1998 General Election: Initiative 413

Eight separate constitutional amendments appeared on the November 3, 1998 Nebraska General Election ballot.  Seven of the amendments sprang from legislative resolutions passed and forwarded by the Legislature, while one amendment derived from a citizen-based initiative petition.  The latter measure, Initiative 413, will undoubtedly be remembered as one of the most hard-fought, expensive, and bitterly contented issues in the history of Nebraska.

The sheer number of voters participating in the vote on Initiative 413 in comparison to the other ballot issues is testament to the strong feelings on the issue.  It may also be testament to the power of big budget television campaigns, both for and against a given issue.  Voters were inundated with advertisements from both sides, and both sides accused the other of false statements, distortions, and misleading information.

The initiative petition drive was launched by a group calling itself the "Citizens for Nebraska's Future," and included the involvement of tax activist Ed Jaksha of Omaha.  In fact, the movement was ostensibly funded and directed by the Omaha-area business community, particularly by a group calling itself the "Business Leaders Summit."  The opposition to the movement initially derived from a group calling itself the "Nebraskans for the Good Life," which included professional associations representing political subdivisions.  Groups representing school boards, school employees, county officials, municipal officials, and postsecondary institutions were among the members of the opposition group.

Many state legislators were also aligned against the initiative effort since the proposed constitutional amendment would similarly affect state government.  Eventually, an opposition coalition would be formed in the name of "Agriculture, Mainstreet and Education Against Measure 413."  The group was comprised of the same local government groups but also included various business interests, including agricultural and banking associations.  So what did the initiative measure propose to do, and why would government interests be so concerned about it?

Initiative 413 was unquestionably one of the largest amendments ever proposed to the Nebraska Constitution.  The language of the amendment consisted of 3,525 words and, if adopted, would constitute 11% of the entire Constitution.¹  The measure proposed to stem government spending by limiting the amount of tax revenues available for the state and local governments to expend.  The "tax lid" was affixed to the prior year's tax revenue multiplied by the Consumer Price Index (CPI) plus (i) population (or student) growth, (ii) temporary emergencies (if applicable) and (iii) unfunded federal mandates (if applicable).  Voters would also be allowed to exceed the applicable lids.²

The proposal gave any taxpayer and also the State Auditor standing in court to sue the state or any local government for enforcement of the provisions.  The measure prohibited any court from issuing temporary or permanent injunctions while cases were pending.  And a plaintiff who was successful must be reimbursed reasonable attorney fees and expenses, payable by the state or applicable local government.³

The measure permitted the Legislature to change the methods or allocations of tax revenues on state aid to local governments.  However, the measure prohibited the Legislature from disproportionately reducing state aid while not proportionately reducing spending of tax revenues on other matters.⁴ This seemed to be an attempt to require the Legislature to reduce its overall spending rather than just reducing state aid, which is only one segment of the state's budget.

The measure contained an effective date of July 1, 1999, and also a conditional sunset date.  The measure provided that at any time after January 1, 2004, the Legislature may enact legislation to "indefinitely suspend" the operation of the measure if the legislation enacts the same limitations set forth in the measure.⁵  A three-fourths vote of the Legislature was required for such legislation, which also must be signed by the Governor.⁶

On August 27, 1998, Secretary of State Scott Moore officially certified that the petition campaign had gathered sufficient signatures to place the issue on the November 1998 ballot.  The petition organizers had gathered 125,310 valid signatures and had met all other statutory stipulations.⁷ Secretary of State Moore also officially assigned the measure as "Initiative 413," a number in sequence with past initiative and referendum ballot issues.

The backers of the petition had certainly put together a well-organized effort to collect the necessary signatures.  "Quite frankly, Citizens for Nebraska's Future is the broadest coalition ever put together in Nebraska, because it represents 184,000 taxpayers from every county in the state," said Steve Wolf, executive director for the petition movement.⁸  Wolf was referring to the number of unverified signatures gathered by petition circulators.  The organization was also well funded.  In October 1998, reports indicated that the mostly Omaha-area group had raise about $2.7 million and expended $2.6 million at that point in time.  This was far and away more money than had ever been raised and spent on any previous ballot issue in Nebraska.  Most of the funding came from major Nebraska corporations and individual corporate executives.⁹

The deep pocket for the opposition was primarily the Nebraska State Education Association (NSEA) and local education associations, including the Omaha Education Association (OEA).  But the amount of total funds available to the opposition was substantially less than the pro-413 effort.  The anti-413 group chose to expend some of its resources for television advertisements in carefully chosen timeframes prior to the election.  They painted Initiative 413 as "poison" for Nebraska and the necessary services provided by state and local governments.¹⁰  As the election grew nearer, the opposition distributed lawn signs containing the "poison" message accompanied by the well recognized skull and cross bones image.  They also recruited such notable political leaders as U.S. Senator Bob Kerrey and Congressman Bill Barrett to serve as co-chairpersons of the campaign.  "This is the wrong solution to the right problem," Kerrey said at a campaign rally in Omaha, "It might lead to tax savings for some, but it will lead to higher user fees, college tuition and property taxes for all."¹¹

Aside the obvious constraints of a constitutional revenue/spending lid, public school interests were particularly worried about the effect such a measure would have on recent strides made in capturing new appropriations for state aid.  In 1997 the Legislature passed LB 806, which provided sweeping changes to the distribution formula and also appropriated $110 million in additional state aid to schools.  LB 806A appropriated $110 million for 1998-99 in addition to the amount otherwise appropriated.¹² The idea was to help schools compensate for the lost local revenue under the levy limitations set to be implemented in 1998.  The opposition wondered how the 413 lids would treat this and other attempts by the Legislature to increase state aid to education.  During the 1998 campaign, there was only conjecture about this and other questions, but no solid answers.

As occurred in previous gubernatorial election years, Initiative 413 would play a role, but not perhaps a deciding factor in the outcome of the Governor's race.  Democrat Bill Hoppner was a vocal critic of the constitutional amendment and attempted to use the issue to paint Republican Mike Johanns as being too supportive of corporate Nebraska.  Johanns' official position was somewhat unclear at times, but he seemed to believe that the lid proposal would inhibit the function of state government to react as necessary.

The major stir in terms of personalities in politics related to the position and actions taken by Kathleen McCallister, who served as President of the State Board of Education at the time.  On October 1, 1998, the State Board of Education officially voted 5-3 to oppose Initiative 413.¹³ Nevertheless, McCallister appeared in television commercials under her official title in support of the constitutional amendment.  There were calls for her resignation or at least an apology for providing what some thought was a misleading message about the board's official position.

McCallister fired back with charges that school employees had misused computer privileges by sending her email messages with complaints about her actions.  The email issue gave the pro-413 camp new ammunition and cause to file complaints with the Political Accountability and Disclosure Commission.  "The equipment in the school was put there for educational purposes," said J.L. Spray, legal counsel for the Citizens for Nebraska's Future, and a former employee of the Commission.¹⁴

Of course, spending, or more accurately over spending, was the main thrust of the pro-413 movement.  And proponents of the amendment had some fairly powerful allies, including the Omaha World-Herald.  Just a few days prior to the election, the newspaper released its official endorsement of Initiative 413.  "Nebraskans cannot afford another 10 years of government growth," the editorial stated.¹⁵  The editorial did little to sway opinion.  Voters overwhelmingly opposed the resource/spending lid at the November 3, 1998 General Election.

There may have been several explanations for the 64% to 36% margin of defeat of Initiative 413.  Some credited the grassroots effort of the coalition organized to oppose the amendment.  "In their cafes, across the backyard fence, in their service clubs, the people of Nebraska were talking about this issue," said Craig Christiansen, a principal leader within the opposition camp.¹⁶  "Even though we had high-powered East Coast ads (promoting Initiative 413), our campaign was truly a grassroots campaign," Christiansen said.¹⁷  Some believe the almost exclusively Omaha-based petition movement hurt itself by not having a more broad geographic foundation of support.  Some opponents of the measure were comfortable with the notion that voters valued the government services that would otherwise be harmed by passage of the constitutional amendment.  The most obvious conclusion from the election results was that one side outspending the other does not necessarily translate to victory.¹⁸

Some of the petition organizers and supporters dissected the election results somewhat differently than the victorious opposition.  They believed, in retrospect, that Initiative 413 represented the wrong solution to the correct problem, very much like Senator Kerrey said at the campaign rally in Omaha.  Retired publisher Harold W. Andersen perhaps best captured the essence of this thought when he wrote:

I hope that in celebrating their victory, leaders of the opposition to Initiative 413 - the tax-limiting proposal rejected by Nebraska voters two days ago - will take time to reflect on a reality that, I believe, still confronts them and other Nebraskans.

The reality is the fact that some Nebraskans - a good many, in my opinion - voted against Initiative 413 because they thought it was the wrong way to address the problem of tax and spending increases, which in 20 years have seen state and local taxes paid by Nebraskans increased by 368 percent. These voters want something done about this tax and spending explosion, but they felt that writing 3,500 words of detailed restrictions into the state constitution is the wrong way to go about it.¹⁹

Andersen believed a ballot question merely asking voters whether they believed government spends too much would have been answered in the affirmative.

¹ "Ballot Issues," Omaha World-Herald, 25 October 1998, 1k.
² The initiative petition was called the "Taxpayers Relief Amendment" and proposed to create a new Article XIX with the title, "Government Spending Limit by Limiting Taxation and Revenue," which consisted of four separate sections.
³ Id.
⁴ Id.
⁵ Id.
⁶ Id.
⁷ Leslie Reed, "Phone, Tax Initiatives Set for Ballot The secretary of state certifies proposals on access charges and state and local revenues," Omaha World-Herald, 28 August 1998, 17.
⁸ Leslie Reed, "Kerrey To Fight Tax Limits The senator is co-chairman of a new group seeking to block the ballot initiative," Omaha World-Herald, 18 September 1998, 15.
⁹ Henry J. Cordes, "2 Initiative Campaigns Set Spending Records Both Sides on Initiatives Dig Deep Into Pockets," Omaha World-Herald, 6 October 1998, 1.
¹⁰ The opposition to Initiative 413 used the word "poison" in television advertisements, yard signs, and other materials distributed by the coalition.
¹¹ Reed, "Kerrey To Fight Tax Limits," 15.
¹² Legislative Bill 806A, Slip Law, Nebraska Legislature, 95th Leg., 1st Sess., 1997, § 2, p. 1.
¹³ Nebraska State Board of Education, Minutes of Board Meeting (Lincoln, Neb.) 1 October 1998.  Voting Yes - Endacott, Loschen, Mactier, K. Peterson, B. Peterson; voting No - _Savage, Wilmot, McCallister.
¹⁴ Patrick Strawbridge, "E-Mails Critical Of Tax Lid Ad Spur Complaint," Omaha World-Herald, 23 October 1998, 13.
¹⁵ Editorial, "Our Recommendation; 20 Years of Government Income, Outgo," Omaha World-Herald, 30 October 1998, 24.
¹⁶ Henry J. Cordes and Leslie Reed, "Grass-Roots Push Foils Initiative 413," Omaha World-Herald, 4 November 1998, 1.
¹⁷ Id.
¹⁸ Id.
¹⁹ Harold W. Andersen, "Tax, Spending Curbs Still Needed in State," Omaha World-Herald, 5 November 1998, 27.