School districts are allowed growth in general fund expenditures between 2.5 percent and 4.5 percent. The specific limitation is determined district by district based on the spending of the local school system relative to other local systems. Local systems are Class VI or K-12 school districts combined with any Class Is for which the district is the primary high school district. Above average or average spending school systems are limited to 2.5 percent, while below average spending districts may have greater spending increases up to a maximum of 4.5 percent. The law also allows any district to increase spending by 1 percent after a special meeting and a three-fourths vote of the school board, so from a practical standpoint, the limitation is actually 3.5 percent to 5.5 percent. In 2001, 75% of the schools in Nebraska voted to access this additional 1%. Cash reserves are limited to between 20 percent and 45 percent of the general fund budget depending on the size of the school. Exceptions to the lid are for:

(a) expenditures in support of a service which is the subject of an interlocal agreement or modification of a prior agreement,

(b) expenditures to pay for infrastructure damage caused by a natural disaster,

(c) judgments, except those by the Commission of Industrial Relations,

(d) expenditures to pay for voluntary termination of employment by certificated employees, and

(e) amounts approved by a vote of the people.