Photo by Lincoln County Detention Center
Now that the Legislature is not in session, we will attempt to explain the facts behind the happenings on continuous legislation.LB 98 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 it will sunset again next year.
We stood against LB 98’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: the Platte, Republican, Loup, Niobrara, Elkhorn, Nemaha, Blue, and Missouri river systems. The state has designated 10 NRDs in the Republican and Platte River basins as fully appropriated or over appropriated on ground water usage, within areas.
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 included 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.
All of the districts involved do have special projects 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 had 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 district's needs.
• In 2010, the Legislature allowed those districts that had IMPs in place to enter into bonded indebtedness by issuing river-flow enhancement bonds, 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 affected 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, email@example.com or 402-471-2729, with any comments, questions, or concerns.
(First published in the Bulletin's July 26 print edition.)