NEBRASKA LEGISLATURE
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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 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

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.

Wednesday May 17, 2017

Education
Location: Room 2102
Time: 12:20 PM

Document Introducer Description
Appointment Peterson, Carter – Board of Trustees of the Nebraska State Colleges
Appointment Bieganski, Gary – Board of Trustees of the Nebraska State Colleges
Appointment Meyer, Jerald – Board of Educational Lands and Funds
Appointment Hadley, Marilyn – Nebraska Educational Telecommunications Commission
Appointment Carpenter, Stan – Nebraska Educational Telecommunications Commission
Appointment Smith, Clay – Nebraska Educational Telecommunications Commission
Appointment Gray, Cindy – Technical Advisory Committee for Statewide Assessment
LR98 Wayne Support the call to action of the My Brother’s Keeper Initiative and Community Challenge to address opportunity gaps faced by boys and young men of color nationwide

Monday 3/20

Business and Labor
Location: Room 2102
Time: 1:30 PM

Document Introducer Description
LB598 Groene Require consideration of certain factors by the Commission of Industrial Relations when establishing wage rights

Education
Location: Room 1525
Time: 1:30 PM

Document Introducer Description
LB155 Brasch Require successful completion of a civics examination as a prerequisite to high school graduation
LB308 Brasch Change provisions relating to the committee on Americanism
LB14 Krist Require successful completion of a civics examination as a prerequisite to high school graduation

Tuesday 3/21

Education
Location: Room 1525
Time: 1:30 PM

Document Introducer Description
LB540 Stinner Provide for a temporary aid adjustment factor in the Tax Equity and Educational Opportunities Support Act

Wednesday 3/22

Health and Human Services
Location: Room 1510
Time: 2:00 PM

Document Introducer Description
LB128 Groene Change eligibility provisions relating to the Supplemental Nutrition Assistance Program

Monday 3/13

Banking, Commerce and Insurance
Location: Room 1507
Time: 1:30 PM

Document Introducer Description
LB594 Groene Require a limited liability company seeking a tax benefit to file an amended certificate of organization

Tuesday 3/14

Education
Location: Room 1525
Time: 1:30 PM

Document Introducer Description
LB630 Larson Adopt the Independent Public Schools Act
LB650 Linehan Change provisions for teaching certificates
LB568 Erdman Change provisions related to temporary teaching certificates

*order of bills may change

Monday 3/6

Education
Location: Room 1525
Time: 1:30 PM

Document Introducer Description
LB634 Wayne Include virtual school students in the state aid to schools formula
LB409 Groene Change the base limitation and local effort rate for school districts
LB484 Kolowski Create the School Financing Review Commission

Tuesday 3/7

Education
Location: Room 1525
Time: 1:30 PM

Document Introducer Description
LB651 Linehan Adopt the Nebraska Reading Improvement Act
LB662 Linehan Establish a grading system for schools and school districts

Thursday 3/9

Revenue
Location: Room 1524
Time: 1:30 PM

Document Introducer Description
LB599 Groene Exempt certain improvements on land from taxes as prescribed

Health and Human Services
Location: Room 1510
Time: 1:30 PM

Document Introducer Description
LB596 Groene Exempt equine massage therapy from credentialing and regulation under the Veterinary Medicine and Surgery Practice Act

Monday 2/27

Education
Location: Room 1525
Time: 1:30 PM

Document Introducer Description
LB398 Wayne Provide requirements for public school districts relating to swimming activities
LB569 Friesen Establish the Community College Task Force and sunset community college levies
LB490 Walz Adopt the College Choice Grant Program Act

Tuesday 2/28

Education
Location: Room 1525
Time: 1:30 PM

Document Introducer Description
LB521 Walz Change provisions related to early childhood education in the Tax Equity and Educational Opportunities Support Act
LB511 Education Committee Change provisions for payment of educational costs for state wards and students in residential settings
LB512 Education Committee Change provisions related to education

Wednesday 3/1

Judiciary
Location: Room 1113
Time: 9:15 AM

Document Introducer Description
LB478 Groene Provide for possession of archery equipment and knives for recreational purposes

 

 

Monday 2/20–President’s Day observed. Capitol offices closed, no hearings

——-

Tuesday 2/21

Urban Affairs
Location: Room 1510
Time: 1:30 PM

Document Introducer Description
LB262 Groene Change provisions relating to undeveloped vacant land under the Community Development Law
LB489 Groene Redefine development project under the Community Development Law
LB597 Groene Provide for application process through county assessor and Tax Commissioner prior to using tax-increment financing

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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