Proposal would exempt teachers and paraprofessionals from state income tax as recruitment tool

Revenue Committee, Nebraska Legislature · February 12, 2026

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Summary

LB1206, introduced in the Revenue Committee, would exempt certificated teachers and paraeducators from state income tax to help recruitment and retention; opening remarks cited national data on teacher pay and local workforce challenges and the file shows letters both for and against the proposal.

Erica Favor opened LB1206 for Senator Juarez, describing the bill as a targeted tax-exemption designed to improve teacher recruitment and retention by expanding take-home pay for certificated teachers, paraprofessionals and related school staff.

Favor cited national data (National Education Association figures included in a handout) showing low starting salaries and a persistent teacher pay gap compared with similarly educated peers; she argued that targeted tax relief is a practical tool to make regional educator compensation more competitive and to address ongoing staffing challenges in both urban and rural districts.

The hearing record shows the bill drew significant written interest: committee staff logged 7 proponent letters and 12 opponent letters but no on-the-record in-room testimony during today's session. The committee did not hear oral proponents or opponents in the room and no vote was taken. Sponsor staff indicated they will continue outreach and provide fiscal analysis to the committee.