Bill would provide assistance to communities facing infrastructure mandates
LINCOLN, NE - State Senator Heath Mello introduced legislation Wednesday that would ease the burden facing Omaha families and businesses with the upcoming $1.6 billion sewer separation project. In addition to addressing the Omaha project, LB 682 would create a long-term financing mechanism to help all Nebraska communities finance major sewer, gas, and water infrastructure replacement projects.
LB 682, which has the support of both the City of Omaha and Metropolitan Utilities District, utilizes a sales tax turnback mechanism similar to legislation that helped fund the Qwest Center and other major projects. Under the bill, the portion of sales taxes levied on increased sewer fees for infrastructure replacement projects would be returned to the municipality or utility undertaking the project. The municipality or utility would then be required to use funds from the sales tax turnback to finance the project, reducing the necessary increase in sewer fees.
“If left unchecked, sewer rate increases necessary to pay for this project will result in a state sales tax windfall of over $48 million by 2024,” said Marty Grate, Environmental Services Manager for the City of Omaha. “These tax revenues are not in the state’s revenue projections, and we believe that the sales tax on the cost associated with the unfunded sewer mandate should be turned back to Omaha to mitigate sewer rate increases for all metro area ratepayers.”
Doug Clark, President of Metropolitan Utilities District, echoed Grate’s comments. “The citizens of Omaha are facing large increase in their utility charges, and turning back the sales tax on these fees will help speed construction of the project and put these sales tax dollars back into our local economy,” Clark said. “LB 682 isn’t just in the best interests of Omaha taxpayers, it’s in the best interest of the entire state.”
Mello, who supported previous efforts to repeal the sales tax on increased sewer fess related to the Omaha sewer separation project, said that his proposal is a truly statewide solution to an increasing problem for many Nebraska communities. “Unfortunately, Omaha is just the first of many Nebraska cities that will be forced to comply with these unfunded federal mandates to upgrade their sewer and stormwater systems,” said Mello. “LB 682 provides not only a means of helping Omaha today, but of helping communities throughout the state deal with an aging infrastructure without taxpayers bearing the brunt of this increasingly heavy burden.”
Mello also introduced LB 683 on Wednesday, a bill that would create a commission to study the economic impacts of financing mechanisms available to fund sewer separation projects. “As we go forward, we have to ensure that the impact of these unfunded federal mandates are not unduly burdensome on businesses and taxpayers in the affected communities.”
FOR IMMEDIATE RELEASE
January 19, 2011
For More Information:
Trevor Fitzgerald, Legislative Aide
(402) 471-2710
tfitzgerald@leg.ne.gov