(AP) — Nebraska lawmakers will kick off a 60-day session on Wednesday with looming debates over taxes, the state prison system and a renewed push to expand Medicaid. It’s also the final regular session before a hotly contested governor’s race, and the last go-around for Gov. Dave Heineman and 16 term-limited state senators — nearly one-third of the Legislature.

Here are five things to keep an eye on once the 2014 session begins:

1. WILL THE STATE ENACT TAX REFORMS?

Expect another spirited debate this year over taxes in Nebraska, particularly on property and income.

Gov. Dave Heineman is promising a renewed push to cut both, with an argument that it will spur economic growth for middle-class urban families and farmers and ranchers in rural Nebraska. The Republican governor is working closely this year with business and farm groups, after his proposal last year to overhaul the state’s income- and sales-tax system was rebuffed by both.

“We’ve got a growing economy and the largest cash reserve in state history,” Heineman said in an interview last week. “The state of Nebraska is overtaxing its citizens right now, so I think the case can be made for tax relief.”

The Legislature’s Tax Modernization Committee reported in December that no major changes were needed in Nebraska’s tax system and concluded that the state is similar to its neighbors. Several members said any long-term tax-cut proposal should include a budget to specify which services will be cut to maintain a balanced budget.

2. DOES EXPANDED MEDICAID HAVE A CHANCE THIS YEAR?

Lawmakers who want to expand Medicaid in Nebraska are reworking their proposal and plan to borrow from other state plans that have won bipartisan support. But the new proposal is expected to face opposition from Heineman and a group of conservative lawmakers who say the health care law is unaffordable. Last year, the coalition managed to stall the bill with a filibuster.

Sen. Kathy Campbell of Lincoln said lawmakers are looking at new plans developed in Arkansas, Iowa, Michigan and Pennsylvania in an attempt to win some of her colleagues. Several of the proposals seek to use federal Medicaid dollars to purchase private health insurance for low-income residents.

Heineman argued last week that expanding Medicaid is still unaffordable and would drain state money that might otherwise be spent on education. The new proposals, he said, are “just another form of Obamacare.”

3. WHAT STEPS ARE PLANNED ON PRISON REFORM?

Lawmakers also plan to introduce an overhaul of Nebraska’s state prison system, partially in response to the Nikko Jenkins case in Omaha. Jenkins is accused of four Omaha-area slayings after his release from prison. He had threatened violence while incarcerated and begged corrections officials to commit him to a mental health institution. Prison overcrowding has also become a major problem.

State Sens. Brad Ashford and Heath Mello are working on alternative services to alleviate overcrowding, including increased funding for inmate supervision and supervised release.

Lawmakers are also likely to reform a Nebraska law that gives “good time” credit to state prisoners. Heineman has called on lawmakers to change the law so that violent offenders don’t receive the credit automatically.

4. HOW MIGHT TERM LIMITS AFFECT THE SESSION?

This session will be the last for 17 state senators who were sworn into the Legislature in January 2007. The Legislature has turned over several times since term limits went into effect in the prior year, and many of the new senators face a steep learning curve. This year may offer less senior lawmakers a chance to prepare for new leadership roles on committees.

The departing group includes Speaker of the Legislature Greg Adams and seven standing committee heads: Sens. Brad Ashford of Judiciary; Bill Avery of Government, Military and Veterans Affairs; Tom Carlson of Natural Resources; Annette Dubas of Transportation and Telecommunications; Russ Karpisek of General Affairs; Steve Lathrop of Business and Labor; and Amanda McGill of Urban Affairs.

In addition, the Legislature will lose Sen. John Harms, the chairman of the Performance Audit Committee, and John Wightman, chairman of the Legislature’s Executive Board.

5. WILL LAWMAKERS ENACT WATER REFORMS?

A state water-funding task force has recommended a $50 million annual investment in water conservation projects throughout Nebraska. Heineman remained skeptical in an interview last week, arguing that supporters first need to demonstrate the need for the projects and the additional taxes that could come with them.

The task force chairman, Sen. Tom Carlson, has said water sustainability in Nebraska affects the long-term health of the state.