1996 General Election - Intitiatives 411-412

By the end of the 1995 Session, the Nebraska Legislature had at best flirted with the idea of creating levy limitations for schools and other local governments.  LR 93CA, a constitutional amendment offered by Senator Jerome Warner, was introduced late in the 1995 Session but was never debated on the floor.  While LR 93CA did not pass, it did serve as the genesis of LB 1114, which passed in 1996 and would implement statutory levy limits on all local governments.  Under LB 1114, school districts would exist under a $1.10 levy lid beginning in 1998 and the lid would then tighten to $1.00 in 2001.¹

In 1995 there was a sort of political tug-of-war going on between the Legislature and various outside groups and organizations on the issue of property tax relief.  Tax activists Stan Dobrovolny of Atkinson and Ed Jaksha of Omaha were hard at work on petition drives to stem government spending and tax collection.  Neither would meet minimum signature requirements in time for the 1996 General Election.  However, the citizen-based efforts did lead Senator Warner to introduce LR 93CA (1995), perhaps in an effort to demonstrate that the Legislature was intent to do something.  And the Legislature would do something, but not until 1996, and by then another movement had already organized and prepared to take on the age-old issue of property tax relief.

The movement called itself the Citizens for Responsible Tax Policy, a coalition of various organizations, including the Nebraska State Education Association (NSEA) and the Nebraska Farm Bureau Federation.  In fact, the coalition at first included other member organizations, including the Nebraska Council of School Administrators and the Nebraska Association of School Boards, among others.  These groups would eventually withdraw from the coalition leaving essentially the NSEA and Farm Bureau as the main groups within the movement.

Nineteenth Century author Charles Dudley Warner is credited as saying, "Politics makes strange bedfellows."²  Some people in 1996 believed the adage was appropriate with regard to a petition movement jointly lead by the teachers' labor organization and one of the state's major agriculture-oriented organizations.  "For years, teachers have been pitted against farmers," said Karen Kilgarin, NSEA spokeswoman, "In this case, farmers and teachers have common concerns and common interests."³  In truth, both organizations desired lasting property tax relief in Nebraska and both believed strongly in public education.  But neither organization was apparently satisfied with the outcome of the 1996 Session and the passage of LB 1114.  The NSEA, in particular, was concerned that replacement revenue from the state would not be forthcoming, or sufficiently forthcoming, to compensate for the local revenue lost due to the statutory levy lids imposed under LB 1114.  "[W]e are not willing to dismantle public schools in the process of reforming property taxes," said Jim Griess, NSEA Executive Director.⁴

The NSEA certainly had an ally in the Farm Bureau, but the bulk of the funding to promote the petition drive would derive from the teachers' organization itself.  The Farm Bureau's involvement presented a more broad-based appeal to the petition effort and suggested that it was not merely an education-oriented effort.  So what exactly did NSEA and the Farm Bureau propose?

The initiative petition proposed a fairly lengthy amendment to the Nebraska Constitution that would:

• Make "quality education" a fundamental constitutional right of each person;
  
  
• Make "thorough and efficient education" of all persons between the ages of 5 and 21 in the common schools the "paramount duty" of the state;
  
  
• Authorize the Legislature to provide for the education of other persons in state institutions;
  
  
• Direct the Legislature to establish a school finance system that provides for "thorough education" in "efficiently operated public schools";
  
  
• Require that for 1998-99 each school district would receive at least as much per pupil finding as in 1997-98 [hold harmless clause];
  
  
• Create constitutional property tax levy limits for various governmental subdivisions, including school districts, which could be exceeded by a majority vote of the voters;
  
  
• Authorize the Legislature to prescribe the means to determine the fair market value of real property for property tax purposes; and
  
  
• Provide that the value of real property for property tax purposes may not exceed 80% of its fair market value for agricultural and horticultural land, or 100% of its fair market value for other real property.⁵

The amendment proposed a combined property tax levy cap in cities and villages at $1.80 per $100 of assessed valuation beginning in 1998.  For rural areas, the levy cap would be $1.30 per $100 of assessed valuation.  The maximum levy for school districts would be constitutionally set a 90¢ per $100.  The amendment authorized the Legislature to establish the levy limit for all other political subdivisions so long as the total authorized levy did not exceed the constitutional total levy cap.⁶

The concept of constitutionally based levy limits certainly was nothing new.  County governments in Nebraska have existed under a constitutional levy limit since the adoption of an amendment to the State Constitution in 1920 through the 1919-20 Constitutional Convention.⁷  As amended in 1992, the provision states:

County authorities shall never assess taxes the aggregate of which shall exceed fifty cents per one hundred dollars of taxable value as determined by the assessment rolls, except for the payment of indebtedness existing at the adoption hereof, unless authorized by a vote of the people of the county.⁸

Senator Warner's LR 93CA (1995) also proposed to amend the Nebraska Constitution with a maximum total levy of $2.50 per $100.  School Districts would have existed under a $1.00 levy cap under LR 93CA.⁹

However, part of the reason the Legislature abandoned the constitutional amendment approach to levy limits was that, once adopted by the people, it would be difficult to adjust the prescribed limits as necessary due to changing economic times.  This same argument would serve as rationale for some representative organizations to withdraw from the Citizens for Responsible Tax Policy coalition, and also used by opponents of the amendment in order to dissuade people from voting for it.  Proponents of the amendment were attracted to the notion that the proposed constitutional amendment would result in dramatic property tax relief.  Craig Christiansen, NSEA President and co-chair of the coalition, believed the proposed amendment would reduce by $400 million the existing annual collection of $1.4 billion in property taxes statewide.¹⁰ Opponents agreed that it would cause property tax relief.  It would also cause dramatic funding shifts and increases in state taxes.

Levy limits aside, the other provisions of the amendment appeared at first blush to be highly pro-education.  And who among advocates of public education could argue with that?  The amendment proposed to make "quality education" a fundamental constitutional right of each person.  A fundamental right equates to the rights a person has according to the Constitution, and often refers to natural human rights, such as the right to privacy and fair treatment under the criminal justice system.  The amendment would make "thorough and efficient education" of all persons between the ages of 5 and 21 in the common schools the "paramount duty" of the state.  A similar clause can be found in the Constitution of the State of Washington:

It is the paramount duty of the state to make ample provision for the education of all children residing within its borders, without distinction or preference on account of race, color, caste, or sex.¹¹

The NSEA/Farm Bureau amendment would also direct the Legislature to establish a school finance system that provides for "thorough education" in "efficiently operated public schools."

But what did all this actually mean?  What does "quality education" mean and how does one know if it has been achieved?  What does "thorough and efficient education" mean?  What are "efficiently operated public schools"?  The proponents of the amendment may have had some idea about the meaning of these provisions, but many of its opponents were less sure.  Many school administrators and school board members, for example, were hesitant about the contents of the amendment because, in part, they were not positive about the affect of the provisions on public education.  It sounded good, but what were the actual consequences of the amendment and who would make those determinations?

Some feared the answer to be lawyers, judges, and the judicial system in general.  "When you put it in the Constitution, the Legislature is not going to define what that is," said Phil Young, a leader of the opposition movement, "The court is going to define it."¹² For others, the fear was less oriented to judicial control as legislative control if the amendment became part of the Constitution.  In October 1996, the Nebraska Council of School Administrators invited William Thro, Colorado Assistant Attorney General, to present a constitutional law seminar for school officials.  Representatives of the NSEA were also in attendance.  Thro was considered an expert on school finance lawsuits for the National Association of Attorneys General.  Thro, himself, did not have an opinion about whether the amendment should or should not be adopted.  He offered both pro and con arguments to the amendment.

Thro believed that if voters adopted the amendment, then Nebraska would possess the nation's strongest constitutional public education clause.  At the time, the Nebraska Constitution merely provided that, "The Legislature shall provide for the free instruction in the common schools of this state of all persons between the ages of five and twenty-one years."¹³  Thro said about 15 states, including Nebraska, had similar clauses with relatively general provisions for public education.  Thro anticipated significant consequences under the proposed amendment, some of which were good and others perhaps not so good.  "You're making a fundamental change that may have some severe ramifications down the line," Thro said, "You're going to have the state providing more and more money and, as a consequence, exercising more and more control."¹⁴

Of course, by October 1996 the NSEA/Farm Bureau petition campaign had successfully advanced to a higher level.  On September 12, 1996, Secretary of State Scott Moore officially announced that the petition movement had garnered about 103,000 valid signatures, only about 4,000 more than the minimum number required.¹⁵  For petition organizers, that was the good news.  The bad news actually preceded the good news when Lancaster County District Judge Jeffre Cheuvront upheld Attorney General Don Stenberg's decision to split the proposal into two separate constitutional amendments.  Judge Cheuvront wrote:

The proposed amendment creating a new fundamental constitutional right to a "quality education" does not have a natural and necessary connection with the proposed amendment concerning property taxes so as to constitute a single proposition.  Nor are the two amendments part of one general subject, since the petition amends two distinct sections of the Nebraska Constitution concerning two distinct subjects, and the creation of a new constitutional right to a quality education has far-reaching implications unrelated to property taxes.¹⁶

Attorney General Stenberg believed the entire contents of the proposal within one amendment would violate a clause in the Nebraska Constitution, which states, "Initiative measures shall contain only one subject."¹⁷ The NSEA and Farm Bureau appealed the decision to the Nebraska Supreme Court, but were unsuccessful.

Naturally, the decision to divide the revenue and education provisions of the measure meant more work on the part of the Citizens for Responsible Tax Policy to successfully promote both amendments.  It simply would not do to have one pass and one not, as far as NSEA and the Farm Bureau were concerned, although in reality the provisions were severable and either provision could have survived without the other.  Secretary of State Moore officially named the education component of the amendment as Initiative 411 and the revenue component as Initiative 412.

NSEA and the Farm Bureau collectively spent at least $908,049 in its campaign to pass Initiatives 411 and 412, as reported to the Nebraska Accountability and Disclosure Commission.  Randy Moody, campaign manager for the initiative campaign, reported that about $240,000 had been spent in payment of petition circulators and for other expenses to qualify the two issues for the ballot.¹⁸  The Coalition to Prevent Tax Increases, a group of businesses opposed to the initiatives, reported spending $737,801 in its campaign to derail the amendments.¹⁹ Many among the business sector feared the initiatives would, if passed, cause major increases in sales and/or income taxes in order to pay for the inevitable shift from local to state funding sources.  Other education groups and representative groups of political subdivisions also aligned themselves against 411 and 412, although these groups did not expend anywhere near the amounts as the business community.  Even the State Board of Education stood in opposition to the amendments and officially announced its stance on October 11, 1996.

The division among educators and education groups was plainly evident to any casual observer.  If the education community were to be considered a family, then this particular period of time was not one of the finer moments in familial history.  The NSEA had reason to feel betrayed by fellow education entities, but for many it was not a failure to recognize the good intentions of the teachers' association so much as concern about the many variables and questions left to the imagination.  The dysfunctional relationship among education groups was readily broadcast and printed in the media as proof that even educators could not agree on the merits of the two amendments.

In addition to what it labeled as misleading information about its petition drive and the resulting two amendments, the NSEA was not very pleased with state leaders, both appointed and elected.  In the May 1996 edition of the NSEA Voice, Executive Director Jim Griess reacted to the decision of the State Board of Education to enlist its assistance in developing the levy limitations contained under LB 1114 (1996).  The State Board believed it would be in the best interests of education to see levy limits appear in statute rather than in the Constitution.  "Is Rome burning?" Griess asked rhetorically:

In mid-March, the State Board of Education did a curious thing.  The board sent a letter to Sen. Jerome Warner, chairman of the Legislature's Revenue Committee, "applauding" the Legislature's proposed legislative remedy to the state's property tax problem.  The letter was curious because the board is the state's steward of public education.  And if Nebraska's schools were all nestled among the seven hills of Rome, the Legislature's plan might as well be the flames ignited by Nero.²⁰

Griess believed the levy lids under LB 1114 (1996) coupled with the spending lids under LB 299 (1996) would be devastating to education and to children.

After months of hard fought campaigning, the final word from the voters was fairly distinct.  No.  Both Initiative 411 (education provisions) and Initiative 412 (revenue provisions) were defeated at the November 5, 1996 General Election by 3-1 margins.  Owing perhaps to the highly advertised campaign, more voters participating in the election cast an opinion on 411 and 412 than the other pending amendments, including Initiative 409 (term limits).  Initiative 409 required Nebraska's members of Congress and state legislators to support a U.S. constitutional amendment limiting terms of members of Congress.  Initiative 409 had the distinction of being the only proposed constitutional amendment to be approved by the voters at the 1996 General Election.