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Sen. John Kuehn

Sen. John Kuehn

District 38

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As the only one-house state legislature in the nation, Nebraska’s legislative branch of government functions very differently from the other 49 states. Senators are elected on a non-partisan basis, with open primaries advancing the top two candidates regardless of their party affiliation. With no “majority party” or “minority party” structures established in the legislative rules, political party registration does not play any official role in the internal organization of the Legislature, its committees, or its leadership.

Having only a single chamber based solely on population fundamentally changes the political dynamic in Nebraska compared to other rural states. Despite agriculture being the largest industry and economic driver of Nebraska, lawmakers outside of Douglas, Sarpy, and Lancaster counties are a minority in the legislative process. It is expected that the number of seats representing greater Nebraska will shrink by two in the redistricting following the 2020 census. Without a geographically based chamber, like the senate in most states, to balance the population based chamber, there is less incentive to cooperate on legislation of common interest to the state as a whole. The legislative paralysis on funding for rural schools and the Ag land property tax crisis demonstrate the practical reality of a single, population based legislature.

The structure, both operationally and electorally, of the other two branches of Nebraska state government also differ from many other states across the nation. In other states some agency directors are elected on a statewide partisan ballot. Most notable is the election of the Director of Agriculture in our neighbor Iowa. Constitutional officers also vary. For example, the state of Kansas does not have a State Auditor.

The widest variation in the executive branch among the states is found in the office of the Lieutenant Governor. In Nebraska the Lieutenant Governor is selected by the candidate for Governor before the general election and the two appear together on the general election ballot as a ticket. Nebraska is one of only six states that follow that process.

Five states, including Wyoming, do not have a Lieutenant Governor. In Tennessee and West Virginia the office is filled by the president of the state’s Senate, who is elected by the state senators from among their own. In 18 states the Lieutenant Governor and Governor are elected separately, allowing for the possibility of members from different parties or political adversaries to be elected to the two roles. In eight states, the Lieutenant Governor is selected by voters in a separate primary election rather than selected by the gubernatorial candidate, and then the two run jointly as a ticket during the general election. Seven states require the Lieutenant Governor candidate to be selected prior to the primary election and appear on the ticket with the gubernatorial candidate. In four states, including South Dakota and Iowa, the Lieutenant Governor is selected by the major political parties at their state convention rather than through a primary or gubernatorial selection process.

Within the judicial branch, the “Nebraska way” is not universal. In Nebraska a judicial nominating commission advances a slate of nominees to the Supreme Court. The Governor selects a justice from among those on the list. The six associate justices are appointed based on geographic districts, while the chief justice, a position held for their entire tenure on the court, is drawn from a statewide pool. In contrast, the Supreme Court justices in a number of states are elected by popular vote of the electorate. Some are based on party registration, others on a nonpartisan ticket. Within the court, terms in office, term limits, and age restrictions vary widely from state to state.

Learning from the successes and challenges of other states is helpful to improve the effectiveness of Nebraska government. It is all too easy to get caught in a closed mindset, assuming the way things are done in Nebraska is the only way. Periodic assessment of what is working well and a clear-eyed assessment of what is not is essential to the democratic process.

When Nebraskans adopted the model of the Unicameral Legislature in 1934, one of the principal arguments in favor of the change was legislative efficiency. George Norris found the bicameral system particularly inefficient. The timing of the ballot initiative has also been credited with the adoption of the Nebraska unicameral experiment. The failure of the 1933 Legislature to address prohibition, tax reform, and appropriations “left a generally bad impression” among Nebraskans. Voters, facing the financial pressures of the Great Depression, demanded efficiency from state government and expected a responsive and adaptive legislature.

With striking echoes of the upheaval that led to the creation of the unicameral system, Nebraskans again express extreme frustration 85 years later at the failure of the Nebraska Legislature to address tax reform and many other issues. At the root of much of the legislative inaction is the increased use of the filibuster as a tool for obstruction of the legislative process by a minority of senators. Nebraska would be wise to look to the example of other states that effectively use the filibuster in moderation through common sense rules that require professionalism of the legislators engaged in the political tactic.

You won’t find the word “filibuster” in the Rules of the Nebraska Legislature. The term is used to describe a political tactic to extend debate with the intention of preventing a vote on a bill. Using various procedural motions, senators consume legislative time allocated to the floor debate of a bill, thereby preventing an up or down vote on the merits of the legislation. In order to overcome a filibuster, a cloture motion, which is a motion to cease debate, must pass. In Nebraska, a cloture motion requires a two-thirds majority vote in the affirmative, or 33 of the 49 senators voting to cease debate and vote on the underlying bill.

As a political tactic, the filibuster is as old as the reign of Julius Caesar. Cato the Younger exploited the rule that all business before the Roman Senate must conclude at sundown, debating an issue to the end of the day and preventing action. The filibuster is a controversial hallmark of the U.S. Senate. Most states have some form of extended debate, although the rules vary not only between states but often between the Senate and the House of a state.

Extended debate and the use of the filibuster is an important tool to allow minority interests in the Legislature to be heard. However, the purpose of extended debate in a legislative body is to allow the minority extra time and debate to make its perspective known, and, in doing so, attempt to convince the majority of its position. In a representative democracy, the ability of the minority to obstruct the will of the majority after having additional hours to present their case to fellow lawmakers and the public is nothing short of undemocratic.

Almost all states that permit extended debate have strict rules of conduct for lawmakers wishing to employ the tactics of the filibuster. Most common is enforcement of rules that require the discussion during the filibuster be germane to the legislation at hand. In many states, debate is ceased if legislators deviate from strict focus on the bill as few as three times. In Texas, legislators can’t eat, drink, use the restroom, sit, or even lean against their desk during a filibuster.

In most states, debate is not allowed to become overly personal. Members often are not allowed to refer to each other by proper name, and references to the executive branch, judicial branch or the actions thereof usually are not allowed. Indecent language and disorderly words are prohibited by most other states. If you have tuned in to the legislative coverage during a Unicameral filibuster, you know that is not the case in Nebraska, where debate meanders far off topic and the time is often filled with personal attacks against others in Nebraska government.   

Among states that permit procedural execution of the filibuster, all have a mechanism for permitting a vote to end debate. Known as cloture, Nebraska has the highest threshold in the nation for ceasing extended debate. While most states require a simple majority of lawmakers voting or a three-fifths majority of elected members, Nebraska requires a two-thirds affirmative vote of the entire legislature. This threshold is higher than even an override of a gubernatorial veto. The wording of a cloture motion under Nebraska Legislative rules is “full and fair debate”, an inaccurate statement since most of the debate in the dozens of filibusters during my four years in the legislature was not germane to the bill on the agenda.

Nebraskans would be wise to carefully examine the rules in practice in the forty-nine other states that effectively protect the ability of minority interests to be represented without the needless gridlock experienced in Nebraska. When the 1933 Nebraska Legislature failed to adapt to the needs of Nebraskans, it spurred a successful ballot initiative intended to improve the efficiency of state government. If the Nebraska Legislature continues to be stalled on important tax reform and spending provisions by the obstruction of a small minority, citizens may need to look to history as a path toward a more effective legislative future.

States across the country grapple with many similar issues. State governments nationwide attempt to spur economic growth, develop stable education funding policies, address access of vulnerable citizens to health care, and enhance their transportation infrastructure. Revenue volatility has been recognized as the “new normal” for state governments big and small, as well as rural and urban. Every state is attempting to develop reasonable tax policies and stable funding for vital state programs.

The federal system in the United States empowers states with the autonomy to develop solutions independently and tailored to their state. In 1932, U.S. Supreme Court Justice Louis Brandeis famously wrote a “state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.” As “laboratories of democracy”, states across the nation are developing and implementing new and innovative approaches to issues that face many legislatures.

During my time as a state senator I have had the privilege to meet, collaborate, and share ideas with other state legislators throughout the Midwest and across the country. I have been a presenter on livestock policy at the national meeting of the State Ag and Rural Leaders and invited to a roundtable on innovative drug access at the Biotechnology Innovation Organization International Meeting with the National Conference of State Legislators, among others.

I have been particularly active in the Council of State Governments, both within the Midwest region and nationally. I currently serve as a member of the national Shared State Legislation Committee (SSL) for CSG. Each year the committee produces a docket of legislation that is made available to legislators and bill drafters across the country. Bills are proposed by state legislators nationwide for inclusion in the SSL docket. The committee evaluates each bill and discusses it before deciding whether or not to include it in the national publication.

The criteria we use to evaluate each proposal reflects the intent to disseminate the best outcomes from the 50 state laboratories of democracy. For inclusion, the bill must address a current state issue of national or regional significance, provide a benefit to bill drafters, and provide a clear, innovative, and practiced structure and approach. Through creation of the volume, CSG is able to provide the benefit of experience and expertise from states across the nation to every legislator in the country. There is no need to “reinvent the wheel” for complex issues.  Unlike “model legislation” developed by special interest groups to achieve their political purposes, the SSL docket is developed by legislators with the sole purpose of sharing ideas and strategies with their colleagues. During my years on the committee, I have been able to sit down at a table with my peers from across the country work through hundreds of innovative pieces of legislation.

Following each meeting of the group, I am struck by two things. First, states as diverse as Florida and Nebraska face many of the same challenges. Citizens have ever increasing expectations of their state governments, regardless of population size, location, or demographics. Second, Nebraska’s structure of state governance is very different from most states in a number of significant ways. While most obvious is that we are the only one-house state legislature, there are a number of striking differences in how state government is organized in Nebraska.

Over the next few weeks I will be writing about some of the unique structural aspects of Nebraska state government.  In some cases, these differences provide a distinct advantage. In others, they prevent vital collaboration and information sharing that is needed to address complex state problems.

Compared to many states, participation by Nebraska senators in regional and national legislative groups is relatively low. That is a missed opportunity for Nebraska. If more senators listened and learned from our colleagues across the country, we would not find ourselves stuck on high center on so many important issues. Voters want their health care providers, engineers, and teachers to be up to date on the most current facts and information in their fields. I suspect they expect their lawmakers to be equally as proficient.

Public hearings are an important part of the legislative process. In Nebraska, every bill that is introduced must have a public hearing. The hearings allow every citizen the opportunity to provide their insight and expertise to legislators, as well as give voters the chance to voice their opinion on legislation directly to senators. However, bill hearings held during the legislative session are not the only public hearings conducted by the Legislature.  Although the Legislature is not currently in session, hearings on Interim Study Resolutions are currently underway. You can find the list of the public hearings, including their topic, date, and time on the Nebraska Legislature website.

Interim Study Proposals are introduced by senators or standing committees during the legislative session. Designated with the “LR” prefix, each study is referred to one of the standing committees using the same criteria when referencing legislation. Following adjournment of the legislative session, legislative staff and committees begin working on the various study topics introduced. Committee Chairs prioritize the resolutions assigned to their committee and determine whether a public hearing will be held. This year 109 different studies were introduced.  A full list of the interim study resolutions and their full text is available on the homepage of the Nebraska Legislature’s website.

Interim studies vary significantly in their depth and purpose. Studies introduced this year include examination of specific statutes or programs, such as the Property and Casualty Insurance Rate and Form Act and the One-Call Notification System Act. Others are more general in nature, like the availability of the affordable housing or the school finance structures. Interim studies tend to be political, rather than objective, in nature. They should not be confused with a Performance Audit, which is an objective study of a legislative program with defined standards for analysis conducted by trained professional auditors. Legislative staff, which may or may not have expertise in the specific topic being addressed, are typically responsible for the research and production of the interim study report.

Public hearings are not required and are at the discretion of the chair. Whether or not the hearing will be open for public testimony is also at the discretion of the Committee Chair. Frequently, hearings are conducted with invited testimony presented by special interest groups with a specific interest in the study topic. The purpose of a study is as variable as their specificity. Interim studies can be used to research future legislation, providing an opportunity to identify stakeholders that may engage on an issue. They may also examine a concept that failed to advance in a prior session, helping to refine and improve legislation for future years.

While Legislative Resolutions and their associated interim studies do not result in a change in policy or law, they are worthy of public attention. Interim studies are frequently cited in bill hearings and during floor debate of bills. The scope and topic of studies provide insight into the interests of individual senators, as well as the priorities of Committee Chairs. Most important, interim study topics frequently appear as bills in subsequent sessions.  

If you have an interest in any interim study topic and would like to submit comments or participate in the hearing, please contact my office for assistance.  Citizen engagement in all of the public hearings is important.


The legislative, executive, and judicial branches in Nebraska function through a system of checks and balances. Nebraska law outlines the procedures by which one branch of state government can check the actions of another, ensuring compliance with the Constitution and laws of the state through accountability.

Thousands of your tax dollars are paying private attorneys as some state senators seek to obtain a judicial ruling that Nebraska state senators and their staff have absolute immunity from legal action. If successful, the legislative branch would not be subject to any injunction or oversight by the courts should the Unicameral break the law. I oppose these efforts and believe elected officials and their staff should be subject to Nebraska law. Nebraska voters expect state senators to follow state law and be subject to the same checks on power as other branches of government.  

On the last day of the legislative session Judiciary Chairwoman Laura Ebke brought a subpoena request from seven members of the Judiciary Committee to the Executive Board for approval. In the request, Senator Ebke sought authorization to subpoena Corrections Director Scott Frakes to a hearing called by the Judiciary Committee. At the time of her request for subpoena, Director Frakes had not even had an opportunity to respond to her request that he appear before the committee. The hearing in question was not the product of an investigation authorized by the Legislature, but rather requested solely by the Judiciary Committee. Five of the eight members of the Executive Board voted to authorize the subpoena.  

Under Nebraska Law, specifically Section 50-406, the Legislature has the ability to issue a subpoena to compel testimony to exercise oversight. The opening section of the statute states clearly: “In the discharge of any duty imposed by the Legislative Council, by statute, or by a resolution of the Legislature” a committee may issue subpoenas with approval of the Executive Board. A committee cannot exercise subpoena power in an investigation or hearing unless the investigation itself has been authorized at some point in time by a majority vote of the entire Legislature.

The logic is clear. A rogue committee and a small group of senators should not be able to launch an investigation and gain authority to issue subpoenas without the knowledge and consent of the Legislature as a whole. As is seen in this case, only 11 of the 49 senators among two committees have been able to exercise the subpoena power and drag the Nebraska taxpayer into legal proceedings.

The Attorney General, in an unprecedented move, filed a motion to quash the subpoena on the grounds that it was not issued in compliance with state law. Executive Board Chairman Dan Watermeier and Judiciary Chairwoman Laura Ebke, without a meeting of the Executive Board, filed a countersuit, claiming absolute immunity for the Legislature from legal action. District Court Judge Lori Maret agreed with the Attorney General that the subpoena was not in compliance with Nebraska statute 50-406 in a ruling on August 8 and quashed the subpoena.

In a motion that passed only with a simple majority of five votes, the Executive Board of the Legislature has now filed an appeal to the District Court ruling, again arguing absolute immunity for legislators. The foundation for their assertion lies in the Speech and Debate Clause of the Nebraska Constitution, found in Article III Section 26. The Constitution reads: “No member of the Legislature shall be liable in any civil or criminal action whatever for words spoken in debate.”

As Vice Chairman of the Executive Board and governing committee of the Legislature, I am one of the fifteen senators named as defendants in the legal action brought by the Attorney General that the Legislature is currently appealing. However, I did not vote to authorize the illegally issued subpoena that is the initiating cause of the lawsuit, nor have I voted to authorize the legal challenge and current appeal. It is my strong conviction that members of the Legislature, acting in their official capacity, must follow state law when exercising their oversight function.

Constitutional protection for senators to be able to speak freely in the course of debate without fear of legal action for their political viewpoint is appropriate, and even essential for free government. However, no member of the Nebraska government should be immune from following the law. A legal argument that Legislative Committees cannot be held accountable by the courts for failure to follow the law does not align with the principles of transparent, accountable government. These five individuals, a small minority of senators, are using your tax dollars in an attempt to use the courts to prevent you, the voters, from being able to place any check on legislative power. Everything about this countersuit and appeal is wrong–what it seeks and how it was authorized–and I will continue to fight it.

For centuries psychics and crafty showmen have been exploiting a psychological phenomenon known as the “Forer Effect” to take advantage of unsuspecting marks. Vague, general statements are made to an individual under the guise that they are specific to that person. In reality, the statements are so broad they could apply to anyone and any circumstance, as they target universal human qualities we all value. Due to their open ended nature, each person interprets the comments based on their own experience and values, giving it their own meaning. The statements are perceived to be true, even though they are mere platitudes.

Legendary showman P.T. Barnum so successfully used the phenomenon to dazzle patrons at his circus shows that “Barnum Statements” is the term applied to the use of such comments. Horoscopes and mediums use Barnum Statements to exploit the Forer Effect and make their random, generalized predictions appear precise and targeted.

With two months remaining until the General Election, candidates for elected office are making their promises to voters. Special interest groups are using op-eds and community meetings to advance their agendas. In the coming weeks, your mailbox will start to fill with these messages. By November, you will not likely be able to listen to the radio or watch the evening news without being bombarded by campaign promises. Scrutinize them carefully.  Don’t find yourself the target of a Barnum Statement.

Like late night infomercials that promise quick, easy solutions for your weight, your acne, and your bank account, there are no shortage of bold promises to fix property taxes, college tuition, and your health care costs. As a voter, dig deeper. Ask candidates to identify specifically how they will approach each of these issues. Nobody expects a candidate to have all the solutions, but their responses will give you, the voter, a better sense of what they believe and how they will vote in office than any campaign mailer full of generalized statements ever will.

Specifically, I hear a lot of promises for increased spending for virtually every government program. Few things make a voter feel heard and valued more than a promise for more money coming to their favorite cause or interest. Like Oprah Winfrey enthusiastically moving throughout her audience, candidates love to proclaim: “You get more school aid! And you get free health care! And you get workforce housing! And you get economic incentives! And you get new roads! And we ALL get property tax relief!”. Unlike Oprah’s generosity, which was funded by advertisers and not the audience members who received the gifts, the bill for generous political campaign promises gets paid by you, the taxpayer.

Voters need to ask themselves what they are willing to pay from their pockets for each of the expanded services promised to them. Local journalists need to ask the follow-up questions and press candidates and interests groups to be specific about their approach. Everyone should be asking the “who” and “how” the state will pay for “solutions”. As well-crafted Barnum statements, campaign promises appeal to the desire all of us have to make Nebraska better. However, effective government must be more that the same principles that guide horoscopes and circus tricks.

California State psychology professor Michael Birnbaum is a leading researcher of the Forer Effect and Barnum Statements. His work focused widely on why people fall prey to these cons when they can be so readily exposed. His admonition for those who may find such showmanship entertaining is good advice for taxpayers this election season.  Professor Birnbaum said: “Be skeptical and ask for proof. Keep your money in your wallet, your wallet in your pocket, and your hand on your wallet.”


I collect quotations and passages. Usually scribbled on a scrap of paper when first encountered, they find their way into decor in my home and office, tucked into books to be found years later, and even into a Google Doc that is a running “cut and paste” of bits of wisdom I accumulate for some unknown future reference. Walking from my desk to my kitchen for a coffee refill while writing my column for this week, one such passage I had crafted into a wall hanging captured my attention.

Last week I wrote about the tax incentives report released by the Nebraska Department of Revenue. The report laid out the fiscal details of one of the most discussed programs of state government, the Nebraska Advantage Act, and its companion corporate incentive programs. State law requires a public hearing of the members of the Appropriations and Revenue Committees to answer questions and provide context to the data. My intention was to follow last week’s rather long and very data heavy column with context and specifics gleaned from the public hearing.

However, the hearing did not provide any information that could not be obtained by simply reading the report. Senators, including myself, asked a few questions about items not included, and the Department of Revenue will provide written follow up in the coming weeks. Some senators had read the report in detail, while it was not apparent others had. It was obvious that some senators did not have a command of how the incentives programs that were the subject of the hearing even work.

Nebraska’s corporate tax incentive programs are significant by any measure. With $905 million of state tax credits earned, over $6 billion in personal property exempted from taxation, and a projected net loss of $996 million to Nebraska taxpayers by 2027, these programs should command intense scrutiny and public attention. We have no evidence to support the claim that the programs advance Nebraska, and attempts to collect that evidence have faced opposition and apathy. There has been talk about improvements and changes to the programs during my entire term in the Nebraska Legislature. All the talk has yielded little result. My struggle comes in how to provide greater context and insight about these programs that is of value to taxpayers who read this column.

The passage on my wall that caught my attention while writing this column about the tax incentives hearing has been with me since 1994 when I printed it with my dot-matrix printer and posted it on my dorm room wall. When the edges became tattered, I mounted it into a frame, and it has accompanied me everywhere I have lived for the past 24 years.

For my 20th birthday, a friend gave me a copy of Robert Pirsig’s 1974 book “Zen and the Art of Motorcycle Maintenance”. Written as a fictionalized autobiography with diversions into some philosophical discussions, the book isn’t a quick read and didn’t teach me anything about motorcycle mechanics. Nevertheless, it has become one of my favorites. Like the book’s narrator, I too take great interest in knowing the specifics and details of how things work. In contrast to those who think in broad strokes and themes, I want to take things apart and see how they are made.

The policy of tax incentives is based on noble themes. “Economic development” and “business growth” are laudable goals that are difficult to disagree with. I, however, cannot help but want to pop the hood and look deeper into how the programs work. It is a source of frustration for me when others do not have the same desire to dig down into the specifics. To my mind, even the best intended public programs require scrutiny and attention to the details of their operation. But, like the narrator in “Motorcycle Maintenance”, I have come to realize there is a sharp distinction between those like me who crave to know the inner workings and those who have no interest in knowing them at all. Politics and political messaging does not lend itself to the details, but rather the best sound bite or slogan sways public opinion.

I close with my favorite passage from Pirsig’s book, the one that I have kept on my wall for the past 24 years and caught my attention when writing this column. It has greater significance to me based on my experience in state government. As you think about the myriad of programs that government operates, including corporate incentives, it may resonate with you as well.

Pirsig writes: “If we are going to reform the world, and make it a better place to live in, the way to do it is not with talk about relationships of a political nature or with programs full of things for other people to do. That kind of approach starts at the end and presumes the end is the beginning. Programs of a political nature are important end products of social quality that can be effective only if the underlying structure of social values is right. The social values are right only if the individual values are right. The place to improve the world is first in one’s own heart and head and hands, and then work outward from there.”


Each year the Nebraska Department of Revenue submits a report of the financial details of Nebraska’s tax incentive programs. Although the Nebraska Advantage Act is the largest, the report provides the benefits paid to companies participating in seven distinct programs. This year’s report identifies the fiscal impact to Nebraska taxpayers of 132 qualifying projects that have received benefits under one or more of the seven programs.

The Annual Report contains specific, detailed information about the benefits participant companies have received and will continue to receive from the program. To date, a total of $905 million in tax credits and $187 million in sales tax refunds have been given, with another $37 million in sales tax refunds pending approval. While sales tax refunds are paid to the company when earned, the tax credits represent a cumulative liability to Nebraska taxpayers.

Of the nearly $1 billion in tax credits earned, less than half of them have been used. When a company qualifies for the tax credits, they can apply the credit in a number of ways. They may use the credits instead of paying state income taxes, apply the credits as a refund for sales taxes, use the credits to pay the employer’s share of tax withholding on employee salaries, or obtain a state refund for their real estate property taxes paid. In some cases, companies can continue to collect on incentives as long as 16 years after they were attained.

A common misconception among taxpayers is that if the current tax incentive programs ended, so would the payouts. That is not correct. If no further applications were accepted or corporate benefits approved, Nebraskans are still on the hook for $484 million of tax credits earned that still remain to be paid.

In addition to the tax credits and refunds that reduce current and future state taxes paid by participating companies, certain projects are granted exemption from personal property taxes. To date, over $6 billion in personal property has been removed from local tax rolls, meaning no property taxes are paid to local governments. To put that in perspective, that is the equivalent of 40,000 homes valued at $150,000 each, or alternatively, 7,500 quarter sections of $5,000 per acre farm ground not paying property taxes. In comparison, the total taxable value of all ag machinery and equipment statewide was $4.1 billion in 2017, while the total taxable value of commercial and industrial equipment was only slightly higher than the cumulative exemption for incentivized companies at $6.5 billion.

While the costs to Nebraska’s taxpayers are known to the dollar, information about the benefits and economic activity created by the credits are estimates at best. For example, the report estimates a cumulative number of new jobs, although that number does not represent a new position created and filled by a previously unemployed Nebraska worker. In fact, the estimated number does not even reflect jobs, but rather “full time equivalents”. Any accumulated increase of 40 work hours per week is counted as an “FTE”. So 10 employees getting 30 hours of work per week instead of 20 would be counted as 2.5 new “jobs”, even though not a single full time job was created.

Additionally, we have no means by which to accurately evaluate the wage levels of the expanded employment. Estimated annual wages are calculated for the report, but they represent only an average wage that FTE’s created.  For example, if a company created one $100,000 management position, two $75,000 supervisor positions, and 10 $30,000 laborer positions, the average salary would be reported as $42,000. The few high wage jobs skew the average, even though almost all of the jobs created were relatively low wage positions.

The report includes a fiscal analysis that uses economic modeling to project the net benefit to Nebraska tax revenue through taxpayer subsidy of participating companies. According to Department of Revenue calculations, the total tax revenue gained by the economic activity created statewide by the incentives programs will be 25% less than the amount of state taxes not paid by participating companies. That is a net annual loss to taxpayers of $32 million in 2018. The Department of Revenue projects that annual loss to grow to $87 million by 2022 and peak at $93 million by 2025. Property taxes not paid are not included in that total loss.

The tax advantages to a handful of companies in Nebraska are clear to see. As a state senator and taxpayer, I have difficulty seeing the public benefit of the current programs, even when those benefits are calculated using optimistic estimates. That lack of measured data on outcomes is troubling. Despite my personal efforts to advance legislation that would provide information for taxpayers, companies receiving the public benefits resolutely opposed greater transparency.  A public hearing on the Tax Incentive Report will take place on Wednesday, August 15.

The term “local control” reflects Nebraska’s priority of self-governance at the community level. Each school district, city, natural resource district, and the thousand miscellaneous government bodies are governed by local officials who establish policies specific to their locale. With the ability to set policy comes the ability to spend tax money, which must be generated from Nebraska taxpayers.

The result of the historical emphasis on local control has been the establishment of 2,659 different local governments across Nebraska. The cost of so many different governments is far more than the half a billion dollars spent annually for general administration costs. With so many different governments, operational duplication is inevitable. Local governments collect 56% of the total taxes in the state and spend 64% of all your taxes paid.  

The annual taxing and spending of local governments in Nebraska only tells part of the story.  Local governments in Nebraska have issued over $9 Billion in public debt obligations. Regardless of any changes in tax policy or spending rates, those debt obligations remain for you and your children. Local government debt equates to $4,820 for each and every Nebraskan, and is equal to 85% of the annual spending by local governments.

The burden of local government debt is not only on future taxpayers. Putting the immediate fiscal cost in perspective with the other priorities of Nebraskans is shocking. According to U.S. Census Bureau figures, Nebraska’s local governments spend in excess of $200 million annually to cover the interest expenses alone, a cost of over $100 per Nebraskan each and every year. Annual interest costs on local government debt exceed the value of the state Property Tax Credit Relief Fund. Interest on debt exceeds 5% of the total value of property taxes collected by local governments each year.

How did a population with a reputation for “pay as you go” and a general public sentiment against debt accumulate $9 Billion of local government debt? Through the collective actions of thousands of individual local government boards, none of whom are required to consider the tax burden or debt obligations any other government is placing upon a single taxpayer in their district. For a taxpayer, it is almost impossible to assess the entire scope of the current and future tax obligations being assessed them by the dozens of local governments.  

One of my biggest surprises over the past four years in the Nebraska Legislature is the degree to which local governments view themselves as entities unto their own, without coordination with the larger policy goals of their community, county, region, or state. Coordination is almost non-existent. When the Legislature discusses policy that impacts local governments, the “local control” principle becomes front and center.

Nebraska is known as a “Dillon’s Rule” state. As described in the 1868 court case that established the doctrine, “municipal corporations owe their origin to, and derive their powers and rights wholly from, the legislature. It breathes into them the breath of life, without which they cannot exist. As it creates, so may it destroy. If it may destroy, it may abridge and control”. Thus, local governments are not entities unto themselves. Their creation, authority to tax, ability to spend, and areas of jurisdiction are granted entirely by the Legislature. They cannot exercise any authority not specifically granted to them by the Legislature.

Local governments choose how to implement state authorized taxing authority, set priorities for how to spend tax dollars, and constitute the majority of the tax burden on Nebraskans. With that local control must come local accountability.

At minimum, all local governments in a county should be required to hold a joint public hearing when setting budgets and tax rates. First, members from all boards and councils taxing citizens and spending tax money would be made aware of the totality of the tax burden placed upon their constituents by their fellow governments. Taxing and spending decisions made in isolation have led to the high local tax burden. Second, a single community hearing would allow for greater transparency for taxpayers and more effective voter engagement. Allow citizens to see a comprehensive picture of all the spending decisions, and the taxes that fund them, in a single public meeting.

I do not advocate for consolidation of more power in Lincoln. I do believe the coordination and cooperation among all local governments should be the operating standard. Program redundancies and turf wars raise the cost of government without improving service to the public. Local control will work best for Nebraskans when all local governments, and the state, work together.


With its wide open spaces, vibrant local communities, and a world renowned worth ethic, Nebraska would not appear to be dominated by government. Despite superficial appearances, the actual numbers tell a very different story. State and local governments in Nebraska collectively spend over $16 Billion annually. In terms of each of Nebraska’s 1.9 million people, that is over $8,500 per person each year.

Every 10 years the United States Census Bureau conducts a census of governments. Data from the last decennial census of state and local governments in Nebraska presents some startling facts. Despite ranking 38th in the nation for population, Nebraska’s 2,659 local governments place us in the 14th spot for absolute number of local governments. As a state, we rank high in the number of city, county, and township governments. However, almost half of the total number of local governments in Nebraska are classified as “special government districts”. These include Natural Resources Districts, Country Fair Boards, Sanitary and Improvement Districts, Educational Service Units, and the myriad of other local government entities that approach 1,300 in number. Nebraska law creates over 30 different types of political subdivisions, all of which have authority to spend tax dollars. Most have the ability to levy property taxes. The area of Douglas County alone contains 214 different governmental entities.

According to Census Bureau data, just the general administration costs alone to maintain each of these government bodies costs each Nebraskan $275 a year. Education expenses by far constitute the largest portion of government spending at 38%. In comparison, transportation is fourth in proportion, making up 9% of the total, while public safety, at 7%, ranks fifth.

After education, the second largest piece of state and local spending is public welfare at 17% of the total, more than roads and public safety combined. Spending on hospitals and health also outranks traditional government roles at 10% of the total reported by the Census Bureau. Of the total statewide tax expenditures, 63% of the spending is by the 2,659 local governments.

Nebraska’s tax policy is inextricably linked to the spending decisions made by elected and appointed officials managing thousands of governments across Nebraska. Each spending decision must be backed by a tax. While the central focus of tax policy is on the Legislature and state budget decisions, the simple numbers indicate the largest proportion of taxing and spending decisions are made by local governments.

The vast network of local governments make it difficult for taxpayers to see the total, transparent picture of tax policy. It also makes setting priorities impossible, as each local entity has their own priorities that do not have to align with the spending decisions of any other local government. Rather, it is up to each individual government, and elected or appointed public official,  to evaluate its role in the total tax asking of Nebraska taxpayers. Every spending decision by even the smallest local district contributes to the $8,500 per person annual total.

The justification for so many different governments in Nebraska is often described as “local control”. However, the privilege of local control comes with accountability for those decisions. Evidence based spending decisions are as important by local boards as they are the state government. Recognizing the magnitude and scope of government in Nebraska is only the first step. Next week I will examine some policy option for improving the transparent and accountable use of all of the $16 Billion spent by state and local governments in Nebraska.


Sen. John Kuehn

District 38
Room #12th Floor
P.O. Box 94604
Lincoln, NE 68509
Phone: (402) 471-2732
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