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Thank you for visiting my website. It is an honor to represent the people of the 42nd legislative district in the Nebraska Unicameral Legislature.
You’ll find my contact information on the right side of this page, as well as a list of the bills I’ve introduced this session and the committees on which I serve. Please feel free to contact me and my staff about proposed legislation or any other issues you would like to address.
Sen. Mike Groene
The Nebraska Economic Development Task Force was created this year with the passage of Legislative Bill 641 to examine the effectiveness of economic development programs and to look at alternatives. Due to my position as Education Committee chairman, I am appointed as one of its 10 members.
So far we have met every month, requiring a trip to Lincoln. Originally, the subject was geared to analyzing what state and local economic development programs were effective, weighing the cost to the taxpayer versus the economic activity created.
The topic of late has turned to tax increment financing, a program that has legislative oversight by the Urban Affairs Committee. It was created by ballot approval of citizens, adding a new section to our State Constitution, Article VIII-Section 12. TIF is intended to create an incentive to transfer existing economic growth from the outer edges of a community to redevelopment in blighted and substandard older areas. It was never intended to become a tool for communities to use to compete with other communities for normal regional development growth; and it was never intended to be used as a cure-all for normal free-market irregularities such as a present perceived shortage of workforce housing.
This year I led a successful filibuster of LB496 — legislation that would have added private construction cost of projects (outside of Omaha and Lincoln) to the total cost property tax dollars could be used for to finance TIF. This was a major change to the present belief that TIF dollars are still tax dollars and should be used for public purpose: Limited to the cost of removal of blighted structures and replacement of older public infrastructure — streets and public utilities. The false perception during debate on the bill was that TIF was not being used for housing. The most recent TIF report by the Department of Revenue showed $557 million of statewide residential property value involved in TIF projects.
Most of those residential projects, due to being limited to public infrastructure cost, run their course on average much less than the allowable 15 years, thus returning those tax dollars back into the communities’ tax base sooner rather than later. By adding construction cost to the equation, all residential TIFs would run the full 15 years. The question also arises: Why would any contractor build a residence without TIF? It would soon become apparent that to compete, TIF would be a necessary part of the projects’ financing. Last year, outside of Douglas and Lancaster counties, Nebraska had $667 million in residential construction growth; considering the vast majority of that growth was in the city limits of communities, it is not hard to imagine the hit our state’s property tax base could take if LB 496 would pass. Last year, residential TIF had a $12 million cost; that could easily double in a few years.
In Lincoln County, we have an odd array of economic indicators. Low unemployment but, at the same time, loss of population is one. How can there be a shortage of housing when we have fewer people?
Is the cost of housing the problem, or is the cost of owning housing the culprit? I go back to high property taxes as a source for part of the housing situation. The mere fact that the supporters of LB 496 claim that property taxes are such a burden that the diversion of a homeowner’s taxes to a contractor for 15 years is a deciding factor to build should give pause to all of us when we examine our property tax burden. For example, a family looking to buy a $200,000 home in North Platte would pay on a 4 percent interest, 30-year mortgage a reasonable $955 loan payment; but when you throw into escrow an additional $100 for insurance and $350 for property taxes, a monthly payment of $1,405 can deter home ownership. So I continue to work for property-tax relief for all and fight against answers that only profit special interests.
As a statewide policy maker, I have to take into consideration unintended consequences of legislation. Often when you try to fix a perceived short-term economic bottleneck, you end up breaking the bottle.
Contact Sen. Mike Groene: email@example.com or 402-471-2729.
Why are Nebraska’s property taxes the 12th highest per-capita in the nation? It is how we fund public education.
In 1990, the Legislature over Governor Orr’s veto passed LB1059 “the Tax Equity Educational Opportunity Support Act”. The legislation was enacted to correct, at that time, the over reliance on property taxes (70%) to fund education. A goal was to fund a minimum of 45% of the total state and local cost of education with income and sales tax increases. To do so, sales tax rates were raised by 25% and income tax rates 17.5%. The mechanism used to assure all districts received state aid was to guarantee that a minimum of 20% of the income taxes paid by the citizens in their districts would be returned to them in aid. The promise made to the taxpayers was that their property taxes would decrease proportionally to the increase in their sales and income taxes.
By 1996-97 the Legislature broke their promise by enacting LB1050 and 806 which eliminated the guarantee of a state foundation aid of 20% income tax credit and eliminated the goal of the State’s share of funding at 45%. Those changes returned property taxes collected as the first source of funding for schools and returned state aid as a source to fill in the remainder. Also in 1996 they enacted LB1114 which established levy lids that promised local property taxes would be controlled by enacting lids on local government’s levy authority; schools were limited to 1.00. As we all know now, they did not consider the rapidly rising property valuations over the last 20 years which have driven up property tax revenues.
The only promise kept by (at that time non-term limited) Legislature was to raise your taxes.
Where are we now after 37 years of broken promises? According to the Census Bureau, Nebraska is 49th in the nation in per-cent of school funding that comes from the state and 2nd in the nation as to funding from property taxes; according to the “Tax Foundation”, the latest 2014 study has us 7th highest in the nation property tax burden on homeowners. Property taxes account for 65% of school funding. Out of a total of 245 school districts, 178 districts receive no state equalization aid; and so much for the promise that the state would cover 45% of state and local tax support for individual districts, this year only 13 districts received 45% or more of their funding from the State.
Since 2015 we have made small steps to keep past promises. In 2016, the Education Committee and Legislature enacted LB1067 that reinstated a small portion of the guaranteed income tax credit (2.23%). Now at least every school district receives a very small amount of state aid; prior to that, 81 rural school’s districts received zero dollars in aid through the TEEOSA formula. That year we also passed LB959 which incorporated my LB444 into its language, which eliminated the mandate that schools maintain a minimum tax levy to receive most of their state aid thus allowing fiscally conscious school boards a little wiggle room to control local property tax rates.
I give you this history of how state government unjustly funds public education on the backs of property tax payers in preparation for the debate on a petition effort that is in the works. It is commonly rumored to be called the 50% school general fund property tax/income tax credit initiative. It will give all
property tax payers in Nebraska who file a state income taxes a 50% refundable income tax credit on the amount they have paid to school districts for their general fund levy.
Our State constitution mandates that the state “shall provide for free instruction in our common schools”. Since it is obvious that past and present state officials have not fulfilled that state duty, it may be time for the second house of the legislature do so through their constitutional right to enact laws through the petition/initiative process. You will hear scare tactics from the opposition to the petition; ignore them and sign the petition. It is time for the taxpayers to send a message to state government.
I thought you might want to see the facts behind my positions on tax policy.
When talking tax policy in Nebraska, we refer to the three legged stool—taxes balanced between income, sales, and property taxes. Presently we are out of WAY OUT of balance. Last year, Nebraskans paid in billions: $8.9 in state and local taxes, $3.9 (43.8%) in property, $2.55 (28.7%) income, and $2.45 (27.5%) in sales and miscellaneous taxes. In Lincoln County, the inequity is even more dramatic. Last year, Lincoln County’s residents paid $71.3 million (51.5%) in property taxes, $31.7 (23%) million state income taxes, and approximately $35 (25.4%) million in sales taxes. If it seems to you that the proportion of your tax burden leans heavily to property taxes, the evidence shows you are correct in your belief. The easy political answer is to cut government spending. Locally, it is up to you to run for office or ask the right questions of candidates before you support them. On the state level, it is up to me to support policies that address the inequity in tax policy and to make sure the state does not pass down costly mandates to local government.
Our State’s property tax inequity is caused mainly by how we fund our public schools. Schools take well over half of your property taxes. As Education Committee Chairman, my focus has been to address the State Aid formula’s (TEEOSA) heavy reliance on property taxes. Last year I introduced LB640, which has made it through committee and is on general file but has strong opposition from senators representing some urban school districts that now receive the largest benefits from the status quo. With Nebraska’s unique one house Unicameral form of state government, the citizens are the second house and it may be time for them to take the issue into their own hands with a petition drive to put property tax equity on the 2018 ballot.
I would eventually like to see an individual income tax cut in Nebraska and to make Nebraska’s businesses competitive, I would prefer to eliminate many of the present economic tax incentives that go mostly to large corporations and replace them with the elimination of our State’s corporate income tax. But this is not the time for income tax cuts. It is our burdensome property tax structure that is driving retirees from our state, harming the rural economy, and hurting our housing markets. Like it or not, the property tax fix will have to come with a rebalancing of the three legged stool.
Monday, the County Commissioners set your tax rates for next year. As a local taxpayer it is good to see that many of the citizens who sit on local elected boards are trying to hold down the cost of government. The County Commissioners again lowered the County’s tax levy and only increased spending by a minimal amount. We all need to be reminded that although the County sends out your tax statements, they only receive 18% of the total property tax revenue. The local Ag Society (county fair) cut their tax rate and dollars nearly in half after doubling it for a year for a one time project. Mid-Plains Community College not only lowered their levy, they actually are taking less dollars ($16 million to $15.9). The villages of Sutherland and Wallace lowered their tax-rates and dollars. Thanks to the Airport Authority lowering their budget request, the city of North Platte was able to lower their levy slightly but due to reductions in sales tax revenues, they had to increase their dollars by $526,000. One way to lower your property taxes is to shop locally this holiday season and keep your sales taxes local.
The Twin Platte NRD reduced their tax-rate by 25% and reduced their dollars asked for by $632,000. Thank the irrigated farmer for paying his $10/acre occupation tax for lowering your NRD taxes. Now if the Twin Platte Board would agree to push for selling the NCORPE land, we could get those farmers a tax cut too.
Lincoln County’s total property taxes will go up. Individually it depends on where you live and if you were one of the unlucky ones who got a large valuation increase.
Recently, free speech issues have risen at the state and national levels. A University of Nebraska-Lincoln student representing “Turning Point”, a college campus-based organization touting support of free markets and limited government, set up a table on the student union commons area to recruit like-minded fellow students. She was asked to move out of the area by University staff and insulted by individuals with combative comments, vulgar gestures, and rude signage. Not all insults were hurled by fellow students as one would expect, but also by two University instructors. I am all for an exchange of ideas between college instructors and students framed by classroom debate. What made this situation different was the intimidation of this student by University employees in positions of power over her. I do not believe such behavior should be tolerated by government employees at the University of Nebraska. They should have been fired.
This past Sunday, many professional athletes used the playing of our National Anthem as an opportunity to make a political statement by kneeling or locking arms. Their behavior was baffling, why would you choose to insult our flag? It is the very symbol that flies above us representing the rights we share as Americans and waves to honor all who have fought to protect those rights. It is our Constitution and flag that has continued to drive our country in the direction of justice for all. What is more baffling is these athletes are living the American dream: most received a free college education, the opportunity to use their God-given talents, and to be rewarded handsomely for their efforts. Choosing to disrespect America on their time I can understand, but on that football field they are employees representing a professional organization. Since that is the case, don’t ask me what the score was. I won’t be watching.
A local amateur columnist recently distorted my views on using our State’s tax policy as a tool for economic development. He twisted a point I had made earlier (that those representing eastern Nebraska claimed an auto plant located in their corner of the state would be an economic boon for Nebraskans, but when rural Nebraska asks for property tax relief as an economic stimulus, we are met with a deaf ear) into a rant about housing and his dislike of my refusal to be bullied by the local chamber during legislative debate. He also inferred that government policy should be made by self-proclaimed experts in lieu of elected officials.
I freely admit, my election was not supported by the leadership of the local or State Chamber of Commerce. Why? Because I do not support incentive programs that harm local property and sales tax bases, I favor property tax relief for everyone over income tax cuts, I do not support government picking winners and losers through taxation policy, and I understand that Tax Increment Financing (TIF) is for urban renewal in such areas as between Cody Park and B Street.
The majority of the business community that did support my election were the owners of small businesses and individuals who work for a paycheck. I kept my word to them and in 2016, received a 100% approval rating by the National Federation of Independent Business.
This past session I continued to support small businesses by supporting a sales tax on internet purchases and I championed property tax relief efforts. I fought and defeated an attempt by a few (not all) bankers, wealthy investors, and corporate home builders to add residential construction cost to TIF because it was unfair to independent owners of rental housing properties–who with their own sweat and money, invest in and refurbish older homes–and was equally unfair to independent home builders who adequately supply the new homes needed in our community.
Don’t let the naysayers who deem themselves economic development experts mislead you on North Platte’s economic vigor. Even with the drag of a down agriculture economy and a high property tax burden, our housing and rental markets are strong, local retail developers continue to have faith in the community and are building new storefronts, and the labor market is robust–the railroad is hiring.
We introduced Legislative Resolution (LR) 130: an Education Committee study to examine issues related to the use and availability of substitute teachers.
Last year, Senator Erdman’s LB568 in the Education Committee and Senator Kolterman’s LB415 in the Retirement Committee brought to our attention policy issues concerning substitute teachers in our state’s public-schools.
When introducing LR130, I started with the premise that teachers want to teach and they take pride in their classroom results. They would prefer to be in the classroom! Therefore, the questions we posed were: 1) what can we do to maximize teachers’ time in the classroom? 2) What policies can we pursue to assure that there is smooth transition in the classroom from teacher to substitute? 3) Could policy changes help lower last year’s $35 million statewide cost for substitute teacher?
Believing that the real-life experiences of local school superintendents were the best source of background information, we sent out a questionnaire to all 244 school district superintendents. Response was good. At the hearing, we invited testimony from school organizations: Nebraska State Education Association (NSEA), Nebraska School Activities Association (NSAA), Educational Service Units (ESUs), Nebraska Association of School Boards (NASB), and the Department of Education (NDE).
When asked how many days teachers are absent from the classroom, the answer was on average 10.5 to 12 days. Considering many teachers prefer to be in their classrooms, the average was unexpectedly high. A school official who testified stated that the total days a public school student is taught by substitute teachers is equivalent to one of their 13 years in public school.
Life does happen and as expected, illness and the federal Family Medical Leave Act (FMLA) (up to 12 weeks) accounted for over 50% of the absence from the classroom.
Other major reasons were: continued education requirements for certified teachers for professional development and training for state mandates on assessments, curriculum, student testing, school safety, and standard reviews. Also attributed were new training requirements for numerous state edicts, as examples; suicide awareness, bullying prevention, date rape prevention, restraint and seclusion, and concussion protocol.
The trend towards teacher contracts allowing for personal days instead of strictly sick leave and family emergencies was also mentioned as a reason for increased teacher absences.
When asked if NSAA high school activities were a major factor for demand of substitute teachers, the answer was no: those events are mostly scheduled around school days. Some isolated rural districts were affected by travel time to events. Also mentioned were, an increase in junior high activities and all-day club activities of Future Farmers of America (FFA) and Future Business Leaders of America (FBLA).
We discovered that after allowing for the expected 5-6 days of illness and family leave, the question remained of how can we keep teachers in the classroom the other 5-6 days they are now absent? Scheduling training days by ESUs and the NDE during non-classroom times seems to be the quick answer. That answer may mean adding more non-classroom days to employee contracts or simply scheduling training during the summer interim. A consideration of moving away from the trend of giving paid personal days in contracts and instead returning to a policy of allowing for administrator approved paid absences may be another answer.
With that said, for the immediate future we still need to find ways to expand the pool of available substitute teachers. Most of the responders to our survey said allowing recently retired teachers the ability to substitute immediately would help immensely; the stickler is, the IRS requires a bona fide separation from like employment when retirement is drawn. State law defines separation for public school teachers as 180 days. NDE did attempt to address the problem this year by increasing the number of days a local substitute can teach from 45 to 90. To be a local substitute, one must have at least 60 credit hours of higher education including an hour of an approved human relations course. It was suggested that 120 days should be considered.
If you have inkling to teach, check with your school, you may qualify to substitute teach.
The Revenue and Appropriations Committees met last month to hear the Revenue Department’s annual report on Nebraska’s Tax Incentive Programs.
The cost to the State’s tax receipts was over $295 million in 2016. The breakdown of the tax credits and direct refunds on the two major incentive programs (Nebraska Advantage and 775 Incentives) in millions: corporate income-$115 (to put that number in perspective the State only collected $235 in corporate income taxes), individual income-$10.4, employee income withholding-$22, sales taxes-$59 and direct refunds of sales and use taxes-$39.
The Advantage Act will sunset in 2020, there is movement in the Legislature to examine the cost-benefit of the incentive program. The economic advantage of the program leans heavily to eastern Nebraska where the jobs, retail sales, and property tax growth occur. Meanwhile, rural taxpayers help absorb the lost state revenue without economic benefits.
We were also briefed by the Department of Economic Development (DED) on Nebraska being one of 15 states under consideration for a Toyota-Mazda auto manufacturing plant.
Requirements for the project include availability of 1500+ acres of land with major rail services, 4-lane highways, competitive-available electric power, and a reliable workforce of 200,000 within 60 miles radius of plant.
I pointed out to the Director of DED that Lincoln County had plenty of open land, was the site of the largest freight classification rail-yard in the world, had interstate I-80, and a soon to be expanded Hwy 83; plus we have the under-utilized Gerald Gentleman power plant–one of the most efficient and reliable sources of electricity in the nation. We also have a solid, blue collar work ethic in our people. History of free market activity shows that workers will migrate to jobs and that the infrastructure of housing and government services will follow.
She made it obvious the plant was going to be pursued for eastern Nebraska. I made it clear that rural Nebraska needs to be included in the discussions.
It is ironic that urban areas of the state have not been willing to help the economy of rural Nebraska by addressing high property taxes but assume we will jump on the bandwagon of new tax incentives that focus on urban growth. The odds of landing the Mazda-Toyota plant are small but it is worth a reasoned try. Lincoln County would be a good location, if given the opportunity.
A couple of closing comments in the informative LB98 property tax debate we are having with the North Platte NRD (NPNRD) management. On one side of the issue stands the NPNRD with the highest property tax rate (.063545) of the state’s 23 NRDs and on the other side stands my belief of fiscally responsible government. Local control starts and ends with legislation enacted by the Unicameral. The Legislature gave for a period of time the levy authority in question, it is set to sunset next year. The Legislature has since given NRDs the authority to assess up to a $10 per acre occupation tax on irrigated land. NPNRD has yet to use their local control to assess the occupation tax to address their overuse of groundwater.
It was a local control decision by the NPNRD that accentuated the problem when they allowed a massive increase in well-permits in 2003 in anticipation of enactment of LB962. Now when the results of those local decisions come home to roost, they disingenuously attempt to blame state and federal governments for their problem.
There are ways to alleviate the problem by using tax dollars wisely. For example, I introduced LB488 which would have created a voluntary program for land owners to choose to farm irrigated land as dry-land for one year. This new local control tool was opposed by the NRDs. Unlike NPNRD’s program to pay excessive and panicked prices to land owners for their water allotments to permanently retire irrigated acres, LB488 would keep irrigated acres in production long-term.
I will continue to fight for property tax relief by opposing LB98. It will be interesting to see, in an election year, how many of my colleagues will support an unnecessary property tax increase?
Contact us: firstname.lastname@example.org or 402-471-2729
Weekly Column 8-21-2017
Thursday at 1:30 PM, I will be attending the Urban Affairs Committee’s hearings at Mid-Plains Community College. Topics will be LR 60—to examine the findings of the State auditor’s TIF report and LR 160—a look at the potential of offering relocation incentives to attract residents to rural communities. The public is encouraged to attend and testify if they wish to.
Friday, I will be in Lincoln to attend a joint Revenue/Appropriation Committee meeting for a presentation of the 2016 Nebraska Tax Incentive Annual Report from the Nebraska Department of Revenue.
A brief TIF history before the Hearing Thursday: In November 1978, Nebraskans adopted Amendment 1, which added Article VIII-section 12 to our state Constitution. The amendment created an exception to the constitutional mandate that property taxes are levied “uniformly and proportionately upon all real property.”
Nationally, an idea had emerged to encourage urban renewal, to aid our country’s inner cities. Voters allowed municipalities to unilaterally confiscate from all local government entities the increased increment of property taxes attributed to new construction for the purpose of “rehabilitating, acquiring, or redeveloping substandard and blighted property in a redevelopment project.”
This created what’s known as Tax Increment Financing (TIF).
The voters understood the amendment. An Aug. 6, 1978, Omaha World-Herald article stated, the proposal was “to encourage developers to use downtown or main street property instead of building on the outskirts of town, where taxes and property values may be lower.”
The following year the Legislature enacted legislation with an understanding that TIF’s purpose was to fund urban renewal. They knew that existing redevelopment law defined “substandard” as conditions where “there is a predominance of buildings” marked by “dilapidation, deterioration, age or obsolescence, inadequate provisions for ventilation” or “conditions which endanger life or property by fire” or are “conductive to ill health.”
Blighted property was defined in terms such as “unsanitary or unsafe conditions,” and open land was defined as “unimproved land that has been in the city for 40 years and has remained unimproved during that time.” Lawmakers understood that TIF was not a description of a redevelopment area but instead was a financing tool for individual projects that fit certain criteria. Amendment 1 made an important distinction when it used the conjunction “and”: requiring that the property be both “substandard and blighted.” This provision was unlike older redevelopment laws, which allowed a project to be approved if either condition exists.
You get the point; we are not describing a farm field.
Last year, TIF diverted $70 million from local government coffers statewide. TIF has a negative effect on public school funding and adds to already high property tax burdens. Normal growth from housing and retail development brings the need for increased public services, but TIF’s tax revenue shift to developers causes existing taxpayers to foot the bill.
How did a good program that helped rejuvenate the riverfront in Omaha and the entrance to the old downtown in North Platte evolve into something now used as an economic development give away or threat—“give it to me or I won’t build”—for normal free market projects such as building homes on a newly annexed farm field, a chicken factory outside of town, or a big-box store on prime real-estate near an interstate- highway.
The answer is simple: When the Legislature enacted legislation defining TIF, they never allowed for state oversight. Imagine a speed limit without police, and you understand TIF use in Nebraska.
TIF today is whatever a city council wants it to be. Attorneys create tailored legal arguments that promote opportunistic, “end justifies the means” interpretations of TIF. Other than filing expensive civil lawsuits, local taxing entities and citizens have no recourse to stop such practices.
The most obvious way to stop this abuse is to elect city officials who have an appreciation of the rule of law. In lieu of that, I have and will continue to introduce legislation to put state oversight into TIF; our first attempts have been killed in committee.
Why, you ask, would elected city and state officials oppose legislation that promotes accountability and transparency in government? The answer is always the same—follow the money!
Contact us: email@example.com or 402-471-2729
Tax Increment Financing Op-Ed Column 8-17-2017
In November 1978, Nebraskans adopted Amendment 1, which added Article VIII-section 12 to our state Constitution. The amendment created an exception to the constitutional mandate that property taxes are levied “uniformly and proportionately upon all real property.”
Nationally, an idea had emerged to encourage urban renewal with private-sector development, with the particular aim to aid our country’s inner cities. Voters allowed municipalities to unilaterally confiscate from all local government entities the increased increment of property taxes attributed to new construction for the purpose of “rehabilitating, acquiring, or redeveloping substandard and blighted property in a redevelopment project.”
This created what’s known as Tax Increment Financing (TIF).
The voters understood the amendment. An Aug. 6, 1978, Omaha World-Herald article stated, “A city or village could buy blighted downtown property and clear it in preparation for a new structure.” The proposal, the article said, was “to encourage developers to use downtown or main street property instead of building on the outskirts of town, where taxes and property values may be lower.” On Nov. 3 The World Herald’s endorsement stated, “We have recommended passage … which would help cities and towns of all sizes to develop rundown areas.”
The following year the Legislature enacted legislation with an understanding that TIF’s purpose was to fund urban renewal. Lawmakers avoided using economic development terms, referring only to redevelopment. They knew that existing redevelopment law defined “substandard” as conditions where “there is a predominance of buildings” marked by “dilapidation, deterioration, age or obsolescence, inadequate provisions for ventilation” or”conditions which endanger life or property by fire” or are “conductive to ill health.”
You get the point; we are not talking about a farm field.
Blighted property was defined in terms such as “unsanitary or unsafe conditions,” and open land was defined as “unimproved land that has been in the city for 40 years and has remained unimproved during that time.” Lawmakers understood that TIF was not a description of a redevelopment area but instead was a financing tool for individual projects that fit certain criteria. Amendment 1 made an important distinction when it used the conjunction “and” — requiring that the property be both”substandard and blighted.” This provision was unlike older redevelopment laws, which allowed a project to be approved if either condition exist.
Last year TIF diverted $70 million out of local government coffers, more than doubling the amount from 10 years ago. TIF has a negative effect on public school funding and adds to already high property tax burdens. Normal growth from housing and retail development brings the need for increased public services, but TIF’s tax revenue shift to developers causes existing taxpayers to foot the bill.
How did a good program that helped rejuvenate the riverfront in Omaha and the Haymarket area of Lincoln evolve into something now used as an economic development threat — “give it to me or I won’t build” — for normal free-market projects such as building homes on a newly annexed farm field near Ashland, a chicken factory on the outskirts of Fremont or an office complex in west Omaha?
The answer is simple: When the Legislature enacted legislation defining TIF, they never allowed for state oversight. Imagine a speed limit without police, and you understand TIF use in Nebraska.
TIF today is whatever a city council wants it to be. Attorneys create click legal arguments that promote opportunistic, “end justifies the means” interpretations of TIF. Other than filing expensive civil lawsuits, local taxing entities and concerned citizens have no recourse to stop such practices.
The most obvious way to stop this abuse is to elect city officials who have an appreciation of the rule of law. In lieu of that unlikelihood, I have and will continue to introduce legislation to put state oversight into TIF; the original bills were killed in committee.
Why, you ask, would elected city and state officials oppose legislation that promotes accountability and transparency in government? The answer is always the same — follow the money!
In order to put this Column in context, I’m adding a link to the comments by Manager Berge published in my local papers.
North Platte (NRD) Manager Berge’s guest opinion in last Saturday’s Telegraph, portrays well why it is necessary for state legislators to balance a need for local control and the must of protecting local taxpayers from a few tax-and-spend bureaucrats mixed in with the vast majority of good public servants.
To understand where Berge’s opinion originate from, you must first know that he spent most of the first 20 years of his career in politics as an aide to US Senators Exon, Kerry, and Nelson. He spent time employed by the Obama presidential campaign and afterwards was employed by the USDA for 4 years. He has a federal government mindset, where dictating policy to local citizens is the norm. It is obvious his view on local control and mine differ.
Local control starts with individual responsibility. Enactment of LB962 in 2004 was a reaction to Nebraska’s involvement in interstate river-flow agreements and federal endangered species mandates. Back in 2003, in anticipation of a moratorium on new irrigation wells, local NRDs allowed a massive increase in well drilling permits. Those local decisions greatly compounded the problem.
Anytime legislation resurrects a sunset on a tax, it is a TAX INCREASE. The 3 cent NRD levy was enacted prior to passage of LB701 in 2007, which created authority for NRDs in over and fully appropriated areas to levy an occupation tax on irrigated farmland, up to a maximum of $10 per acre, to fund river-flow enhancement bonds, to pay for the very compliance programs Berge’s employer had created to return water to the North Platte River’s flow. Since the occupation tax creates an alternative funding source for compliance, the levy is no longer needed. The occupation tax puts personal responsibility to the forefront as a funding solution. If you installed the well and you profit from the related over-appropriation of ground water, you should pay a larger portion of the fix.
We may disagree on the NCORPE project, but my district’s NRDs (Twin Platte and Middle Republican) have done the right thing on taxation policy. In both districts the irrigators have stepped up and paid the $10 occupation tax and thus the NRD has been able to maintain a lower tax-rate. Many of those irrigators are now working with me to lower the burden of the occupation tax by seeking legislative and legal actions to eliminate costs associated with NCORPE.
Why does Berge’s NPNRD need to increase their tax levy? Over the past 10 years their valuations have increased from $2.7 to $5.1 billion (86%). The general fund revenue generated from the (state authorized) levy of 5.5 cents, increased from $1.5 to $2.79 million. Berge has made it clear that he believes ranchers, dry-land farmers, home owners—including young families and retirees—along with small businesses in his NRD should pay high-property taxes to address a problem they neither created nor directly profited from.
Berge is confused on how the interaction between local and state government works. NRDs themselves exist by mandate of the will of the people through their State government, as also does the NRD’s authority to tax property. The temporary 3 cent levy, that he covets an extension on, was granted to NRDs by the legislature. In fact, Berge’s job exists because of a state mandate.
The Legislature’s duty is to balance protection of a local individual’s freedoms including property rights from the majority, while at the same time allowing a local majority to direct their schools’, city’s, NRD’s, or county’s policies that effect all citizens. Tax rate and spending lids placed on local governments protects individual taxpayers from Berge’s false view that increased government spending equates to good government.
No, Mr. Berge I am not anti-tax; I am for fiscally sound government. Local control to me is defined by individual personal responsibility. In truth, not burdening your neighbor with your bad choices is the best form of government.
For a few NRD managers, intervention is needed. We need to stop enabling their addiction to tax dollars, allowing the 3 cent levy to expire is a good start. I do need to apologize to all the good public servants at our NRDs and to drunks for not clarifying my original general comparison.
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