LINCOLN — A fund marketed as a sustainable source of state aid to Nebraska’s K-12 schools is on track to be completely depleted within five years of its creation.

The Education Future Fund (EFF) was designed in 2023 to lower property taxes while supporting school districts by providing resources that weren’t covered under Nebraska’s existing school funding formula. It launched with an initial investment of $1 billion and a commitment from state lawmakers to add another $250 million each year thereafter to keep it stable.

At the time, Gov. Jim Pillen said he hoped to build the fund to approximately $2.5 billion by 2029-30, but the state is spending money faster than it can grow. After that first $1 billion investment, expenses out of the fund have far exceeded revenue transfers into it by more than $150 million each year.

The Education Future Fund is now baked into Nebraska’s current school funding formula. Among other things, EFF offers per-pupil funding primarily to non-equalized school districts and assumes a higher level of state funding for special education.

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