media sites, beginning July 1, 2026; implemented new social media design features meant to protect children and required school districts to adopt policies with the goal of banning most student cellphone use on school grounds. The creation of child sexual abuse material using artificial intelligence will also soon be prohibited in the state.
Juvenile justice — A broad “public safety” package included a bill from State Sen. Merv Riepe of Ralston, at the request of Gov. Jim Pillen, to allow the detention of younger juveniles, as young as 11, down from 13. All temporary and alternative placement options must be exhausted before a child aged 11 or 12 can be detained.
Legislative oversight — A new legislative division and committee was created in a multiyear standoff with the executive branch over legislative oversight of child welfare and corrections.
School retirement — Questions over whether the state should continue contributing to public employees’ retirement funds when obligations are fully funded came to a head with the Governor’s Office fighting with the Nebraska State Education Association and a flareup among Lincoln lawmakers. In the end, school employees received a benefit if obligations are nearly or fully funded, leading to more take-home pay in the upcoming year and a smaller cost for the state.
A new state department — Beginning July 1, the Nebraska Department of Water, Energy and Environment was established from the merger of the former Nebraska Department of Natural Resources and the former Nebraska Department of Environment and Energy.
— Nebraska Examiner reporter Zach Wendling
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