NEBRASKA LEGISLATURE
The official site of the Nebraska Unicameral Legislature

Sen. Mike Groene

Sen. Mike Groene

District 42

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 mgroene@leg.ne.gov

Home District Column 10/12/17

October 12th, 2017

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.

Contact us: mgroene@leg.ne.gov or 402-471-2729

Home District Column 9/28/2017

September 28th, 2017

Column 9-28-17

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.

Contact us: mgroene@leg.ne.gov or 402-471-2729

Home District Column 9/21/2017

September 21st, 2017

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.

Contact us: mgroene@leg.ne.gov or 402-471-2729

Home District Column 9-7-2017

September 7th, 2017

Column 9-7-2017

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: mgroene@leg.ne.gov or 402-471-2729

Public Hearing Notice 9/14/17

September 5th, 2017

Education
Location: 1445 K Street, Lincoln NE, Room 1525
Time: 1:30 PM

Document Introducer Description
LR130 Groene Interim study to examine issues related to the use of substitute teachers

Home District Column 8/23/2017

August 24th, 2017

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: mgroene@leg.ne.gov 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!

Home District Column 8/15/2017

August 17th, 2017

In order to put this Column in context, I’m adding a link to the comments by Manager Berge published in my local papers.

http://www.northplattebulletin.com/index.asp?show=news&action=readStory&storyID=34496&pageID=6&sectionID=5

Column 8-15-17
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.

Please do not hesitate to contact our office, mgroene@leg.ne.gov or 402-471-2729, with any comments, questions, or concerns.

Now that the Legislature is not in session, we will attempt to explain the facts behind the happenings on some continuous legislation.

LB98 was stalled by filibuster this past session. It would have reset a sunset (cease to exist) date on a 3 cent property tax levy authority for over and fully appropriated Natural Resource Districts (NRDs) to pay for implementation of their required integrated management plans (IMPs).  In 2004, the Legislature first gave the levy authority to the involved NRDs; it has since sunset and been reauthorized three more times and will sunset again next year.

We stood against LB98’s attempt to extend the sunset for 10 more years on the following rationale:

NRDs already have the taxing power to levy up to 4.5 cents and can, with a super majority board vote, override the levy by one cent for a total of 5.5 cents. There are 23 NRDs in the state whose boundaries are defined by the river basins their rainwater drains into:  Platte, Republican, Loup, Niobrara, Elkhorn, Nemaha, Blue, and Missouri River systems. The State has designated 10 Districts as being over or fully appropriated on ground water usage within areas of their districts.

Taxpayers expect that when a sunset is in place there is reason that the tax should end. They also expect the tax dollars will be accounted for and used to accomplish the purpose intended. The NRDs knew that the levy would sunset and good management practices should have planned for that event. The bill had a hearing before the Revenue Committee, of which I am a member. It was obvious the plan was to keep a low profile; make it seem like the extension of the sunset was just standard procedure. A couple of senators started asking questions.  We discovered that the law did not mandate that separate records be kept to show where the tax dollars were used to alleviate the district’s ground water problem; and in fact, we found that those tax dollars were just blended into their overall budget.  Districts involved do have projects in place to alleviate the overuse of ground water; they just did not prove that the tax levy was necessary to accomplish the projects. Seven of the 10 districts involved levied a part of the 3 cents; only 2 of those have total levies that exceed their 5.5 common levy authority. The two districts with boundaries in Lincoln County: the over-appropriated Twin Platte and the fully-appropriated Middle Republican have total tax rates below their common levy authority.

Two overriding reasons why the sunset on the taxes should happen are:

  • Over the last 10 years, total property valuations in the districts have increased from $2.37 billion to $6.8 billion (186% increase). The NRDs common levy of 5.5 cents is quite capable of funding the districts needs.
  • In 2010, the Legislature allowed those districts with IMPs in place to enter into bonded indebtedness by issuing river-flow enhancement bonds and payable by enacting a $10 occupation tax on irrigated land, this funds NCORPE.

With the event of the occupation tax, districts now have a mechanism to fund their IMPs and along with the gigantic increase in valuations, I could see no reason to extend the sunset date on the special NRD levy.

No matter that there is no need for the IMP tax, management of effected NRDs are lobbying hard to keep the taxing authority. The best I can surmise, is that they are like the reformed drunk: they do not need the booze, but they want the security of the jug of whiskey under the sink. What is interesting is that some of the management of the 13 NRDs that have no over or fully appropriated areas are badgering their state senators to support the sunset extension. Their involvement makes no sense unless someday they also would like to have a jug of whiskey under the sink (tax increase).

Property tax relief for all Nebraskans is needed; eliminating the NRD tax can send a message to all local governments: “it’s time to stop hiding spending behind valuation increases”. It’s time for them to lower tax-dollar asking not just their levy.

Please do not hesitate to contact our office, mgroene@leg.ne.gov or 402-471-2729, with any comments, questions, or concerns.

Why is a State Senator sometimes present for a vote on legislation, but does not vote?

Let me walk you through an actual bill: LB461 came out of the Revenue Committee; it is commonly known as the Governor’s and Revenue Committee Chairman’s “Comprehensive Income Tax and Property Tax Relief” effort.  The original language of LB461 was “Correct references to a federal act in a revenue statute”, a normal cleanup bill to match changes in federal income tax law to Nebraska’s income tax policy.  LB461 became what is referred to as a “committee shell bill”, where comprehensive legislation can be created. Related individual legislation introduced by senators are assigned to the committee and after a public hearing, can be amended into the shell bill in executive session (attended by the press but not the public). At least 3 bills (none of which were introduced by me) were amended into LB461 to create a comprehensive tax reform bill. It gets complicated, but other revisions are also made in committee to create the end product—changes that may not have had a public hearing.  I do not disagree with the system; as Chairman of the Education Committee we used LB512 as the shell bill that became the Education Committee’s effort to create comprehensive education reform.  But like all good policy intentions, it is only as good as the humans in charge; the committee process on creating shell bills can and has been abused.

Because I agreed with some but not all of the property tax reforms in LB461, I was one of the majority of the Revenue Committee members to advance the bill to General File.  We needed to have a public debate on the floor of the legislature on tax policy and I wanted to be able to put emphasis on our burdensome property taxes.  The overall bill I could not support; it was heavily weighted towards income tax cuts over property tax relief (10-1), and frankly my constituents have not asked me for income tax relief, their focus has been on burdensome property taxes.

The way the Unicameral works with its three stages of debate—general file, select file and final reading—it allows for the opportunity to amend a bill to refine the final product.  I was amenable if the right corrective amendment came to the floor, but it was not going to happen.  “The never in their lifetime” opponents of income tax cuts were filibustering the bill and we were never going to get to a good amended tax bill. So when after the six hours allowed for debate ended and the cloture vote was taken to proceed to vote on advancing LB461, I stayed neutral: present–not voting.  Cloture takes a super majority of 33 votes; it failed 27 yes, 9 no and 13 present—not voting.

Casting a present—not voting vote is basically a soft no vote. It sends the message to the bill’s proponents that I may agree with you that we have an issue that needs to be addressed, but I do not agree with your solution.  When asked by a reporter last year if we failed to accomplish all that needed to be done, my reply was, “Nebraska has existed for 150 years without the failed legislation, I believe it will  make it through another year until we do it right.”

The debate on LB461 was another step in the stairs to reach property tax relief; we are building to a crescendo on the issue. My input is one of many trying to put together the right language for a petition initiative to allow citizens to directly address the property tax issue. So stay tuned.

I appreciate all of the positive feedback we have received on last week’s NCORPE/windmill column. No one is attacking the system of local government we have, including the Natural Resource Districts; what citizens have a right to do is question the decision that those elected bodies make and have the expectation that those they elect, with oversight of those local entities, do exactly that and if necessary, fix the issue with corrective legislation. It is called democracy in action.

Please do not hesitate to contact our office, mgroene@leg.ne.gov or 402-471-2729, with any comments, questions, or concerns.

Sen. Mike Groene

District 42
Room #1107
P.O. Box 94604
Lincoln, NE 68509
Phone: (402) 471-2729
Email: mgroene@leg.ne.gov
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