NEBRASKA LEGISLATURE
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Sen. Curt Friesen

Sen. Curt Friesen

District 34

The content of these pages is developed and maintained by, and is the sole responsibility of, the individual senator's office and may not reflect the views of the Nebraska Legislature. Questions and comments about the content should be directed to the senator's office at cfriesen@leg.ne.gov

Fall Legislative Update

November 22nd, 2017

With harvest completed and, as hard as it is to believe, the end of the year in sight, I thought it would be a good time to talk about some on-going issues and look forward to the next legislative session which convenes on January 3, 2018.

Many of you have expressed your concerns over the limited availability of reliable, affordable broadband service, especially in the rural portions of the state. In a number of places, even if service is available, it is slow and struggles to meet the demands of today’s modern technology. I see this as a tremendous problem not only for individuals who need ready access to the Internet but for our communities as they try to attract new businesses and keep the ones they have.

The Transportation & Telecommunications Committee, which I chair, will be holding several hearings in November and December to talk about broadband issues. The hearings are intended to gather information about things as they currently stand, and perhaps more importantly, to get ideas and suggestions from the public about how we can move forward creating the capacity that we need. With government dollars tight, we have to come up with innovative strategies on how the public and private sectors can work together to meet this challenge.

Hearings will be held in McCook on November 28, Central City on November 30, and Lincoln on December 1. The hearings are open to the public and I encourage you to come and give us your thoughts or just come and listen. The times and locations for the hearings are posted on my legislative web page.

The biggest issue facing the legislature continues to be the state’s fiscal condition. Much of the 2017 legislative session was devoted to budget issues and the 2018 session is shaping up to be more of the same.  Revenue receipts are significantly below projections and with the ag sector still depressed that is unlikely to change anytime soon. This shortfall almost certainly means additional and sometimes unpopular budget cuts ahead.

I am still committed to fighting for property tax relief as I have been throughout my previous three years in the Legislature. Last session I introduced several bills to cut property taxes which unfortunately did not advance. There is a slim chance some of these bills may come up again next year but I am also considering additional legislative options to introduce in 2018.

In conclusion I want to tell you what a great privilege it has been to serve as your state Senator. The time since my election in 2014 has flown by. I think there is still important work to be done and I have decided to run for reelection in 2018.

One of the things that has surprised me as I think back over my time in the Legislature is how often policy decisions are influenced by emotion rather than facts.  As I decide how I’m going to vote on an issue I try to stay focused on the facts and what I believe will be good for my constituents and the state.  I think that’s what you sent me here to do. I really appreciate it when you take the time to let me know your opinions on the issues with which we are dealing.  Your input is an important factor in my decision making.

From time to time people ask me why I decided to run for office in the first place. What I tell them is that I firmly believe that complaining in the coffee shop rarely results in meaningful change. If you want things to change you can’t stay on the sidelines and wait for someone else to do it. I saw some important policy issues that weren’t being addressed such as how to fund our public schools in a more fair and equitable way and rather than complaining about it thought I would try to do something about it. I wanted to be a strong voice for rural Nebraska. Thank you for that opportunity.

In December I will be working on bills to introduce when we convene in January.  If you have any ideas for legislation please contact me or my staff.  My email address is cfriesen@leg.ne.gov and our telephone number is 402-471-2630.

Broadband Access Public Hearings

November 15th, 2017

The Transportation & Telecommunications Committee will hold the following public hearings on broadband access in Nebraska:

November 28   —   McCook, NE

Location:   McCook Community College Student Union – 1205 East 3rd Street

Time:         1:30 PM

 

November 30  —  Central City, NE

Location:  City Council Chambers – 1702 31st Street

Time:       1:30 PM

 

December 1   —   Lincoln, NE

Location:  Nebraska State Capitol – Room 1113

Time:       1:00 PM

 

Summer Update

July 18th, 2017

With the beginning of the school year less than a month away and summer rapidly winding down, I thought it would be a good time to give a brief update on some of the things that have happened since the Legislature adjourned at the end of May.

I must admit I was definitely ready for a little down time from politics. The final weeks of the last legislative session were grueling, to say the least, as we debated the budget for the next biennium. Faced with the reality of the state’s increasing revenue shortfall, we had to make difficult choices on spending cuts. In the end, an $8.9 billion budget package was passed by the Legislature and signed by the governor.

Final state tax receipt figures for Fiscal Year 2016-17 have just been released and continue to be down. Revenues for the year totaled $4.266 billion, approximately $34 million short of earlier projections. I still think it is unlikely we will need to convene a special session but if revenues continue to be down, it is not out of the question.

Of course even though it’s down time from politics, it’s still a busy time on the farm. I always look forward to getting back to working around the farm. Spending time by myself in the tractor is one of the best stress reducers I can think of.

My wife Nancy and I have been enjoying attending some of the many parades, city celebrations, and county fairs throughout District 34 this summer.  As part of the Hall County fair, I had my first opportunity to take part in a watermelon eating contest. Competition was fierce, especially between my team and that of Senator Dan Quick of Grand Island. In the end our two teams tied for first place. Senator Quick and I have agreed to share the first place trophy; it will be proudly displayed in our offices in the State Capitol.

One of the best things about getting out into the communities is having the chance to talk with constituents. If you see me at an event I hope you will come up and visit with me about any concerns you have on how things are going in the state or the district, or ideas for legislation for next session.

I am planning to be at the Nebraska State Fair at the end of August and encourage you to stop by and say hi.

After Labor Day the Transportation & Telecommunications Committee will start holding hearings on our interim study resolutions. My top priority is how to improve broadband telecommunications services in the state. We are planning to hold several public hearings outside of Lincoln to get input on this critical topic. I am especially interested in finding ways to incentivize private industry and/or public-private partnerships to deliver more and better services to rural areas. Hearing dates and locations have yet to be determined.

Over the summer I will be attending several out-of-state legislative conferences including the Midwest Council of State Governments conference in Des Moines and the American Legislative Exchange Council (ALEC) conference in Denver. Conferences such as these are excellent sources of information on current trends in state government and public policy issues. In addition, they provide an opportunity to informally network with legislators and policy makers from similar states to discuss like problems and creative solutions.

As a reminder, even though the Legislature has adjourned for the year my office in the Capitol is open weekdays from 8:00 a.m. to 5:00 p.m. Please feel free to contact me and my staff about your legislative concerns or other issues you would like to discuss. My email address is cfriesen@leg.ne.gov and our telephone number is 402-471-2630.

Weekly Column

May 22nd, 2017

Most of  the activity the past two weeks has focused on the budget. The Legislature sent its $8.9 billion, two-year budget package to Gov. Pete Ricketts for approval on May 9.

Using his line item veto power, the governor cut $56.5 million in spending. He also raised the cushion in the cash reserve to 3 percent. The Legislature had proposed lowering it to 2.5 percent.

The bulk of the cuts, $33.6 million, came from programs in Health and Human Services. The governor’s original budget proposal included 3 percent cuts in the rates paid to service providers in four areas:  Medicaid, child welfare, behavioral health and developmental disabilities. The Legislature’s budget proposal maintained provider rates at current funding levels.

Most of the remaining budget cuts came from two areas: funding for the University of Nebraska and funding for the judicial branch for probation services, juvenile justice transportation, and costs associated with the specialized court system.

The Legislature took up overriding the governor’s vetoes on May 17. After careful consideration I chose not to vote to override any of the vetoes. It was not an easy decision to make but it was one based solely on my belief that lowering spending is absolutely necessary to keep the state on sound financial footing.  Around 4 percent of our current budget is made up by one time cash transfers that we will not be able to do again, at least not anytime soon.

During the Legislature’s initial budget debate several other senators and myself decided that we simply could not support the budget without spending cuts. I wish we had been given other options for cutting the budget but these were the choices presented to us.

I recognize these particular cuts will be unpopular with some. With a $303,768,166 two year budget the veto cuts the HHS budget by $3.2 million per year, around 2.1 percent. I was given assurances by the executive branch and the Department of Health and Human Services that through spending efficiencies and reallocation of funds current services will not be hurt.  I have every intention to see that that is the case.

The unpleasant truth is we’ve got to reduce spending. I don’t see a significant increase in our revenue stream on the horizon. Without additional revenue coming in, the only other option is to deplete our cash reserves which would be ill-advised with a great deal of financial uncertainty ahead.

If we don’t do something now to reign in our spending we are going to be in an even worse position before very long. While painful, it will be much easier to make small cuts now which can be absorbed over time rather than reach a point where we have to make larger and more drastic cuts all at once.

There are still a number of senators who are convinced these cuts will not be enough. They believe revenues will continue to fall and we will have to convene a legislative special session later this year and cut even more. It is my hope that what we have done will head that off.

LB496 introduced by Sen. John Stinner of Gering  also received much attention last week. The bill would have allowed villages and cities of the first and second class to use tax increment financing (TIF) to finance construction of single-family and multi-family housing as part of a redevelopment project eligible for TIF.

I was strongly opposed to the bill because it would divert property tax revenue from public schools while at the same time increasing the number of students in the district. It would also make it difficult for builders that do not use TIF to compete. I offered an amendment that would allow only the property taxes collected by the locality to be diverted for the construction of a workforce housing project using TIF. In the end the bill failed a cloture motion 32-9 and was not advanced.

The Legislature has now completed its work for the year and will adjourn Sine Die on May 23.

Please feel free to contact me and my staff about your legislative concerns or other issues you would like to discuss.  My email address is cfriesen@leg.ne.gov and our telephone number is 402-471-2630.

Weekly Column

May 15th, 2017

Last week the legislature continued working through the dwindling number of remaining bills. Although off to a slow start, as the session progressed we moved through most bills pretty quickly.

The Speaker announced that if things stay on track he expects to adjourn sine die on May 23, the 86th legislative day, rather than waiting until the scheduled June 2 adjournment date.

Two voting rights bills sparked some heated debate. Historically, in Nebraska and the country as a whole, voting rights issues have almost always been contentious and these were no exception.

LB75, introduced by Sen. Justin Wayne of Omaha, would immediately restore voting rights to those convicted of a felony on completion of their sentence or probation. Nebraska law currently requires a two-year waiting period.

The bill passed on April 24 by a 27-13 margin but was subsequently vetoed by the governor and returned to the legislature.  An attempt to override the veto came up 6 votes short of the 30 needed. The final vote was 23-23.

I voted for the bill when it was considered by the legislature and also voted to override the governor’s veto. It seems to me if someone has fully completed their sentence they should be given a fair chance to rebuild their lives in a positive way.  Immediate restoration of voting rights is one way we can send a message of support for those in an already difficult situation.

Voting rights were also the focus of legislation proposed by Sen. John Murante of Gretna. LR1CA would place a proposed constitutional amendment on the election ballot in November 2018. If approved, the amendment would require Nebraska voters to present a photo ID before being allowed to vote.

Murante argued that the ID requirement would restore voter confidence in the election process by ensuring that only those who are qualified to vote are allowed to cast ballots. Opponents contended that voter ID requirements place unnecessary burdens on many groups, would be costly to put in place, and are likely to incur legal challenges.

Ultimately, there was not enough support in the body to move ahead with the resolution. A motion to end debate and allow a vote on the proposal received only 26 votes. Thirty-three votes are needed to invoke cloture.

I think both sides of this debate make valid points. Since we already require that people have ID in many situations, adding this as a condition for voting doesn’t seem especially onerous. At the same time, I would be very concerned if this created a legitimate barrier to someone’s ability to cast their ballot.

Secretary of State, John Gale, has consistently provided assurance that Nebraska’s election system is secure and voter fraud is not an issue in the state.

In the end, it may make the most sense to allow the public to make the final decision on whether this is something Nebraska needs.

Another bill receiving a lot of attention last week was LB632 brought by Sen. Tyson Larson of O’Neill. The bill would make several changes to Nebraska’s liquor laws. A provision impacting the craft beer brewers in the state was a sticking point for some senators.

As introduced, LB632 would require all alcoholic beverages purchased for resale in the state be “at rest” in a licensed wholesale warehouse before distribution. An amendment offered by Sen. Carol Blood of Bellevue would require that a distributor take possession of the beer but not be required to transport it to a warehouse that might be hundreds of miles away. This extra step would be costly for brewers, especially those outside of Omaha and Lincoln.

I have been contacted by quite a few craft brewers from all across the state who shared in the view the original bill would have harmed the burgeoning craft brewing industry. I voted in support of both the Blood amendment and to advance the bill. The amended bill passed by a vote of 40-0.

Please feel free to contact me and my staff about your legislative concerns or other issues you would like to discuss.  My email address is cfriesen@leg.ne.gov and our telephone number is 402-471-2630.

Weekly Column

May 1st, 2017

Last week the legislature began the difficult task of coming up with a budget for the FY 2017-18 / FY 2018-19 biennium.  While never easy, this year’s deliberations are especially challenging given the budget shortfall resulting from lower than expected revenue growth.

Over the past 35 years revenue has grown, on average, approximately 4.9 percent per year.  FY 2015-16 saw an increase of only .3 percent and  and only 1.3 percent in FY 2016-17.  This averages out to about .8 percent per year over the two year period. At the same time, spending increased an average 3.7 percent per year.

As it currently stands, even though revenues are down significantly, the state will still take in more money than last year. While many program areas will see some decreases, there will not be across the board budget cuts. Total spending will increase by approximately .4 percent in FY 2017-18 and 1.1 percent in FY 2018-19.  TEEOSA school aid will increase by an average 2.4 percent per year and funding for Correctional Services will increase by an average 2 percent per year for the biennium.

The Appropriations Committee was faced with many hard choices when they put together their budget recommendations.  In addition to taking over $248 million out of the state Cash Reserve Fund, the “rainy day fund,” one of the sources they turned to for help with closing the revenue gap was to “sweep” the money out of the cash funds of almost fifty boards, agencies, and programs and transfer it into the state’s General Fund.  In total about $207.6 million will be redirected from these individual cash funds.

Cash funds are used to account for revenues such as taxes or fees paid by individuals or entities outside of government for a variety of purposes. The use of these funds is generally directly tied to the individuals or entities paying the fee or charge. Laws governing cash funds set specific uses for the funds and do not permit them to be used for other purposes. In 2009, however, the legislature added transfers to the state General Fund as one of the authorized uses for many cash funds.

I strongly disagree with pulling money from cash funds and diverting it from the purpose(s) for which it was intended.  It amounts to unilateral policy making by the Appropriations Committee if it can decide, on its own, that funds specifically collected and set aside for one purpose can instead be used for something else.

As Chairperson of the Transportation & Telecommunications Committee I was especially concerned by transfers of cash funds from three agencies under the purview of my committee:  the Department of Roads, the Public Service Commission, and the Department of Motor Vehicles.

The Department of Roads is taking one of the biggest hits of any agency.  The Department of Roads Operations Cash Fund is scheduled to lose $30 million over the two-year period.  The bulk of the money in the fund comes from fuel taxes and is designated specifically to support the activities of the Department of Roads including new construction and maintenance.  The department’s Motor Fuel Tax Enforcement & Collection Fund will lose $1.2 million.

The Public Service Commission will lose $600,000 from the Enhanced Wireless 911 Fund which was established to provide enhanced 911 service throughout the state and is funded by surcharges on telephone lines. Another $1.3 million will be taken from the Universal Service Fund.  The fund is to be used to help provide universal telecommunications access to all persons in the state.  The money comes from a surcharge on the intrastate portion of phone bills.

The Department of Motor Vehicles will lose a total of $2.25 million from three funds: the Department of Motor Vehicles Cash Fund, the Ignition Interlock Fund, and the Nebraska Motor Vehicle Industry Licensing Fund.

But my greater concern is that this is missing the real problem – spending. Whether it’s the right or the wrong thing to do, using cash funds is a one-time partial fix. If revenues stay flat, or decrease, we will have even bigger problems two years down the road and fewer resources to address them.

Additional cuts may still be coming.  At its meeting on April 26, the economic forecasting board decreased its revenue projections by an additional $55 million, bringing the total budget shortfall to over $955 million.

Please feel free to contact me and my staff about your legislative concerns or other issues you would like to discuss.  My email address is cfriesen@leg.ne.gov and our telephone number is 402-471-2630.

Weekly Column

April 24th, 2017

Education bills occupied much of the debate last week. LB 409 introduced by Sen. Mike Groene of North Platte would adjust the state’s school funding formula to better align with current budget projections and  LB 512, an omnibus bill introduced by the Education Committee, contained provisions from several bills ranging from how technology companies can use student information to  how to fund voluntary termination agreements for teachers and school administrators.

LB 409 would change both the base limitation rate and the local effort rate when determining state aid to schools. The base limitation rate is the rate at which school budgets are allowed to grow from year to year. The rate is currently 2.5 percent but the bill would reduce the rate to 1.5 percent for school fiscal years 2017-18 and 2018-19.

The bill would also increase the local effort rate to $1.02. The local effort rate is set by state statute and is the rate which, when multiplied by the total adjusted valuation of all taxable property in a school district receiving equalization aid pursuant to TEEOSA will produce the amount required to support the total formula need of the school district when added to state aid appropriated by the Legislature and any other receipts.

An amendment to the bill, would calculate net option funding, state funding for educating students who exercise the option to attend a school outside their home district, by multiplying the net number of option students by 95.5 percent of the statewide average basic funding per student for those years. The bill was advanced to select file by a vote of 38-0.

LB 512, the Education Committee’s omnibus bill, incorporated provisions from six bills:

  • LB 512, the underlying bill, would make minor technical changes to current statutory language.
  • LB 123 (Pansing Brooks) would authorize the Coordinating Commission on Postsecondary Education to assess a fee on for-profit post-secondary institutions in the state with the money going into a cash fund to be used to reimburse students for lost tuition and fees if the institution closed.
  • LB 175 (Morfeld) would prevent companies that contract with schools from using student data to target advertising or for other non-educational purposes.
  • LB 235 (Walz) would change some of the provisions for grantees receiving money under the Summer Food Service Program and the total amount of funds available for the program.
  • LB 398 (Wayne) would require certification of swimming instructors and lifeguards at swimming pools located inside a public school and also require that certified swimming instructors and lifeguards be present during public school swimming activities.
  • LB 457 (Briese) would remove a budget and levy limitation exemption for the money a school district agrees to pay teachers and administrators in exchange for voluntary termination of employment. School districts sometimes use such payments as a tool to encourage older higher paid teachers to retire early making it possible to hire more teachers at the lower end of the pay scale.  Some school districts have spent over four million dollars for separation agreements.

All but one of the components of the omnibus bill were noncontroversial and elicited little discussion. The Briese bill was of concern to some senators especially Omaha Sen. Burke Harr who worried that there would be a substantial negative impact on school districts already at their maximum levy. Harr introduced an amendment to allow those districts to exempt up to $35,000 of the payment for a teacher’s voluntary termination agreement that is not part of a collective bargaining agreement. The Harr amendment was adopted on a 30-6 vote and the bill then advanced to final reading on a voice vote.

A third education bill discussed this week was LB 645 introduced by Sen. Patty Pansing Brooks of Lincoln. The bill would provide a legal definition for dyslexia. Dyslexia is included as a specific learning disability in state law but is not defined. Sen. Pansing Brooks said she introduced the bill with the hope that adding a definition to state statute would result in more attention being given to the issue leading to earlier identification of students with dyslexia and getting them the help they need.  After adding a technical amendment, senators voted 32-0 to advance the bill to select file.

Please feel free to contact me and my staff about your legislative concerns or other issues you would like to discuss. My email address is cfriesen@leg.ne.gov and our telephone number is 402-471-2630.

Weekly Column

April 18th, 2017

Two bills that garnered a lot of interest last week were LB44 dealing with collection of sales taxes for online purchases and LR6 a legislative resolution calling for a convention of the states.

Sen. Dan Watermeier of Syracuse introduced LB44 which would require that online retailers without a physical presence in the state report the names of customers and the amounts of purchases sent to Nebraska if their gross sales revenue in the state is over $100,000 or they make more than 200 separate transactions in the state that year. It is estimated this would bring in an additional $30-$40 million per year in sales tax revenue.  Currently, based on a 1992 U.S. Supreme Court ruling, a business must have a physical presence in the state before it can be required to collect state sales taxes.

The bill received enough support to advance to select file although some senators expressed concern that it would be struck down as unconstitutional.  I voted for the bill because I think it would help small retailers in the state who are disadvantaged by having to charge sales taxes when online retailers don’t.  In fact under current law, Nebraskans are required to self-report online purchases and remit sales taxes on those purchases when they file their state income tax returns but very few people actually do this.

LR6 introduced by Sen. Laura Ebke of Crete calls for holding a convention of the states as authorized under Article V of the U.S. Constitution.  The convention would be able to propose amendments to the constitution that would impose fiscal restraints on the federal government, limit the power and jurisdiction of the federal government, and implement term limits for members of Congress and federal officials.  It would not be authorized to take any additional action.

It is highly unlikely a convention will take place and even if it does chances are slim it would come up with an acceptable amendment. The framers of the constitution purposely made it difficult to amend the constitution – a two-thirds majority – 34 states – must pass identical resolutions and any proposed amendment would then have to be ratified by a three-fourths majority – 38 states.

The resolution is still being debated but I will support it if it comes to a vote. I strongly believe something needs to be done to address the growing federal debt and curb the overreach of the federal government stemming from the countless rules and regulations drafted by Washington bureaucrats.

After the Easter recess the legislature will begin debate on the Revenue Committee’s proposed tax package. LB461 as amended by AM954 is an omnibus bill containing provisions from LB337 (Smith) and LB452 (Lindstrom) relating to changes in the structure and rates of personal and corporate income taxes, LB129 (Morfeld) increasing the state’s Earned Income Tax Credit (EITC), and LB338 (Brasch) changing how ag land in the state is valued for tax purposes.

The bill would eliminate the lowest personal income tax bracket and collapse the four current brackets into three.  The highest individual income tax rate will decrease by approximately 0.1 percent per year from 2020 to 2027 thereby dropping the state’s top individual income tax rate from 6.84 percent to 5.99 percent.  If the projected rate of growth in revenue is less than 3.5 percent, the tax rate cut would be deferred and the deferral would remain in effect until the expected rate of growth exceeds 4.2 percent.

The bill lowers the top corporate income tax rate of 7.58 percent on income over $100,000. The rate will be incrementally reduced until it reaches 5.99 percent.  Reductions in the corporate tax rate would be subject to the same revenue growth rate triggers as those for personal income taxes except a 4 percent growth rate would be required.

While the majority of Nebraskans should see income tax relief, some individuals at lower income levels might not. In order to prevent any detrimental impacts on these individuals the bill will increase Nebraska’s EITC from 10 percent of the federal credit to 11 percent in 2018 and to 12 percent in 2019.

The bill will make significant changes in how ag land is valued for tax purposes and mandates that the aggregate value across all classes of land will increase by no more than 3.5 percent from the prior year.

Rather than basing valuation on the land’s market value, the new system would use an income-based valuation taking into account land’s projected income producing potential.  The new valuation would be between 55 and 65 percent of actual value for each class of land as determined by the state property tax administrator.  Valuation rate decreases will trigger increases in state TEEOSA funding.

Overall I think this is a good bill that begins the process of overhauling taxes in the state.  While my primary focus will continue to be achieving a significant reduction in property taxes on agricultural land and a more equitable approach to school funding for everyone, this is a step in the right direction. No doubt there will be a great deal of discussion and possible amendments as the bill is debated on the floor which will set the stage for tackling the budget, the next big challenge looming on the horizon.

Please feel free to contact me and my staff about your legislative concerns or other issues you would like to discuss.  My email address is cfriesen@leg.ne.gov and our telephone number is 402-471-2630.

Weekly Column

April 10th, 2017

The legislature made good progress last week advancing a number of bills from both general and select files.

The “Choose Life” license plate bill (LB46) that has consumed hours of debate time over the past few weeks passed on final reading with a vote of 38-0. The bill was signed into law on April 5th by Gov. Pete Ricketts during a special signing ceremony.

The Revenue Committee completed work on its tax reform package and sent two bills (LB481 and LB640) to the floor. It is likely to be several weeks before the bills are debated.

I think both bills will make positive and much needed changes to the tax structure in the state.  This week I am focusing on LB640 which deals with property taxes and school funding and next week I will take up LB481 which deals with a range of tax  issues including income tax rates, how property taxes are assessed, and changes to the state’s Earned Income Tax Credit.

LB640 was introduced by North Platte Sen. Mike Groene and I selected it as my personal priority bill. The intent of LB640 is to reduce the amount of property taxes going to school funding potentially reducing property tax bills, especially in areas where the property tax base is mostly agricultural land.

It is an understatement to say that the way we figure school funding in this state is complicated, confusing and hard to understand; trying to explain LB640 is much the same.  If implemented in its current form the bill would make three major changes: capping the amount of property taxes used to fund schools; lowering the maximum school district levy; and redirecting money from the Property Tax Credit Cash Fund to make up the difference and provide property tax relief.

Property taxes have always been the primary source of funding for Nebraska’s schools. Today property taxes make up between 32 percent and 80 percent of total revenue depending on the school district.  The goal is to eventually cap the property tax portion at 40 percent.

LB640 takes a step in that direction and would place a 55 percent cap on the amount that property taxes contribute to school funding. The difference between the total amount of revenue now collected and the 55 percent cap, the “property tax gap,” will be split between the state and individual school districts.

The state will contribute 75 percent of the amount needed to close the gap with money taken from the Property Tax Credit Cash Fund.  If the balance in the Property Tax Credit Cash Fund is less than the amount needed for school district relief aid, individual school district aid will be reduced proportionately.

School districts receiving aid must reduce their spending by an amount equal to 25 percent of the property tax gap unless the school board, after holding a public hearing, overrides the reduction by a two-thirds majority vote.  The 159 unequalized districts along with 26 districts that receive minimal equalization will see the biggest impacts.

Next, the bill would lower the maximum school district property tax levy from $1.05 per $100 of property value to $.987 per $100 of property value which in turn lowers the local effort rate in the TEEOSA formula.  The difference will be offset with money from the Property Tax Credit Cash Fund paid in the form of property tax relief aid to citizens in equalized districts.

The Property Tax Credit Cash Fund was established in 2007 to provide property tax relief to real property owners across the state in the form of a property tax credit and today it contains $221 million. This bill will significantly impact the fund because the money to pay for LB640 will come from redirection of those dollars.

If LB640 is implemented both urban and rural areas will feel the effects. Rural areas will pay slightly less toward school funding and receive increased state aid to make up the difference.  Urban areas will receive less in property tax credits.  While it is easy to frame changes like this in terms of winners and losers if you think about the system we have now we already have winners and losers. LB640 is not intended to benefit one area at the expense of the other, it is intended to make the system fairer for everybody while still adequately funding our public schools.

Please feel free to contact me and my staff about your legislative concerns or other issues you would like to discuss.  My email address is cfriesen@leg.ne.gov and our telephone number is 402-471-2630.

Senator Friesen will be holding a Town Hall Meeting in conjunction with the Central City Chamber of Commerce Civic Breakfast

When:          Monday, March 27, 2017                                           7:30 – 8:30 a.m.

Where:         Venture Center    —  1532 17th Avenue, Central City, Nebraska

Sen. Curt Friesen

District 34
Room #1110
P.O. Box 94604
Lincoln, NE 68509
Phone: (402) 471-2630
Email: cfriesen@leg.ne.gov
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