Governor Dave Heineman doesn't hold back, saying the way the state funds schools doesn't work.
"This state aid formula we have is broken. Takes a CPA, lawyer, and doctor to figure out what the hell it says," he told Grand Island business leaders.
Nebraska has 249 school districts but fewer and fewer receive state money.
Heineman said, "We're about ready to go less than 100 are going to get any dollars back in state aid formula. I don't think that's fair."
Sen. Les Seiler of Hastings said in part it comes down to rising farm land values.
Farmers are paying more property taxes and that's helped small schools, so in the eyes of the state, they need less money.
But Seiler said residents in small towns feel their sales and income taxes should benefit their schools.
It's another reason lawmakers say the system doesn't work.
"It's crippled if not broken," Seiler said.
Complicating things, there aren't enough dollars to pay what schools are supposed to receive.
Seiler said, "Education is $460 million below funding of where we're supposed to be on budget so we've got to balance the budget. We've got to find $460 million or we've got to cut $460 million."
Sen. Annette Dubas of Fullerton brought up another issue with schools. She said the state has extremes.
Kids are either in small districts with only a handful of kids or attend a school in the biggest districts like Grand Island, Lincoln, and Omaha.
Dubas said, "How do you fund that diverse of an education system?"
At the same time reform the tax system
That's the challenge Nebraska lawmakers will take on in 2013.
Heineman will again push to eliminate the inheritance tax. But said the income tax is a greater concern.
He said, "This tax code we have is unfair to the middle class, unfair to small business owners, unfair to farmers and ranchers and we're going to continue to address it."
Dubas said they need to consider taxes as a whole. She said if they focus on cutting one, it could result in unintended consequences.
She said, "I think it's good we take a broad-based approach. Is has been a long time since we've done that and we need self-evaluation."
The legislative forum was sponsored by the Grand Island Chamber of Commerce.