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This winter, as I contemplated how to address our burdensome property tax issue, I took into consideration that expanding our property tax base should be an option. Thus, with the passage of Medicaid expansion in November, I wondered why so-called nonprofit hospitals needed to be exempted from property taxes. Our state Constitution states, “The Legislature by general law may classify and exempt from taxation…property owned and used exclusively for educational, religious, charitable, or cemetery purposes, when such property is not owned or used for financial gain or profit.”
There are 104 hospitals in Nebraska. Eight are for-profit, tax-paying facilities (Kearney Regional Medical Center, for example), 37 are tax-exempt, government-owned and operated (Gothenburg, Callaway and Imperial are examples) and the remaining 59 are classified as nonprofits (Great Plains Health for example).
Does anyone believe that their mission fits under the 100% “exclusively charitable” classification in the Constitution? I believe that answer to be No, especially with the passage of Medicaid expansion and the expected infusion of over $600 million in Medicaid, most of which will end up in hospital coffers. In most cases, those who received charitable care in the past will now be covered by Medicaid. Considering that in 2017 Nebraska hospitals only gave $131 million in charitable care, the $600 million expansion of Medicaid adds up to a nice profit.
A recent study by the Urban Institute shows that hospitals in Medicaid expansion states have more revenue, lower uncompensated care cost (charity?), and fatter operating margins. Margins improved by 2.5%. Charities normally do not have profit margins.
Another reason why non-government-owned hospitals should pay taxes is the recent announcement of CHI Health system’s recent purchase of the naming rights of the former CenturyLink Center in Omaha for $23.6 million. In addition to the naming rights, CHI Health will get to use one corporate suite and four club level seats for all events at the arena. Why does a nonprofit need to advertise? Who is CHI competing with in Omaha, the government-run University of Nebraska Medical Center?
Hospitals, like most profitable businesses, pay high compensation to administrators and other highly educated employees. This is unlike the compensation offered to employees and volunteers at what one would consider a true charity like a soup kitchen or a public health clinic.
What better way for a hospital to support a local community than to become a taxpaying member of the community, helping to support our schools, public safety and maintaining the community’s infrastructure? If a hospital is going to operate like a for-profit corporation, I believe they need to pay taxes like one! My bill to address this issue, LB529, was heard in the Revenue Committee last Thursday.
LB63, our bill to make positive changes to the Mutual Finance Organizations and allow for local property tax control by rural fire districts, passed Final Reading last Friday by a 45-0 vote.
LB65, our bill to modernize the State Electrical Act thus allowing underground boring contractors to install electrical conduit without being a licensed electrician and instead only being supervised by an election, passed Final Reading last Friday by a 44-0 vote with one present not voting.
LB148, our Open Meetings Bill concerning local government budget hearings, requiring meeting announcements in newspapers, and the necessity for the NRDs’ interlocal agreement-N-CORPE to have a budget and hearing, came out of the Government, Military and Veterans Affairs Committee.
LB 606, our bill to define in law the ability of NRDs to sell land without jeopardizing the augmentation project, will be heard in the Natural Resources Committee next Wednesday, March 13. We would appreciate emails of support. Please send them by 5:00 pm on Tuesday to the Committee.
Property tax relief is still a top priority for the Legislature this year. The Revenue Committee, led by Senator Linehan and of which I am a member, is working on a package to reduce property taxes and find a solution to fund it.
I regret my columns have not been available weekly; time management is at a premium this session. I am not one to report what should be done, but instead what has been accomplished.
Contact Sen. Mike Groene: email@example.com or 402-471-2729.
LB695, which is my Property Tax Relief/TEEOSA Stabilization bill, was heard in the Education Committee on Tuesday. The bill is a result of the TEEOSA Study Group we formed last summer. Below is an abbreviated version of my opening remarks.
“LB695 will provide long-term property tax relief for all Nebraskans, stabilize the TEEOSA formula’s proportional funding of state income, sales and local property taxes, plus make the formula reflect the reality of real-life economic factors.
LB695 addresses Nebraska’s overburdensome reliance on property taxes to fund our public schools. I have come to an understanding that the TEEOSA formula has flaws, but it still remains the best option we have to provide ‘free instruction in the common schools of this state’ for children in our 244 school districts with varying student populations from 60 to 51,000.
A) Foundation Aid: (property tax relief for Wallace, Hershey, Brady, Maxwell, Sutherland) Establishes a stabilizing factor in the amount of state aid given to each school district by using a base per student funding amount. LB695 proposes to dedicate 25% of the State’s prior year total income taxes (both individual and corporate) plus sales tax revenues to be distributed equally to school districts on a per K-12 student basis. In 2018, total state income and sales tax revenues were $4.28 billion. There are 307,753 K-12 students enrolled statewide in our public schools, which would equate to a foundation aid factor of $3,474.40 per student. Creating a reliable state aid funding source through foundation aid will give long-term stable property tax relief to taxpayers in the 175 districts that receive no equalization aid, as well as those hovering towards receiving none. Foundation aid will replace the income tax rebate.
B) Property Tax Relief for Equalized Districts (North Platte): All districts will receive foundation aid as a resource. Districts lacking enough local resources to fund their schools will still receive equalization aid. LB695 proposes lowering the max levy from 1.05 to .95; therefore, the local effort rate used in the formula will be lowered from 1.00 to .90, giving those property taxpayers a 10% reduction in their school general fund property taxes. State equalization aid will fill in the created funding gap.
C) Local Property Valuation Distortion: LB695 proposes to slow growth of the ‘local effort yield’ from property taxes by creating a base year yield (.90 LER) in the 2020/21 school year. In subsequent school years, growth will be limited by new construction growth and the CPI-calculated inflation rate. In the future, this provision will stop the funding shift to property taxes by alleviating the distorting effects of unreasonable valuation increases on the taxes paid by local property owners.
D) Growth of School Needs: LB695 uses factual economic data to adjust needs growth. Instead of the present arbitrary base limitation that is used as the 2.5% allowable growth rate factor, in the future we will use the most recent available year’s CPI-calculated inflation rate. The inflation rate used for the allowable growth rate will not be allowed to go below 0% or above 2.5%.
E) Net Option Funding: With the enactment of LB695, the foundation aid ($3,474.40) follows the option student; therefore, because the net option school district is now only lacking the property taxes paid by the students’ parents, the correct thing to do is for the state to assist the school with an amount equal to the statewide average property tax cost. The average general fund property tax expenditure per student would be $6.194.51 for the 2019/20 school year.
LB695 will balance over time the ratio between state and local funding. State revenues have had a healthy annual 4.8% increase over the last 38 years. As those revenues grow, so will the state’s 25% contribution to foundation aid, causing the reliance on property taxes to continue to ease over time.”
Thursday, property tax relief bills from Senators Friesen (LB497) and Briese (LB314), and my LB677 will have hearings in the Revenue Committee. I believe to achieve property tax relief, it will be necessary to join forces and create one bill out of many. To quote President Lincoln, “A house divided against itself, cannot stand”.
Contact Sen. Mike Groene: firstname.lastname@example.org or 402-471-2729.
The legislative process is in full swing. Mornings are spent on the floor debating bills that have come out of early committee work, most are just technical changes to existing laws. For example, the Education Committee has sent out three bills. One, LB115 by Senator Blood, whose district includes Offutt Air Force Base, eased the early school enrollment requirements for children of military personal who are being transferred to Nebraska for duty. It only affects a few military families, but to them, it is a frustrating hurdle to clear as they prepare to move to Nebraska.
LB66 was the first bill debated this year that met resistance and was eventually killed on the floor. It would have required any city with a population of over 800 citizens to include in its City’s Comprehensive Plan an early childhood element to assess the availability of quality early childhood education, health and child care. I spoke against the legislation because it was another mandate to local governments. A town does not have the personnel to do such an evaluation and would be forced to hire a consultant, with your tax-dollars, to do the study for them. We already have plenty of existing programs that are tied to receiving certain federal and state tax-dollars for early childhood programs, available in areas of education and health and human services. City councils have enough on their hands worrying about filling pot holes and zoning regulations, they don’t need to worry about if Mom and Dad are capable of managing the early years of their child’s development.
Senator Chambers took offense to the defeat of LB66 and we found ourselves in the unlucky position of our LB63 just happening to be the following bill. Therefore, he proceeded to filibuster a bill he basically found no fault with. After every election, Senator Chambers puts on a clinic for the new freshman members on his mastery of legislative rules. In some ways his antics serve the body well. He does educate the freshmen and refresh the memory of incumbent senators on the proper way to run a filibuster, and more importantly, he slows down the process and actually unites the body on an issue. By the time he is done, everyone on both sides of the political aisle is mad at him.
Senator Chambers has made it clear that he literally stands alone (in 45 years he has never sat in his assigned chair, he always stands) and he does not seek or need friends or political allies. He is a rare individual that can do it and do it well, even at the age of 82. I will say that I used to think the longest five minutes I ever spent was the five minutes before I asked my wife to marry me, but 34 years later I have come to understand I was wrong. The longest five minutes in the world is the proceeding five minutes after Senator Chambers hits his light the third time to address the body.
After three hours of political pontificating, LB63 was passed to Select File 41-0. As I mentioned last week in the column, LB63 is a simple local control and property tax relief effort concerning rural fire districts.
Next Monday, what we refer to as our teacher/student protection act, LB147, will have its hearing in the Education Committee. The bill gives teachers a tool to better control the overall behavioral climate in their classrooms and gives administrators and teachers guidance to address student behavior directly with parents and students.
Next Tuesday, LB695, our attempt at long term property tax relief through a fix of the state’s school funding formula (TEEOSA), will have its hearing on Tuesday in the Education Committee. The bill would create a reliable state aid source through the creation of public school foundation aid for each student. The source of the aid would be based on 25% of the state’s total income and sales tax receipts.
The road to success on any major legislation is long and tedious. We see a path forward for property tax relief, but there will be bumps and branches to clear before we get there.
Contact Sen. Mike Groene: email@example.com or 402-471-2729.
We are at the 16th day (Thursday) of the 90-day session of the 106th Legislature. The pace has been hectic. There have been 744 bills introduced. I introduced 17. Four of those are standard legislation that the committee chairman traditionally introduces to cover annual Department of Education and committee cleanup work. The Education Committee was assigned 56 bills to address during the 16 afternoons on which the committee holds hearings. The Judiciary Committee received the most (142 bills) and one resolution to be heard on 26 afternoons of hearings. As you can probably guess, many afternoons will turn into evenings. Nebraska has a unique system that allows all citizens, as the second house of the Legislature, to testify on bills at committee hearings. I remember from my past as a concerned citizen too often testifying in front of school boards and city councils where the members sat silently and asked no questions. Hence as Chairman of the Education Committee, out of respect for the testifiers, I try to engage with them; many of which have taken a day off of work, or driven long distances to testify for 5 minutes. They appreciate the respect questions from the committee offers them, and quite frankly, many times amendments are made to legislation as a result of testimony.
Each year as the session begins, the Legislature debates the rules that govern our legislative process, either accepting the present ones or including changes. I picked up the mantle from past senators who introduced changing the present rule that allows a secret vote on the speaker and the committee chairs to a public vote. Our argument was the Legislature should honor the citizens’ expectation of transparency in government which was clearly exemplified in Senator George Norris’ original 1934 constitutional amendment. We all associate his successful effort with the creation of the unicameral form of a legislature that Nebraska has had since 1937, but there were actually 10 constitutional requirements in his amendment that governed the operation of the Legislature, including non-partisan elections, senator numbers limited to no less than 30 members and no more than 50, length of senator’s terms, salary limitations, and that “the request from any one member to be sufficient to secure a roll call on any question”. That last requirement in our State Constitution, simply put: it is clear that any question (vote) taken by the legislative body must be public. Claiming a vote is not a question does not change the constitutional mandate. The rule change failed by a 25 to 22 public vote. Next year, you will be assured a senator will request a roll-call vote on a chairman vote and when denied, the Nebraska Supreme Court may need to decide the issue.
Our bill, LB63, addressing property tax levies for fire districts in counties with Mutual Fund Organizations (MFO) has had its Revenue Committee hearing and has been advanced to the floor for debate. When a county creates an MFO, it allows for some of the taxes you pay on your insurance policies to flow back into our fire district’s budgets. Fire districts in Lincoln County received $300,000 last year. LB63 will allow individual fire districts to have tax levies below an agreed upon common levy (in Lincoln County it is 3 cents) for 2 out of 3 years of the agreement. It’s basically a local control measure that will allow lower property taxes for fire district residents that have well-managed volunteer fire departments. Also, our LB65, changing electrical codes to allow horizontal boring machine operators to be non-electricians as long as their work is supervised by a licensed electrician, was heard by the General Affairs Committee on Monday. It’s a common-sense elimination of overregulation that will lessen the cost of electrical work for the consumer while allowing electrical and horizontal boring contractors to work together.
So far in the Education Committee, we have heard a couple of controversial bills: Senator Erdman’s LB73, requiring the national motto “In God We Trust” to be displayed in all public schools, and Senator Slama’s LB399, updating Nebraska’s Americanism statutes. I will expand in future columns on those bills’ outcomes.
Contact Sen. Mike Groene: firstname.lastname@example.org or 402-471-2729.
Last Wednesday, the first day of the session, I was honored to be re-elected as the Education Committee Chairman by my colleagues. Below is the main body of the nomination speech I gave before the vote.
“Over the last two years, the Education Committee successfully worked with the Appropriations Committee and the Governor to fit the needed changes to school funding into our budget. We worked to assure that our schools were treated equally and fairly: from Loup County, with 60 students; to our largest Omaha Public Schools, with 51,000 students. We plan on repeating that effort as we address the budget cycle that lies before us.
We worked with the Department of Education to assure their annual priority cleanup legislation was passed into law. We have established a good relationship, built on trust, with the Department and Commissioner Blomstedt.
We enacted into law the hard work of Senator Linehan, with the help of Senator Pansing Brooks, defining by statute the importance Nebraska citizens put in our children’s ability to read and read well. We hold the expectation that literacy must be the top priority of public education. For if one can read well and have the vocabulary to understand the written word, all knowledge is available to them.
We passed into law legislation that defined the necessity of early detection of students showing signs of dyslexia, a learning impairment which can be one of the biggest hurdles standing in the way of a student’s ability to reach their full potential, and we eliminated a growing abuse of early retirement payments by a few school boards.
Much more remains to be done. It is time for this body to fix the state school aid formula ‘Tax Equity and Educational Opportunities Support Act’ (TEEOSA). It is time for this body to fulfill the promise of our state constitution that, ‘The Legislature shall provide for the free instruction in the common schools of this state.’ We can no longer pass the majority of that duty off to the property taxpayers of Nebraska. Yes, local effort should be part of the funding, but local taxpayers should not be required to shoulder an undue burdensome share in any of our common schools.
To mend the urban-rural divide on this issue, we must make state funding truly equitable to all. As Chairman of the Education Committee, I will bring legislation that reflects the efforts during this past interim of an informal TEEOSA study group made up of 11 senators who had in the past showed a legislative interest in fixing TEEOSA. We can, and we must, work together to fix TEEOSA.
This year we need to update our American civics and social studies statutes to aid and guide the Department of Education as they update the social studies standards. We must emphasize to our schools that our children understand that freedom is not free; to maintain it, they must understand the sacrifices of the Americans who came before them. They must be informed of their civic duties.
I will continue to pursue legislation to empower our teachers with the ability to protect themselves and our children from violence in the classroom and to enable our teachers to be in charge of the learning atmosphere in their classrooms. We expect much from our teachers, some may say too much, but they are on the frontlines of the cultural changes in our society. We must reemphasize to teachers they have the support of the citizens of Nebraska and give them the tools to help instill within our children behavioral boundaries.
The citizens of Nebraska expect this body to be successful as we address these issues. I am willing to help lead the efforts as your Chairman of the Education Committee. Your vote of support will be humbly appreciated.”
I was re-elected on a 26 to 20 vote. Now the work begins.
Contact Sen. Mike Groene: email@example.com or 402-471-2729
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
Since the election, I have purposely avoided writing columns. I feel we all needed a little time away from the political stench of the elections and there was no need to write, just to be writing. My hope is that most of us have more important things to consider besides the grind of politics during the holiday season. This Christmas season, Barb and I watched the new Christopher Robin movie with our granddaughter. In it the fictional children’s philosopher Winnie the Pooh made profound statements that struck true to me. The words of the writer were to the effect that, sometimes doing something is doing nothing and sometimes doing nothing is doing something. I chose to do nothing in the line of redundant writing until something of import happened that needed to be discussed.
We’re now just a few days short of commencing the 106th Legislature, First Session on January 9th with the swearing in of 26 recently elected senators of which 13 are incumbent, 11 are newly elected and 2 are Governor Appointees. During the first days of the session we will also elect the Speaker of the Legislature and Committee Chairs; I again am running for Education. I have had no complaints from colleagues as to the way we managed the committee last year or about the accomplishments that came from committee actions. I am proceeding under the belief that I will be elected again to the position, but with term limits and the resulting 13 new senators plus the political reality that personal feelings, pressure from the lobby and partisanship play a part in the outcomes of democratic government, we understand there is no guarantee that the person with the necessary ability and experience always wins.
That said: On the Education front, we are moving forward with legislation to fix our over-reliance on property taxes to fund our schools. The bill’s content is based on what we learned through our TEEOSA study group. We are also introducing a revised version of last session’s Classroom Discipline bill, to empower teachers to legally protect themselves and students from violence and to enable them to create a better classroom climate. We are also bringing a revised version of last session’s American civics bill. An update of the present 1940’s Americanism statutes is needed more now than ever as we continue to watch the deterioration of America’s civility. We owe it to our children to inform them that freedom and rights have a cost, to teach them of the sacrifices of those who came before them and that they have a civic duty to be informed and involved in government.
My office is continuing to pursue clearly defining in statute that NCORPE can sell the land and continue to operate the augmentation project. It’s hard for me to convince my urban colleagues that we need property tax relief in rural Nebraska when they see the total waste and disrespect of tax dollars being expended on unnecessary land purchases where $50 million or more could be saved if only all parties involved would work together to make the land sale happen.
Other areas of legislation we are pursuing:
— Legislation to increase transparency in our open meetings statutes.
— Legislation to eliminate a burdensome and costly electrician code on underground boring.
— Easing rural fire department tax levy requirements when involved in mutual funding agreements.
— Legislation brought to us by Sheriff Kramer to alleviate burdensome occupational regulations on operating lie-detector devices that add unnecessary cost to police departments.
One of the truths I have learned at the Capitol is that the folks who pay their taxes and act as good public servants are often too busy with their work and family to be in Lincoln to present their views, but those who spend or profit from your tax-dollars are in full force, lobbying to keep your taxes flowing to them and, of course, wanting more. As we go into the New Year and the new legislative session, you can expect me to be vigilant for the threats that could grossly expand the State government or abuse your dollars in the system, but that’s not a new resolution for me.
Contact Sen. Mike Groene: firstname.lastname@example.org or 402-471-2729.
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