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.
Please do not hesitate to contact our office, email@example.com 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:
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, firstname.lastname@example.org 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, email@example.com or 402-471-2729, with any comments, questions, or concerns.
A promise that I made to you when elected was to look after the best interest of Lincoln County concerning the creation by four area Natural Resource Districts and their interlocal agreement named N-CORPE. What many of us feared is coming to pass. Ground water levels around the mining operation of H2O in central Lincoln County has dropped as much as 29 feet since pumping began in early 2014. In perspective, it dropped a manageable 14 feet the previous 37 years.
This year I introduced LB 218, which would require the NRDs to be transparent on the effects of N-CORPE on our local groundwater levels and future management plans. It also defines and restricts future attempts by public or private entities from mining groundwater and removing it from its natural ecosystem and the bill would force the NRDs to sell the land while maintaining use of the groundwater allotments. While the bill has received support from the majority of individual farmers and urban citizens I have talked to, it has been vehemently opposed behind the scenes by NRD management employees, mostly from those NRDs whose boundaries do not lie in Lincoln County.
I have not received a satisfactory answer to my question, “Why do the taxpayers need to own 20,000 acres in N-CORPE?” Instead the NRDs are pursuing a scheme to pay for N-CORPE’s wasteful management by proposing to contract with a private company to put 140 windmills on public land. It seems they plan to do so by overriding Lincoln County’s local zoning control, and without the approval of its citizens.
On July 26, there will be an N-CORPE sponsored open meeting on the windmill proposal. In preparation, I have sent the following letter to the NRDs:
“I am requesting information to address concerns that the citizens of Legislative District 42 (Lincoln County) have brought to me about recent actions your NRD has participated in through its membership in the Nebraska Cooperative Republican Platte Enhancement Project (N-CORPE). The issue is your involvement in a contract with HDR to pursue an agreement with a private wind energy company to erect multiple electricity generating windmills on public property.
Answers to the following questions are needed to address the public’s concerns:
1) What statutory authority gives N-CORPE the right to proceed with this action? The language in the Interlocal Agreement does not state a purpose that would infer the establishment of a wind energy generation project.
2) How are your actions in accord with the State’s purpose for creating the existence of an NRD? What state statutes are you relying on for your individual NRD’s decision to pursue this action?
3) What legal procedure are you planning to use to allow industrial development in an area zoned agriculture by Lincoln County?
4) Has your NRD board taken a publicly recorded vote giving direction as to how your interlocal representatives shall vote on the windmill matter?
5) The Upper Republican and Lower Republican NRD’s boundaries do not include land in Lincoln County. What authority do you believe your NRD has in dictating zoning decisions to elected officials in Lincoln County? It becomes a greater concern for Lincoln County residents that 3 of the 4 N-CORPE board members do not reside in our county.
6) Since establishment of a wind generation area could be considered economic development by a public entity, will there be a public vote seeking approval?
7) HDR Inc. has been contracted to provide engineering support for the development of the “project.” Since N-CORPE exists to satisfy a state purpose, what funds are used for the payment of this contract?
In order for Lincoln County citizens, including their State Senator, to knowledgeably participate in discussions on the proposed windmill project during the public comment period on July 26, we would expect to have answers to these questions well before the meeting.
Sincerely, Sen. Groene”
Signs along Highway 23 say, “Keep our water in Lincoln County.” Local irrigation and livestock agriculture does exactly that. Likewise, Lincoln County citizens have the right to control decisions on zoning and what industries define their business culture. I urge you to show up and make your voice heard on July 26.
Please do not hesitate to contact our office, firstname.lastname@example.org or 402-471-2729, with any comments, questions or concerns.
We enjoyed seeing many of you while walking in the NEBRASKAland Parade Saturday. You might have missed it in the local press, but Senators Tom Brewer and Steve Erdman joined us in the parade to participate in the official kickoff of the 150 year statehood celebration. We all appreciated your shout outs of support and words of wisdom.
Last week, I focused on the State’s budget which begins July 1. I thought I might add a few more pertinent facts. Wages and benefits are the largest cost of most government operations. State employees agreed to a raise of 1% for 2018. The agreement was negotiated by the Nebraska Association of Public Employees and representatives of the State at the very start of the budget process through collective bargaining. It will affect almost all of the State’s employees including those in the Department of Roads and Health & Human Services, along with all other state agencies. Non-bargaining employees, including the staff of the elected Constitutional Officers (i.e. the Governor) and the Legislature will receive the same 1% raise. State Senators receive no pay raises; their pay is locked in at $12,000 annually by the State’s Constitution.
Higher education organizations bargained their own raises. The University of Nebraska increased wages an average of 1.75%, the increase is included in their overall budget request. The State Law Enforcement Bargaining Council (SLEBEC) negotiates for law enforcement employees and they reached a settlement averaging 2.3% for both years of the biennial budget.
In an effort to address our prison problems, Corrections Department employees will receive on average a 4.4% increase in salaries but increases will vary for specific classification pay lines which include correction officers, caseworkers, corporals, sergeants, mental health practitioners, nurses, and food service specialists. High employee turnover and a lack of experience were attributed to being reasons behind some of the recent inmate unrest at our prisons. Employee turnover is costly; we lose the investment we made in those officers’ training and increase our cost when we have to train new employees. Having employees with longevity on the job can go a long way in correcting our prison system unrest.
It is no surprise that employee health insurance cost jumped 5.75% for FY 2017-18. State employees have a very good health insurance plan and they are willing to forgo higher raise increases to keep it. State employees pay on average 20% of their health insurance premium. The cost of salary and benefit increases added $32.1 million to the budget. Overall, state employees need to be thanked for stepping forward by accepting lower wage increase and thus being part of the solution to our budget solution.
Senators are allowed to introduce Legislative Resolutions (LRs), which are recommendations to committee chairmen to do interim studies on issues, which in many cases lead to legislation. Due to limited staff and time, only a few of those resolutions can be investigated by each committee.
I introduced three LRs:
Legislative Resolution 130 (referred to Education Committee) – Examine issues related to the use of substitute teachers. This past session, the lack of an adequate number of available substitute teachers in rural Nebraska became an issue that was discussed. The Department of Education addressed some of the causes by easing requirements for substitute teachers, but the issue remains. LR130 will attempt to pinpoint causes and propose remedies.
Legislative Resolution 170 (referred to Education Committee) – Examine issues under the jurisdiction of the Education Committee. This is an open resolution that allows a Committee to investigate any subject that may show up on the public’s radar. I am leaning towards looking at the reasons for the growth in public education’s administration cost.
Legislative Resolution 237 (referred to Natural Resource Committee) – Examine all aspects and the history of the Nebraska Cooperative Republican Platte Enhancement (NCORPE) project. Committee Chairman Dan Hughes introduced a similar LR126. I plan on attending any hearings related to the issue.
This Friday, I will be in Lincoln for a briefing by the Department of Education to the Education Committee on the progress Nebraska has made to address the new federal “Every Student Succeeds Act” that replaced the former “No Child Left Behind” federal education program.
The State budget, with a .6% increase, reflects our State’s present financial situation. It’s been my experience that in private or government endeavors, when times are good we too often allow spending excesses and waste to remain in budgets. An economic downturn is the opportune time to examine costs associated with government programs.
-Public school spending will get a 2.3% increase and special education, 1%. As Education Committee Chairman, we protected the small amount of state aid funding that rural schools receive through the Income tax rebate portion of the state aid formula (TEEOSA). North Platte Public Schools fare better than most of the equalized districts; enrollment decreases have more to do with NPPS’s overall funding reduction than budget cuts. It has been disheartening to see that many larger school districts have used some of their increase in funding to give lucrative administrative pay raises instead of focusing on maintaining the quality of programs; senators have taken note of that occurrence.
-Public Welfare programs: Medicaid has had an average annual increase of 5.7% over the last 20 years. It will decrease by .8% this budget cycle. Child Welfare, historical 6.9% increase, 1.8% budget increase; Developmental disability aid, historical 7.5 % increase, budget cut of .9%; and Behavioral Health, historical 6.5 % increase, budget cut of 1.1%. The largest savings of $11 million will be from Health and Human Service’s plan to adopt the same policy that 44 other states already have, reimbursing hospitals at the lesser Medicaid rate in lieu of the higher Medicare payments for individuals who qualify for both. When historical data is taken into account the temporary 2 year budget cuts are reasonable.
-University of Nebraska (UN) and State Colleges: 2.6% historical annual increases, budget cut of .2%. Nebraska is third in the nation in per-capita tax dollar support of our higher education institutions; with that in mind, UN fared well this budget go-round.
-Correctional Services: 3% increase in its operating budget plus a transfer of $75.2 million from the cash reserves to address overcrowding and personnel shortages. With federal law suits looming, these expenditures are necessary.
Overall, I believe the budget is a reasonable response to the present shortfalls in revenues. The Governor and the Legislature worked in a manner that reflected a good interaction between the branches.
LB641 created the 10 member Nebraska Economic Development Task Force. The goal of Senator Watermeier, the sponsor, is to examine the effectiveness of existing programs and coordinate between committees any changes or creation of new programs. I agree with his premise that we show up in Lincoln every January with a multitude of proposed economic development ideas with no coordinated effort to refine the legislation into one cohesive bill. The task force seeks to have the input of seven committee chairmen. I sit on the panel as Education Chair.
This year, we introduced LB599: It would establish that development improvements on land of new infrastructures, redevelopment or new construction intended for business or housing purposes be considered business inventory until the property was occupied or sold. It is an attempt to alleviate burdensome property tax cost to developers who build speculative projects. The bill is still in committee and has the support of the Chamber of Commerce.
I bring this up to contrast my opposition to LB496, which would have added construction cost to Tax Increment Financing (TIF). Tax policy should be universal to all, it should not rely on arbitrary decisions by local elected officials as TIF is. Unlike LB496, LB599 would encourage development without damage to local property tax bases.
A local column writer recently inferred that if LB496 was enacted it would have helped reduce your property tax burden. The legislative proponents had the common sense not to make such a foolish claim. Taking normal housing growth off the tax rolls for 15 years will cause you to pay more in taxes. Someone has to support government operations and it will be you. Present TIF law at least attempts to divert those tax dollars to offset other public cost.
I stand proud of my efforts to defeat LB496 and will debate anyone on the why of it.
This column is an adaptation of the words we spoke at the Paxton Memorial Day service:
I hesitate to speak of heroics and valor on this day of remembrance. Those thoughts need not be spoken; they should be embedded in the collective conscious of America. In today’s world, the word “hero” has been degraded to describe everyday human behavior. We must strive to remember that the true meaning of “hero” is embodied in the individuals we honor on Memorial Day.
President Lincoln, after the Civil War, reminded the nation to never forget those who have given their all to protect the freedom we all share in America. Today, we keep that idea alive by gathering on Memorial Day to spend time in quiet prayer, reflection, and in thanks to God that he created the men and women who have died in defense of our country.
The Bible verse, John 15:13 “Greater love has no one than this: that he lay down his life for his friends”, is often quoted as a fitting epitaph for those individuals we honor on Memorial Day.
But another verse comes to mind that may describe a motive of those we honor today and all who have served in our military as to why they would risk life and limb in defense of our country.
Luke 11:21 “When a strong man, fully armed, guards his own house, his possessions are safe.”
Last week, after the last day of the legislative session in Lincoln, Barb and I went to Northeastern Nebraska to visit the graves of our parents and extended family, many of whom served in the armed forces of this great country.
One of the annual stops we make is to a beautiful country cemetery that lies at the end of the driveway of the farm where I grew up. There, I visit the graves of childhood friends and mentors.
As we were leaving I took note of the 15 foot cross embedded in an outdoor altar that stands at the center of the cemetery. The monument is in honor of PFC Harold Eikmeier, a local farm boy who, in 1944, died in battle in the service of his country.
My childhood was spent attending school and church at this country parish. I knew the monument was there, but had never taken time to contemplate its meaning.
It finally dawned on me what Harold had died for… his nephews were my childhood friends; his brothers were mentors, baseball coaches, and 4-H leaders; his mother and father were pillars of that small rural community.
It became clearer why American men and women risk all in war: their legacy is the lives their family and neighbors are able to live in freedom, the ability to attend that country church without fear, the right to own their home and farm. Privileges that their ancestors did not have just a couple of generations before in the lands they left behind to be free in America. NO: Freedom is not Free.
Harold Eikmeier’s grave, was a bugle call to me; Memorial Day is a time of thanksgiving to God and to honor those who died to protect our fragile freedom. On future Memorial Day weekends, I will first seek the graves of our heroes before I visit the resting places of family and friends. It is because of their sacrifice that our family members can rest in peace.
The individuals who we honor on Memorial Day laid down their lives so we can freely gather on this or any other day. It is our duty to continue their legacy. America must never forget or take for granted the sacrifices that have been made by others to protect the gifts that God has given us and those strong men and women died protecting.
I leave you with these reminders from a couple of American patriots. President Thomas Jefferson is often attributed to saying, “The price of freedom is eternal vigilance”. Mark Twain so aptly used his common sense to convey the same message when he said, “Patriotism is supporting your country all the time, and supporting your government when it deserves it”.
Tuesday’s Telegraph editorial on Tax Increment Financing (TIF) gave the wrong impression of my involvement surrounding the successful efforts to stop the advancement of LB 496 (add construction cost to TIF) and my views on local policy.
The editorial writer’s aggressive, opinionated language adds nothing to the local conversations on TIF. Most citizens support TIF when properly used. Community supporters begin to disagree when TIF is used solely for economic development by aiding private developers in areas where deteriorated conditions are not a factor. The original Pro Printing and the recent Hobby Lobby are good examples of projects where old infrastructure was replaced.
During debate with my friends Senators Stinner and Williams, my comments were directed towards support of the proper use of TIF, the State Auditor’s report, the misuse of TIF statewide, and on the true motives behind some who supported LB 496.
Point by point rebuttal:
–TIF’s 1978 addition to “Community Development Law” (Neb. Rev. Stat. 18-2101 to 18-2144) brought a specific tool to redevelopment for what was commonly referred to as urban renewal with the dictate that it could only be used where “blighted and substandard” conditions existed. The words “economic development” are not in CDL statutes. The Legislature’s intent assumed economic development happens, TIF exists to redirect that development to blighted and substandard areas.
–The words “blighted and substandard” are in Article VIII-12 of the State Constitution; it is wrong to imply those words could be removed by legislative action. Acknowledging the “and” used in TIF’s constitutional language instead of the “or” in CDL law is critical to understanding TIF’s purpose.
–“…undeveloped land?”: a 1998 State Supreme court case “Fitzke v. City of Hastings” ruled, “If a private development project is ineligible for TIF because it is located on land which is not blighted or substandard within the meaning of the CDL, it logically follows that eligibility could not be created by simply incorporating the project site into an adjacent area which has been declared blighted or substandard and revising the redevelopment plan for that area to include the project. Such a result would be contrary to the legislative intent underlying the CDL, which is to eliminate blighted and substandard URBAN areas through a cooperative effort of the public and private sectors: not to aid private developers.” The court ruling has been ignored in recent years. Why? Because as the State Auditor pointed out, there is no State oversight of TIF use other than a citizen hiring a lawyer to sue in civil court.
–No claim has been made that cities can’t use public funds in a TIF redevelopment project. What is understood by statute is that proceeds from TIF should be used to help offset those costs.
–TIF bonds in the past have been sold directly to the developer with above market interest rates. The practice’s legality has not been questioned, its ethics have.
–Concerning North Platte’s diversion of TIF dollars to an unrelated loan fund, the Auditor’s report did not cite related statutes pro or con. The legality of the practice will have to be decided by a court.
The one time I mentioned North Platte as a city was in praise. “North Platte is doing fine. Property tax rates are going down. We slowed down TIF, but we are doing just fine, housing market is strong”. My positive testimony gave the impression that Lincoln County residents respect the rule of law and do not believe the end justifies the means.
I understand that an editorial is the opinion of one individual with personal political views. It is obvious the writer of the Telegraph editorial would not vote for this Senator. It is also obvious that if I had an opportunity, I would not vote for them, but I love political debate and I remain an avid reader of the Telegraph.
I told you when I knocked on your door that I would represent you, not the special interest who dismisses you as the “workforce”. Decide for yourself, the transcripts of the debate will be posted to our legislative website early next week. Read and enjoy. Intimidated? I am not!
Please do not hesitate to contact our office, email@example.com or 402-471-2729, with any comments, questions or concerns
LB496: It is frustrating to note how the tide pushing the will of the people can turn with the influence of special interest money. We started this legislative session with an audit on Tax Increment Financing (TIF) completed by State Auditor Charlie Janssen in hand. The Auditor planned to look at 35 projects across the state. He was not able to audit 13 projects because those communities did not reply in a timely fashion; of the remaining 22–errors and discrepancies were found in 19. The most common abuses found were “expenditures could not be traced to supporting documents” and “Redevelopment plans did not include required elements, or the project was not in conformity with the development plan and was not properly approved by the governing body.” The Auditor’s recommendation included this statement, ”Keeping the interests of the Nebraska taxpayer in mind, however, it appears that the Community Development Law and supplementary statutes that authorize TIF projects may merit legislative review to safeguard taxpayer’s dollars and to ensure that publicly funded redevelopment are carried out properly.”
I introduced TIF legislation to the Urban Affairs Committee with the expectations that (1) the Auditor’s report reflecting the will of the people would be followed and we would put state oversight over TIF, (2) would clearly define TIF’s constitutional purpose of urban renewal, and (3) reaffirm that the tax dollars used in TIF would be used correctly on public infrastructure cost. Always keeping in mind the true purpose of property taxes, to ensure we as members of a community equally share in funding our public safety, schools, and common infrastructure, those who profit from TIF made sure those bills never left the committee.
Instead, as the session came near its close, what came to the floor for debate was legislation to greatly expand TIF (LB496) by including the construction cost of private housing projects in the redevelopment expenses. It was defeated during filibuster. The fact that this legislation had a very good chance to pass is an outrage against good government and a strong statement on the power that special interest has on politicians through campaign donations.
LB512: Education Committee omnibus priority bill. Three of its provisions are:
The remainder of this week, we will be concentrating on upholding the Governor’s budget vetoes. The State’s tax collections are still on a downward trend. April’s numbers were $55 million short. We have no choice but to cut expenditures. I have always believed that downturns in our economy is the time for government to cut fat and waste from their budgets and for politicians to look at what is and isn’t a necessity of government. We are in that process today. I will support the Governor’s vetoes and the resulting final budget.
Please do not hesitate to contact our office, firstname.lastname@example.org or 402-471-2729, with any comments, questions or concerns
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