Debate Transcripts

LB 839 (1993)

Final Reading

June 2, 1993

PRESIDENT MOUL: You've heard the motion to advance. All those in favor please say aye. Opposed nay. LB 838 is advanced. That's all we have on this bill. The next bill is LB 839.

CLERK: Madam President, I have a motion to return. Senator Withem would move to return LB 839 to Select File for specific amendment. You'll find the amendment in your bill books, AM2496.

PRESIDENT MOUL: Senator Withem.

SENATOR WITHEM: Yes, Madam Chair, members of the body. First let me apologize for I was probably slightly intemperate at least in the tone of my voice when I responded to Senator Moore's assertions on LB 838. And it's a long-standing concern that I have and that is at this end of the session how do we manage ... manage our time and what bills come forward, what bills don't, and would point out that there are a number of bills on Final Reading today that were considered in the appropriations package which are not part of the responsibility of funding state government on an ongoing basis but they're policy issues. The one we're dealing with right now, for instance, I think has a grand total in its pristine form of about a $34,000 a year impact on state government. And the process by which we elevate some bills and, therefore, leave other bills at the starting gate is always a frustration, and I've never quite understood how bills get into the Appropriations Committee package and probably I ought to say on the Revenue Committee package, I'm now on the Revenue Committee, become considered ahead of individual senator priority bills when those bills do not have priority status. That was kind of a frustration I was mentioning before about the ability of some of our committees to put bills before the Legislature. And then I think if the bill is before the Legislature, properly before the Legislature, amendments ought to be considered. What I'm trying to do with this amendment in effect is take ornaments off the Christmas tree. Normally this time of year we are loading up bills with Christmas tree ornaments. LB 348 is one of those. LB 348 has a multitude of amendments to it. I have a real fear that even if we get to it may get bogged down on consideration of those amendments. There are things in LB 348 that need to pass. I would like to consider two issues that I think the Legislature needs to give an answer to this session. And I'm using LB 839 as the instrument to do that; and if we get these considered at

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this particular level, a fair consideration for these two issues together, then we might be able to let LB 348 go in its pristine form and less cumbered form than it is now. Two issues that I think we need to deal with we've already discussed briefly the in lieu of taxation issue. Let me give you a little background on that. Number one, most of you know when Nebraska entered the nation there were certain lands given to the state for the purpose of support of education. These lands are rented out. The rent that comes from them goes out to support the common schools. Part of the lands were sold and the proceeds of those lands were put into the permanent school fund. Interest on that goes out to support the common schools. Two types of distribution, there is an apportionment where every kid in the state gets sent to his or her school district a certain sum of money out of the fund and then there's an in lieu of taxation. In lieu of is a scheme, and that's the term that the Supreme Court uses for it, a scheme that was developed back in the turn of the century to compensate school districts that have school lands in them for the fact that they no longer... that they are not on the tax-rolls. The purpose of it is to defray a lost tax. The formula that was used prior to a Supreme Court decision was school districts got 143 percent of the value of those lands counted in terms of determining what they lost in tax revenue. The 43 percent was used to compensate them for money that they would have received if the land had been... that other subdivisions of government would have received had those lands been on the tax rolls. The Bartels decision, the Millard school district, a gentleman by the name of Mr. Bartels, sued Commissioner Lutjeharms over the in lieu of tax issue. The Supreme Court indicated that in lieu of taxation was in fact a proper form of distribution but that it is a violation if the... I wish I could find the exact language here, you cannot give them more, school districts more than they would have got had the land been taxed I think is the layperson's explanation. School district would not have received 143 percent of the valuation so, therefore, they couldn't get 143 percent. State Board of Education then took that decision and began distributing on a 100 percent basis. This year because ag land and all of the farm, all of the rental property, school lands are in fact ag land, had they been taxed they would not have been brought in money at 100 percent of their value, they would have brought money in at 80 percent of their valuation. They asked... the Department of Ed said we don't think we can distribute at 100 percent, they asked for an AG's opinion, they have not distributed over $20 million in lieu of and

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apportionment money. The Attorney General recently came down with an opinion that I believe is in our Journal that says simply can the Commissioner of Education apportion the school funds pursuant to current Nebraska statutes, we think not. We simply cannot and will not knowingly advise you or any other officer of the State of Nebraska to violate the Constitution of our state. We, therefore, suggest that you seek a proper amendment to LB... to Nebraska Revised Statutes. This is the proper amendment. It will mean that the money will be distributed on the basis of its taxation value and not on 100 percent. I know there are people who would like to do other things with school lands. Some would like to sell them, some would like to find another scheme by which you could give more money to school districts that have school lands in them. I don't think you can do the latter, you might be able to do the former; but that is a much bigger issue than before us today. The second issue is one that both the Education Committee and the Revenue Committee have dealt with. I think it's time the full Legislature took a stand on this issue. What you have before you is the second part of the amendment to LB 839 is what is simply called the common levy for Class VIs. Class VI school districts are in effect an amalgamation of Class I school districts that don't operate a high school, that have banded together to form an umbrella district that creates a high school district. People that live in those pay two different levies. They pay a levy to support the high school, a levy to support the elementary school. A few years ago we passed a bill on affiliation that dealt with all free-standing Class I school districts. All free-standing Class-I school districts by June 1 of 1993 have to have completed an affiliation process. Taxpayers in those districts will pay a common levy, the same tax rate on their property as everyone else using the high school. Now there are only a few, I think there are 24 Class VI school districts in the state where people will pay different levies to support the K-12 system, the pay levy is different than people living in other Class Is. We passed out some information. This was a bill that actually Senator Baack brought forward. There were a couple of bills dealing with Class VIs in the Education Committee. There were not... that were more draconian than this particular proposal. Senator Baack had prepared, when he had introduced the bill previously, some documentation showing the difference in levies paid by some taxpayers within the same K-12 system. In Schuyler, for instance, some people paid 41 cents per $100 and others paid $1.01. There are three examples here at the end that show other

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school districts, a little more current information. We have for instance in the Cherry County school district, folks that live in Valentine pay a General Fund levy of $1.03; folks in Crookston Public Schools pay 39 cents, 40 cents per $100 of assessed valuation. The reason I think it's important to do that this session is by June 1 of this ... well, yesterday of this year, yesterday of this year the common... the affiliation process was to be completed. People are going to begin paying the common levy. People in Class VIs will not be if we don't change the statute...

PRESIDENT MOUL: One minute.

SENATOR WITHEM: Pardon me?

PRESIDENT MOUL: One minute.

SENATOR WITHEM: One minute. I have not heard anyone give a defense of the wide variance in levies that makes sense within a Class VI school district. These are two things that I think need to be done, I'm bringing to you so we can get them done on this bill so that we can hopefully strip LB 348 of any additional amendments and make sure that it gets passed because there are some needed changes that need to take place in LB 348. If we leave all the other amendments pending, I'm fearful that we won't get through that bill this session.

PRESIDENT MOUL: Thank you, Senator Withem. Senator Abboud.

SENATOR ABBOUD: Madam President, colleagues, would Senator Withem yield to a question?

PRESIDENT MOUL: Senator Withem.

SENATOR WITHEM: Yes, I'd be happy to.

SENATOR ABBOUD: Senator Withem, I'm talking about the... I want to ask you a question about that second part. Now would this provide that all, maybe I'm missing the point here, but would all Class VIs have the same exact levy?

SENATOR WITHEM: No. Everybody that had property within a single Class V1 school district would have the same levy as everyone else living within that Class VI school district.

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SENATOR ABBOUD: Okay. So you have a Class VI is a combination of Class Is and...

SENATOR WITHEM: And a high school district.

SENATOR ABBOUD: Right. And all of the Class Is within the particular Class VI would hive the same levy.

SENATOR WITHEM: That's correct.

SENATOR ABBOUD: And that's what your bill does.

SENATOR WITHEM: That's what the amendment would do.

SENATOR ABBOUD: Okay, thank you.

PRESIDENT MOUL: Thank you, Senator Abboud. Senator Wickersham followed by Senators Moore, Withem, Jones, Baack and Robinson.

SENATOR WICKERSHAM: Thank you, Madam President. And I think you had a little notion before we got to this point that I was not going to agree that everything in this proposed amendment should be done. And specifically, of course, I'm concerned about what Senator Withem described as part two. I agree with what he had to say about part one. I do think that perhaps we can find some other mechanism, I hesitate to use the word scheme, for dealing with the in lieu of tax question; but I do not think it can be done this session. I do think that that is an essential part of what was in LB 348. I share some of his concerns that we might not get to LB 348 and be able to address it properly and pass it so that we can deal with the in lieu of tax question. And in fact, as I noted earlier, I have an amendment behind Senator Withem's amendment which would deal solely with the in lieu question, would leave out entirely the more controversial issue of what is generally referred to as the common levy. So at this point I guess what I would really ask you do is reject Senator Withem's motion to return and then later vote for a subsequent motion that I have pending to return to deal exclusively with the in lieu issue and that would be dealt with in the manner proposed by Senator Withem. But a few words about the common levy, and specifically maybe a technical comment about Senator Withem's amendment before we do any further because it relates to the in lieu of tax. If you took at the amendment, it would be on page 8 of the amendment line 16, you will see language which is struck, the language

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"which value shall be." The language on page 8, line 16, "which value shall be." Now it's rather technical, but I do not believe that that portion of the amendment makes any sense with that language struck because it leaves out the connecting language between the appraised value of the school land and the later language that sets the percentage, whether it's 80 or 100 percent. I do not believe that that portion of the amendment is in proper form. So even if we attempt to utilize the Withem amendment to deal with the in lieu of question, I do not believe that technically his amendment is correct. The in lieu of or, I'm sorry, the common levy question I think Senator Withem indicated that the question had been dealt with by both the Revenue Committee and the Education Committee. And that is certainly true. It was killed in both those committees, and it was defeated by substantial margins. It wasn't just dealt with, it was killed. And I think it's always... and it's been killed every time it came up except in the context of affiliation. And I don't think it was a good idea with affiliation either but I wasn't here for that and I'm not going to have any responsibility for that decision and I'm not going to try to guess how people voted or why they voted to have a common levy for affiliated schools. I think one of the things driving considerations at that time was that those free-standing Class Is were deemed to be some sort of tax havens so when they were brought into the Class VIs through the affiliation process...

PRESIDENT MOUL: One minute.

SENATOR WICKERSHAM: ... the common levy was added to that package. I don't think the same package is now appropriate for the remaining Class Is that are in Class VIs. And I think Senator Witham mentioned that there are only 24 Class VIs left. One of the things I find a little bit ironic is that in the affiliation bill which was passed in 1990 there is a provision, you'll find it in the bill books at 79-426.28(2). It simply says effective July 1, 1993, with the full implementation of Section 79-438.12 the Legislature will have attained its school reorganization goals for Class I districts as described in 79-426.27; 79-438.12 is affiliation. Affiliation is done.

PRESIDENT MOUL: Time. Thank you, Senator Wickersham. Before we proceed, I would like to call the senators' attention to the south balcony. Special guests today of Senators Will and Rasmussen are 40 fourth grade students from West Gate School in

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Omaha. They include Senator Will's nephew, Andrew Hotz, and their teachers. Would you please rise and be recognized. Welcome to the Chamber. Thank you. Senator Moore, you're next.

SENATOR MOORE: Thank you, Madam President and members. I'd like to first talk a little bit... I know Senator Withem had talked about his frustrations and he's been consistent in his concern over the years and I respect that. But the one thing people ... I would like people to understand is that LB 839 doesn't ... $17,000 a year is all it's worth and it's not going to balance the budget. but unless you pass LB 839, you can't save that $17,000. That's the problem. I mean you have the statutory prohibition. The only way you can save that $17,000 is somehow changing the statute. There's a couple of ways you can do that and one is to use the method of picking one bill in the Appropriations Committee, gutting it, putting all those changes in one bill, send them out on the floor never having a hearing or anything, that's been done in the past and that's been criticized in the past. And I understand that. My preferred method of doing it is to be more up front and open about it and saying let's introduce these bills, give them a number, give them a one-line, let people look at them, attack them, dissect them, and then make a policy decision on them. I mean and that's the preferred way of doing it; but when you do it that way, you raise concerns about (1) introducing a bill late, (2) you'd have the bait out there anyway, but you'd certainly have a higher probability of people saying, hum. 'They read the one-liner on that and they can say, well, that's an easy amendment, let's start amending it. And that was my concern all the way through as it was in LB 838. You know, the body, if you remember originally in February the Appropriations Committee had a list of 20-some odd bills that if you wanted to change the appropriation it was contingent upon some statutory change. And instead of introducing 20-some bills, we waited until the entire package was done, we introduced 8; 1 was withdrawn; 1 failed to get out of I believe the Judiciary Committee; the other 6 advanced and we've discussed and I thank the body for working with that. There's not a set process on how to do that, and I would welcome a better way to do that. But the way we're doing it now I think is given the ... 1 think is the cleanest way of doing it and gives people the most up front and out in the open way of doing it. But I mean there's concerns there, too, and I'm willing to explore another way of doing it. But given the way we are doing it, as I said in LB 838, my concern is that when you start opening up...I mean

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granted the in lieu of tax provision seems to be somewhat unanimous we have to deal with. I have no problem with that, but, you know, I know foolish consistency is the hobgoblin of small minds, but the problem is when you start amending LB 838 and changing it I don't know how you send out anything and the whole thing is opened up. And Senator Withem is right, obviously it is germane, it's possible you ought to do it. You know, I've always taken a stand you ought to try not to do it on these bills because it's going to make it even harder for these bills to advance in the future. But having said all that, I mean the in lieu of tax is one thing, common levy is another. It is certainly something that's been killed in two committees this year. I mean it's like Senator Withem wanted to lighten up LB 248 and weight down LB 839 with it. Now if LB 839 doesn't pass, it's not the end of the world. It's only worth $34,000. But I think if the in lieu of tax thing is something that absolutely has to be done and there's unanimous agreement in the body, if LB 839 is the only vehicle to do it, I'm not going to stand in the way. But from a pure standpoint, I don't know where you draw the line arbitrarily and for that reason I've drawn it very close to the goal line saying you shouldn't amend these bills. And that's consistent approach I've took and I'll stand by, but certainly when you get into the common levy portion with the amendment, you're dealing with something that is far from unanimous within the body. I guess as far as having to be done this year I think when two different committees...

PRESIDENT MOUL: One minute.

SENATOR MOORE: ... kill an issue that's...and I'm not on either of those committees, I don't understand that, I would think the Legislature to some degree has spoken and obviously a full vote would... may change that. But I think LB 348 is a better vehicle for that. And so with that, I'd rise to oppose the amendment.

PRESIDENT MOUL: Thank you, Senator Moore. Senator Withem.

SENATOR WITHEM: Yes. I'd just like to make a few remarks if I could, please. Number one, Senator Wickersham pointed out drafting problems with the amendment. I've consulted committee counsel on that particular question. She indicates to me the correct language was in fact taken to bill drafters office, that this is a typo and as a typo with that documentation there should be no problem handling that through an E & R amendment. So I would like to... at least that is the intention of the

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introducer of the amendment, both by the original documentation of what was suggested and by my statements now. I would like to get into the Class VI issue in general. Senator Wickersham, you know, read the remarks about that was in one of the bills that passed regarding affiliation which we indicated our goals in terms of reorganization are completed with affiliation. And I think that's true. I don't., for one, want to do any merger forced consolidation of Class I school districts. That was the whole purpose of affiliation was to accommodate a continued existence of a type of education that is traditionally supported in Nebraska and a large segment, not a majority, but a significant 'minority of our population wants to continue for education purposes. Senator Lamb almost fell out of his chair one day in Education Committee where I likened some of the things that they're doing in the most progressive, restructured, nongraded classrooms in intercities, in large cities to what we've always done in Class I school districts. The model of education in the Class I school district, when performed properly, is a fine model. The taxation that supports traditional Class I schools is not. And the reason the Class Is were constantly under attack in this Legislature was because there was a dual purpose for continuing them. There were some very sincere individuals wanted to keep a Class I school open for education purposes and there were at least as many people on the other side of the fence that solely wanted to keep their Class I schools opened because they were a tax haven. They created very, very low tax levies. We came up with the affiliation scheme, I'll use the word scheme for that also, as a means for solving that issue to allow the continued existence of Class I school districts for education purposes, but to abolish the tax advantage that they have. We did that for all Class I schools in the state except for those that were in Class VIs. We're looking at the data of the Class VIs and I don't know how in the world...Senator Wickersham, I'd love to have you stand up and explain why it is okay for Holt County District 205 taxpayers to pay zero, zero dollars to support kindergarten through sixth grade where you have people in Holt District 7*7 that are paying 67 cents for $100 of assessed valuation--zero versus 67 cents. This amendment does not force them to reorganize, doesn't force them to run their schools differently. It just says anybody in west Holt that's supporting that high school is going to pay a levy. Everybody is going to pay 83 cents in that particular school district to support education., K-12 education. It was the compromise the Legislature came up with to end the rancor over forced

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consolidation that split the state part year after year after year. All this amendment does is seek to add that compromise on over to the Class VIs.

PRESIDENT MOUL: One minute.

SENATOR WITHEM: Class VIs continue to exist. I heard the other day when we were talking about school reform, I heard from somebody in the Department of Education glowing recommendations for what's being done in Grand Island Northwest, superb school; and nothing that's being done here is going to change one iota the education that takes place in Grand Island Northwest High School. It will just change for a fairer method how taxes are paid, how they're assessed and collected against people that use that high school. To argue that this is a good system would say that those people that live in Omaha that are in Senator Will's district ought to have a different levy supporting their elementary school than those that happen to have the Westroads in their district. It's a unified school system. A Class VI is a unified school system. We are not changing that. We're not changing how they operate structurally. We're just saying they ought to have a fairer method...

PRESIDENT MOUL: Time.

SENATOR WITHEM: ... of assessing taxes. I think it's a good proposal and I'd urge you to support it.

PRESIDENT MOUL: Thank you, Senator Withem. Senator Jones.

SENATOR JONES: Madam President, members of this body, I just want to stand in opposition of this amendment being brought back because it'd affect my area really big. And to give you a little example, I've got 77 Class I schools and I got 7 Class VIs in my district alone. And, Senator Withem, would you yield to a question, please?

SENATOR WITHEM: Yes.

SENATOR JONES: How does this affect state aid out in my district? How many dollars and cents would be going out of my district with this?

SENATOR WITHEM: I do not know how many dollars and cents would be out of your district. I can give you a general answer. it

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does affect state aid because when we passed LB 1059 we send money to school districts based on their valuation. The common levy would merge the entire valuation of a Class VI school district. The Class VI school district in total will receive less state aid. That will be more money that's distributed to school districts that have a greater need, and I think that's a positive impact of the bill. I don't know how many specific dollars and cents would be impacted in your district, however.

SENATOR JONES: Thank you. I seen some figures and I think the grade school in Valentine will lose about over $200,000, and that's too much of a loss in my district so I'd have to stand in opposition of this here common levy. The in lieu of tax I would support, but we just have to vote down this whole amendment that's bringing it out right now. Thank you. And I'd like to yield the rest of my time to Wickersham if he wants it.

PRESIDENT MOUL: Senator Wickersham.

SENATOR WICKERSHAM: Thank you. A couple of things that keep coming up and I don't know whether to try to deal with them piecemeal or not. But since the last point had come up as to what effect this might have on state aid, I think a number of people have seen numbers that may or may not have been projections of what the effect of the common levy would have. I was gratified to hear Senator Withem say that he doesn't know what effect the common levy would have on state aid. I think that's absolutely the correct answer. I don't think anybody knows what effect it would have on state aid; and in particular, I don't think we can know that because of the changes in the valuation of agricultural lands if for no other reason. So if you've seen numbers, I don't see any way that you can rely on any numbers that you may have seen in this area. I just don't think there are any numbers that are reliable. Senator Withem asked me if I could try to explain why someone in Holt County has a zero levy. Well, I guess I can't respond in the kind of detail that I would normally want to respond to that kind of a question with. But in general, a school that has a zero levy I'm assuming has zero spending. And if I recall- correctly and I'm really not an authority in this area so maybe Senator Withem will have to correct any mistakes that I make, but it seems to me if you have a school that has zero spending you have zero students. And if you have zero students, that school is probably on its way out. And in fact, that's the situation with a number of Class Is in the state at the present time. In fact,

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21 of them had no students at the fall enrollment in September of 1992. Out of 433 in the State of Nebraska, 21 of them have zero students. Holt may be one of those. I'm assuming it's one of them, and I'm assuming also if that status continues for very long that that district will by law be merged into some other district. I think that's what has to happen.

PRESIDENT MOUL: One minute.

SENATOR WICKERSHAM: The common levy was described as Senator Withem as simply a means to equalize out the tax burden. And it would certainly do that, it would certainly do that. But the Class I Class VI system is distinctly different than the Class III, II, IV, or V systems in that it has multiple school districts, multiple school boards, multiple decisions about spending needs and how they affect the education of students in those schools. I don't think that we need to have the common levy because it will in part defeat what I think is a very good system where people make their own spending decisions for their own school and pay for them. The common levy in effect causes other people to pay for spending decisions that are made in a Class I.

PRESIDENT MOUL: Time. Thank you, Senator Wickersham. Senator Baack, followed by Senators Robinson, Bromm, Dierks, Wickersham, Will, Janssen, Jones and Abboud.

SENATOR BAACK: Yes, Madam President and colleagues, I rise in support of the amendment. I'm the person that keeps bringing the bills here that keep getting killed in committee. This is an issue that it seems to me that the whole Legislature needs to finally address rather than just having committees address this issue. I know it's been killed by two committees this year. It's been killed in other committees in this Legislature. This isn't the first year I've had this bill killed. Ind even if we don't do it this year, it will be back next year because it is an inequity that we have simply got to address at some point in time. There is no justification for having this unique system out there that provides for tax havens. There is no justification for doing that. We have in the affiliation process we went through that as we did affiliation in here we talked about whether or not we needed a common levy. And we came to the conclusion, yes, we did. We had to provide for a common levy with the affiliated districts to make sure that we spread out that tax burden within that district. The Class VIs

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and their association with the Class Is should be no different. Senator Wickersham states that they are unique because they're distinctly different. Yes, they are distinctly different than anything else we have in the state. And the distinction is they allow for tax havens. That's the main distinction that they have is that they do allow for those tax havens to exist. I'm ... my district, I have a school district that loses dollars under this. The idea was brought to me by the board president from that school district because they could see the unfairness of the way this whole system works. One of the issues that people have made this out to be a rural-urban issue. It is not that at all. The people-that are getting hurt the worst are the people that live inside of the larger towns within these Class VI districts. They end up paying very high elementary levies compared to the rural areas who pay very low elementary levies. And they end up, because their valuation is not spread out, they're locked in by the Class Is, they cannot expand their district. They are surrounded by Class Is. This is the problem that you have. I think this is something that we should have addressed when we did affiliation. We should have used this as part of it and we should have provided for common levies across the board when we did affiliation and not allow this one unique system to exist out there with the ability to have tax havens. I think that we don't know exactly what this will do to state aid as Senator Wickersham has said, but it will certainly provide for a redistribution of that state aid. We have been pouring state aid into a lot of districts that probably don't deserve to have that state aid. And I think that we're going to see that shifted to the areas where the pupils are. Most of these districts that have the tax havens have very, very few pupils. And I think that if we pour money into those districts we should be putting the money where the students are, and we should not be putting it into districts that have very, very few students. The idea of the in lieu of taxes is something that Senator Withem and I have talked about some. I am willing to support that part of this amendment at this point in time, but I think in another year we're going to be coming back and having to address that issue again. Because if we're going to only go to 80 percent of value and we're going to not provide for some other kind of remunerations for those districts that have school land in them where the counties and those people get no benefit from those because they are not on the tax rolls, the only entity that gets money from those are the school districts. And Senator Withem stated that's why it was set at 143 percent of value originally was to make up for that difference. If we're

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going to go down to 80 percent of value, which I think needs to be done now because we can't address the broader issue of whether we're going to sell those lands or whether we're going to come up with a different way of redistributing those dollars, we can't do that this late in the session. But I think we will be back doing that next year...

PRESIDENT MOUL: One minute.

SENATOR BAACK: ... and we will be talking about whether or not we're going to sell those school lands. So I can support that part of the amendment, but I think the policy choice that we're making here is even stronger on the common levy. I think we need to say, look, we're going to make all districts operate all kinds of school systems in this state, operate under the same rules. Right now we've got one system, the Class VI system that operates under a whole different set of rules that allows them to have some tax havens and I don't think that we should do that. I think we should provide that the common levy be throughout the systems and all systems operate under the same rules. With that I would urge you to return the bill to Select File and adopt the amendment. Thank you.

PRESIDENT MOUL: Thank you, Speaker Baack. Senator Robinson.

SENATOR ROBINSON: Madam President, members of the body, Senator Withem, I've got some questions. You, on the sheet that you handed out is the... are you saying the common levy would be 80 cents? Am I correct on it? Am I reading the right thing? Or do you have on your...

SENATOR WITHEM: The common levy would be common only to a given Class VI district. It would be different from one Class VI district to a different Class VI district.

SENATOR ROBINSON: If your amendment passed.

SENATOR WITHEM: Yeah.

SE14ATOR ROBINSON: I thought you said there would be... I thought there would be a common levy.

SENATOR WITHEM: Common levy within a Class VI district. Common levy, right now we have in law starting next year everybody that uses a high school whether they are residents of that or

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affiliated Class I's, everybody that uses that same high school will pay the same levy to support K-12 education. Everybody... if this passes, everybody that is within West Holt will have the same levy. It may or may not be the same, it probably won't be the same as everybody that is in Cherry County, but everybody that's in Cherry County will pay the same levy to support K-12 education. Everybody that's in Holt County will pay the same levy to support K-12 education. They probably won't be the same across counties. Just like people at Blair...

SENATOR ROBINSON: No, no, I'm talking about people within counties. No, I'm talking about within...

SENATOR WITHEM: Within they will pay a common levy, yeah.

SENATOR ROBINSON: Okay, I'm looking at the data from Cherry County. So each elementary school will pay the same levy in Cherry County that is affiliated with that Class VI, is that correct?

SENATOR WITHEM: Correct.

SENATOR ROBINSON: Is that 80 cents then, or do you have that figure?

SENATOR WITHEM: The figure I have., it looks like it's the bottom, derived total for Class VI system would be .7952, yeah, the 80 cents number.

SENATOR ROBINSON: Okay. What effect do you think that would have on the... I'm looking at some of these that really get whopped here, the high percentage ones like let's take the Valentine school district. Now they would lose 225,000. What effect do you think it would have on that school?

SENATOR WITHEM: Where ... what are we talking about now?

SENATOR ROBINSON: Well this is what I got from the state department. They go from... they lose 225,000 in aid.

SENATOR WITHEM: They'd lose that money from the state, but because all of the property in Cherry County would be supporting the system in general, they would gain support from the rest of the property in the county. That's what Senator Baack was talking about out in his county.

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SENATOR ROBINSON: Okay, okay.

SENATOR WITHEM: Lose money from the state, but if they have all of the property to support (interruption)....

SENATOR ROBINSON: Because now they are only getting it from the...

SENATOR WITHEM: City.

SENATOR ROBINSON: ... confines of the Valentine...

SENATOR WITHEM: Right.

SENATOR ROBINSON: ... elementary school.

SENATOR WITHEM: Right.

SENATOR ROBINSON: Okay. So... thank you.

SENATOR WITHEM: Thank you.

PRESIDENT MOUL: Thank you, Senator Robinson. Senator Bromm.

SENATOR BROMM: Thank you, Madam President. I have a couple of questions I think and I guess one of the concerns I have about this is the process. Now do I understand, Senator Baack, well I'll ask Senator Withem, you're by your microphone, that...

SENATOR WITHEM: That was a mistake on my part, Senator Baack has...

SENATOR BROMM: ... that this was a bill or that this was two bills that was heard by Education and another...

SENATOR WITHEM: Three different bills were introduced this year that dealt with Class VI. One would have abolished Class VI's. One would have turned the high school district into a Class III district and the rest would be affiliated districts and then what you have before us was the contents of LB 71 that was referred to the Revenue Committee.

SENATOR BROMM: And the Revenue Committee failed to advance it, is that what happened?

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SENATOR WITHEM: That is correct.

SENATOR BROMM: Okay.

SENATOR WITHEM: Advanced it in a form which Senator Baack did not appreciate with the IBP box check there.

SENATOR BROMM: Okay. Well then I do have a question for Senator Baack. I'm sorry, Senator Baack, if you wouldn't mind. We spent time trying to deal with pulling Senator Ashford's gun control bill out-- of committee. Is there some reason why we didn't approach this in the same manner? If you wanted the entire Legislature to deal with this, we're on Final Reading. This was not proposed earlier as an amendment. It was not proposed to be pulled out of committee by this body. Is there some reason why we didn't approach it in the same way we did Senator Ashford's legislation?

SENATOR BAACK: Senator Bromm, I think it's just a matter of strategy and which process you use.

SENATOR BROMM: Okay.

SENATOR BAACK: That's all ... Senator Withem does have an answer to that I think. I think if you note that this isn't my amendment. This is Senator Withem's amendment.

SENATOR BROMM: No, I ... but 71 was your bill.

SENATOR BAACK: Absolutely it was, yes.

SENATOR BROMM: Okay. Thank you, Senator Baack. I guess I have some concerns about... this is a fairly significant measure I think and I do have reservations about doing this on Final Reading as an amendment. It certainly is deserving of all the discussion that you would give a bill like this. It probably deserves to be debated three times because it does have some effects out there and I also did some checking on the VI's in my district of which I have at least three and I can't find out for sure what it's going to do to them. I have a general sense that state aid is going to flow out of our area and I don't know where it's going to flow to, but I know it's probably not going to stay in my area and I have some concerns about that. I would like to look at it a whole lot more carefully than I think I'll

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be able to in the short time we're going to have here. And I just think that from another viewpoint if you look at VI's are several districts put together and I might be in this Class I here and I might want to hire a higher paid teacher. Maybe I don't want to take a teacher right cut of college, but I want an experienced teacher and I'm going to pay a higher salary. I might want to have a computer for every child at their desk. Well if I want that, then I'm going to pay for it the way the system is now. If we do this, from what I see at least on the surface, there's going to be no incentive to try to be economical in your district. Those that are lavish in their programs or their spending are going to have the same mill levy as those who are extremely frugal and I have somewhat of a problem with that concept. I would like to say just very briefly that I will resist returning this entire amendment, or the bill for this amendment. I would support...

PRESIDENT MOUL: One minute.

SENATOR BROMM: ... returning it for Senator Wickersham's amendment. I'd like to give the rest of my time to Senator Jones.

PRESIDENT MOUL: Senator Jones.

SENATOR JONES: Thanks, Senator Bromm, and Madam President and members of the body. I'd like to bring up one more question that I don't think has been brought out here. Senator Withem, would you mind...

SENATOR WITHEM: Sure.

SENATOR JONES: Valentine would have a grade school that would be a Class I right in the town and they might be a half a dozen grade schools out in the country that are all Class I's. Is that...that's possible?

SENATOR WITHEM: It's not only possible, that's the way it is now.

SENATOR JONES: Okay, okay. What if the one in town would want to build a whole new school and everything and would that raise the mill levy for every one of them out in that...?

SENATOR WITHEM: It's my understanding and, Marsha, if you can

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Tune 2, 1993

look over here and nod yes or no, it's my understanding that this is General Fund only, that bond issues that are incurred for the benefit of only one school district, only those people pay the levy to support those.

PRESIDENT MOUL: Time.

SENATOR JONES: Thank you.

PRESIDENT MOUL: Thank you, Senators. Senator Dierks.

SENATOR DIERKS: Madam President and members of the body, I, too, stand in opposition to bringing this bill back for consideration of the amendment. Nobody has really talked yet about why there is a possibility there could be a difference in the Class I levy. Evidently the needs are different and I ... they now, with the existing statutes, contribute to the high school education. There is no problem with that. Every Class I district within a Class VI contributes to the education of the Class VI high school but their needs are different. They don't have the same needs. One district from one area in the Class VI district doesn't have the same needs. That's why there is a difference in the mill levy and the way that they can fund their education. I guess that I have problems too with the fact that we are bypassing a couple stages of debate here to bring this to Final Reading. In answer to one of the questions about Holt County having a school with no general, Class I General Fund levy, there's also no students in that school if you notice. That school will be forced to merge within a few years. There's another school there that has no fund levy. It has only two students. I suspect that that same thing will happen to them. I think there's a reason and the reason was put there in the first place for these Class VI's to exist was that these Class I's in the Class VI would have the right to establish a fund, a levy based on their needs and I think that's what we have to consider. So I hope that you will not support the motion to return and defeat that motion., I thank you.

PRESIDENT MOUL: Thank you, Senator Dierks. Senator Wickersham.

SENATOR WICKERSHAM: Thank you, Madam President. I appreciate the comments of Senator Bromm and Senator Dierks about the spending levels that might pertain in Class I's if we adopt the common levy. In fact, one of my concerns is that if we adopt the common levy, and I'm not sure how it is working out in the

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affiliated school districts. I think we still need to wait and see because that process is just now finishing, but my impression is that with the common levy a Class I school district that has lower than average spending or greater than average assets will, in fact, find out that they pay for- the education of someone else's children in grades 1-8. That in my mind removes any incentives those school board members have to control spending. Literally they are no longer responsible and their patrons are literally no longer responsible for paying the full load for the education of the children in that district. And you can make up your own mind about what effect you think that. will have on the decisions of that school board. But I think it will free them up substantially to make spending decisions. Now I know that Senator Wickersham would probably respond that's the reason we have the lid. They can't run wild because we have a lid. But you ought to examine the lid and satisfy yourself about what you think a school district in that kind of a situation might be able to do under the lid, particularly a district that in the past have been very conservative in its spending and had not used up its lid limitation. They're going to have a lot of capacity available to them and they just might make the decision that they have to keep up with the Joneses and that they have to have very low teacher-pupil ratios, that they have absolutely the best equipment, that they have to have the absolute best of everything. Maybe they need new textbooks every year and someone else will pay some part of it. I think the Class I system works remarkably well not only because it educates children in a way which I think serves them well, but also because it allows the people in those districts to control that hat education and how much they spend on it. I know that there is some Class I's in urban areas, but most of them are in rural areas and I don't raise that because I think this should be an urban-rural issue and I was glad for Senator Baack's comments in that regard'. I don't think it is that at all. But Class I's do fit well in many places in the State of Nebraska where you could not have, in my opinion, a unified administration of what would be a huge school district. For example, let's say Cherry County was all in one school district so you could have a Class II, III, IV District. I think the administration of that district would be flatly impossible or very expensive to maintain and I do not wish to see us move in that direction. The notion was advanced by Senator Baack, and I think it was in a generic sense that somehow all of these Class I's that don't suffer under a common levy are tax havens. I think that's probably an over

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generalization but maybe he'll attempt to prove that each and every one of them is a tax haven. I don't know.

PRESIDENT MOUL: One minute.

SENATOR WICKERSHAM: But I would assume that's really an over generalization. He may be able to point one or two that are tax havens but I don't think he'll be able to point to all of them. But this notion of tax havens is an interesting one because I guess if you have a lower tax levy than a neighboring school district, you're a tax haven. Well I don't think we can ever have equal tax levies across the State of Nebraska for all schools. I think that is flatly impossible. And in fact you can look around the state and you can find other examples where you might have been able to point out and say that there was a tax haven. Until this last year you might have been able to point to Westside school district in Omaha and say that it was a tax haven because it had a lower levy than the Omaha Public School System which entirely surrounds it. Was Westside a tax haven? Did anybody claim that it was a tax haven? No.

PRESIDENT MOUL: Time. Thank you, Senator Wickersham. Senator Will.

SENATOR WILL: Thank you, Madam President, members of the body, I rise in support of the Withem amendment or more properly in support of the motion to return to Select File to consider the amendment and my comments will be brief, but basically listen to how the debate has gone, ladies and gentlemen, listen to what has been discussed. The primary objections

PRESIDENT MOUL: (Gavel)

SENATOR WILL: ... that have been raised to this amendment, thank you, Madam President, are procedural, number one. You know, this is not something we should be doing, we should not be at the eleventh hour returning LB 839 for this amendment and you have to judge that for yourself. There have been technical objections to the way that the amendment has been drafted, that this is not accomplishing what it is supposed to. Those, I think, have been addressed. Beyond that, the objections have been largely parochial. We don't know. This affects my district this way and that certainly is understandable. Other objections have been we don't know what the impact of the amendment will be fully. The reason, the central issue, the

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core of the amendment, what the amendment is driving at, a greater tax equity in the way we finance education has not really been addressed full bore and the reason for that is that to not do what this amendment does is indefensible. There is no defense from a policy point of view. This is simply a ... this is good policy, this is something that is crying to be done as -far as the way we organize schools goes and has been for a number of years and frankly the larger issue here is the way that we organize government in general and this goes way beyond simply the issue of the Class VI's that we're talking about now because once this domino falls, then we have a number of others that fall as well regarding how we fund school districts, how we organize government in general, how efficient government is in the State of Nebraska because what we're talking about is-that very core issue of how we distribute the revenue that we have available to fund the way that government works. And the simple fact is that even though this bill was introduced, came to the Revenue Committee, was killed on a 6-2 vote with myself and Senator Withem voting against it, the fact is that this is a policy decision that is a no "brainer". It's something that we ought to be doing now, that we ought to have done a long time ago frankly. I would urge your support for the motion to return and I would give any time I have remaining to Senator Bernard-Stevens.

PRESIDENT MOUL: Thank you, Senator Will. Senator Janssen.

SENATOR BERNARD-STEVENS: No.

PRESIDENT MOUL: I'm sorry, Senator Bernard-Stevens.

SENATOR BERNNRD-STEVENS: How much time is left, Madam.

PRESIDENT MOUL: About two and a half ...

SENATOR BERNARD-STEVENS: Thank you, that should do it. A couple of points I'd like to bring up, I was listening to Senator Wickersham and I had to kind of smile on a couple of the arguments. They're good parochial arguments for the western part of the state which I gratefully share with other senators in representing the people out there, but to make the argument that if we advanced it, if we agree to this amendment that we're going to have people paying for other people's education, that's simply an invalid argument, period, because if I don't have any children I'm paying property taxes for other people's children

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anyway. I mean that argument is bogus, Bob, and you know it. The other argument that he out for us, gee, if we do this thing, the districts are only going to want the best, the best equipment. I don't know a school district that doesn't want the best for their children. I don't know a school district that doesn't want the best equipment for their children, but I ... all school districts I believe want the best, but they have to get the best based on what they can afford to do and we are under lids and that's what we have to live with regardless of this amendment whether it's agreed to or not. Bottom line where I'm coming from, I introduced a bill in the Education Committee that was far harsher than this bill. The bill that I introduced would have had a common levy, but it would have done away with the school boards, done away with the schools arid they would have had to merge. That was my bill. And what I expect would happen if this amendment is not agreed to, I see the Class VI's...

PRESIDENT MOUL: One minute.

SENATOR BERNARD-STEVENS: ... in the long run losing everything. This amendment Senator Withem put forward is the kindest of all the amendments. They merge to have a common levy. They have the common levy, but they keep their districts, they keep their school boards, they keep their local control. There is no better compromise out there. In fact, I would say to the Class VI's, if you oppose this one and this fails, I suspect if not next year, the year after that you will have a common levy because tax havens are not things that we agree with in this body and education, and they will be done away with but you may lose your local control totally because there is no reason for urban school districts to support tax havens and local control. If we're going to fight at all, we'll do it all. Senator Withem has said, I'll go halfway, let's do the common levy because it's the fair thing to do, but I'll let you keep your local control which is what you want, that is fair ...

PRESIDENT MOUL: Time.

SENATOR BERNARD-STEVENS: ... that is reasonable, this amendment should be agreed to.

PRESIDENT MOUL: Thank you, Senator Bernard-Stevens. Senator Janssen, you're next.

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SENATOR JANSSEN: Madam Chairman, members I come from a district that has two Class VI schools within it. They are working together without anyone pushing them, trying to establish the same type of system that we are going to mandate under this amendment to the rest of the state. And it has always been a lot easier to lead someone than it is to push them and I believe that the people within these Class VI districts when they see the need to have this type of action taken will take it upon themselves. And I can't understand when you have one... say you have two Class I districts within a Class VI, only two, one needs 50 cents and the other one needs a dollar. You have a common levy of $1.50 so each one is levied it 75 cents. I don't quite understand that, that one will be able to have a little more money and the other one not enough again, so I am, at this point, until I can get a little more clarification on this and understand this a little better, I am going to oppose this amendment as it stands right now and I'd like to give the rest of my time to Senator Wickersham.

PRESIDENT MOUL: Senator Wickersham.

SENATOR WICKERSHAM: Thank you, Madam President. I guess maybe I used the wrong word when I was talking about desires of a school district maybe to have the best for their children. Maybe I should have just used the word which was really in the back of my mind, and that was the most expensive, which of course we all know isn't necessarily the best. But I guess you should choose your words carefully and maybe I'll be more careful next time and I won't use best, I'll use the most expensive. That's what I really had in the back of my mind and I think that's what potentially can happen. I think we've had a full discussion of this issue and the discussion of the issue is simply bringing to mind something that Senator Moore raised early on and Senator Bromm raised it a little bit. Final Reading is not the place for the kind of a proposal that the common levy represents for a couple of reasons. It's chewing up all this time, we have no ability to amend the proposal that is before us and I'm not sure that we're going to have despite the amount of time that we will spend on it today, a full debate of all the issues that are involved. Quite frankly, if we hadn't been on Final Reading this issue would have been divided so we could have voted on the common levy as opposed to the in lieu of tax proposal. Maybe we would have voted up one, maybe down the other, maybe even both of them woud have gone, but on Final Reading the procedure that we're using doesn't allow us to do

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that. Maybe that's part of the reason why this is finally popping up on Final Reading in answer to Senator Bromm's question. I'm not sure, but it does put you in a bind except that there's an amendment following this one which can arguably get us out of the bind, leave the controversial provision on the desk and adopt the one that we actually need. And I would just very simply urge the body to reject Senator Withem's motion to return so we can move on to the subsequent amendment which is something that we need to do in a critical fashion...

PRESIDENT MOUL: One minute.

SENATOR WICKERSHAM: ... and that is agreed to.

PRESIDENT MOUL: Thank you, Senator Wickersham. Senator Jones. Senator Jones, you're next. Are there sufficient seconds? There are. We'll now vote on the motion to cease debate. All those in favor please vote aye, opposed nay. Please record, Mr. Clerk.

CLERK: 29 ayes, O nays to cease debate, Madam President.

PRESIDENT MOUL: We have ceased debate. I'll recognize Senator Withem for closing.

SENATOR WITHEM: Madam President, members of the body, let me make four about points in closing. It has been a good debate and a good discussion. Obviously when emotions run high, things are said that may not be meant in the context in which they are stated so I'll try not to respond with anger, but to set the record straight. Somehow I get this sense that I'm being accused of trying to slip something by people at the last minute, like I'm almost being a Senator Ashford here on this particular ... he was looking at me so I had to respond, like I'm somehow trying to slip something past them: April 30 this amendment was filed in the Journal as an amendment to LB 348. Had 348 come up in its normal order we would have dealt with it there. I know that people read the Journal. Dick Kamm, the superintendent from Lakeview has been down here practically every day since then. I don't know if school had recessed in April or not, but he's been down here practically every day. People have had full opportunities to visit with people from the Class VI's, from other groups to support this so that's no problem. These wildeyed spenders that serve on local school boards that Senator Wickersham is so concerned with that are now

7100

going to take advantage of that and spend through the ceiling, it's not going to happen, they're under lids . They are under lids like everybody else. We've had a year of some school districts affiliated,. I've asked, have you seen aberrations in spending pattern, they haven't been there. It's a total red herring. We hear about needs by students. Really that's what we heard when 1059 was brought up, that oh, yes, some school districts have higher levies because they want to spend more on kids, until we found out that the higher levied districts were the ones that were spending less and the lower levied districts were spending more. In the examples that we used here, Windy Meadows Public Schools, zero levy, two kids, spend over $10,000 on each kid. Prairie Rose School has two kids, spends over $10,000 on each kid, has a 37 cent levy where there are other school districts in that school district that have twice that. Final point I guess I'd like to make, I've... one of the things I have noticed as I walk around the Chamber, a number of you have on your desk a book called Reinventing Government. It's a good book, it's an excellent book. We need to think more of that particularly in tough budget times. It basically argues that we have to, if we're going to get government 'under control, are going to have to break down some of the pre-existing institutions. We're going to have to make some fundamental changes in the way in which we structure government in this state. Does this do that? No, it doesn't revolutionize that, but I'd argue if you can't do what Senator Will has correctly indicated, a no "brainer", saying that everybody who uses the same high school ought to pay the same levy to support the high school and the feeder systems in that, if you can't do that, you're not going to be able to *have what it takes to get government under control.. This is a small step to doing that. If you can't do this, there's a lot of other things that need to get but you're not going to be able to get done. Senator Baack, if you'd like to use the rest of my time I'd be happy to yield it to you.

PRESIDENT MOUL: Senator Baack.

SENATOR BAACK: Thank you, Senator Withem. Madam President and colleagues, there has been a lot of discussion about the procedure and the process that we've used, but there certainly has been very little discussion to say why we shouldn't do this policywise. It has been very interesting and it's something that isn't a new idea. I've introduced it three years in a row.

It is something that has been out there in front of us. it's

7101

not a new idea at all. We talked about it when we did affiliation a number of years ago. It's not a new idea, it's not something that is new. And Senator Wickersham talks about, well, you're going to have some people paying for other children to go to school. We have a system in this state that provide::, that a whole lot of people are paying for school that don't even have any children in school.

PRESIDENT MOUL: One minute.

SENATOR BAACK: Are we going to go to a system that only requires people who have children in school to pay for them?- Of course we're not going to do that. Education is a responsibility of everyone in society. It's not a responsibility of just those who have children. I think this is one of those cases where we need to make a policy decision, we need to move forward on this issue. We need to say, look, a common levy is not going to put these schools out of business. They are still going to have their local control, they are still going to have their local boards, they are still going to make local decisions. But we're going to provide that every system of K-12 education in this state functions in the same manner. We're not going to provide for a unique system that allows for tax havens to exist. So with that I urge you to vote for the motion to return and then to adopt the amendment. Thank you.

PRESIDENT MOUL: Thank you, Senator Baack. We'll now vote on the motion to return. All those in favor please vote aye, opposed nay. Have you all voted? Senator Withem.

SENATOR WITHEM: Yeah, let's have a check in and then have a roll call vote.

PRESIDENT MOUL: Thank you, Senator Withem. Would the senators please check in. Senator Haberman, please check in. Senator Hartnett, please check in. We will proceed with a roll call vote in regular order on the motion to return. Mr. Clerk.

CLERK. (Read roll call vote. See page 2640 of the Legislative Journal.) 25 ayes, 20 nays.

PRESIDENT MOUL: The motion is adopted. We are at Select File. Senator Withem, for opening on the amendment.

SENATOR WITHEM: The amendment has been fully debated. if

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people have questions I'd respond or if other people say things I need to respond to I will do so. I would just urge a yes vote on adoption the amendment.

PRESIDENT MOUL: Thank you, Senator Withem. Senator Robinson.

SENATOR ROBINSON: Madam President, members of the body, I think we ought to have an amendment that phases this in. If we're going to pass this I don't think we should do it in one swoop. That's my feeling. That's the reason I voted to bring the bill back off Final Reading. I think it's too big of an impact in one year. I could probably vote for it if it were over a two or three year period of time and I think it's, as I look at the figures, I think that's the appropriate way to do it. I think it's something that probably should be' done and I think-another thing that we don't have is information on the printout on what it really does to all the school districts. But I really think it's something that should be done. Thank You.

PRESIDENT MOUL: Thank you, Senator Robinson. Senator Withem, followed by Senators Abboud and Bromm. Senator Withem. Senator Abboud. Senator Bromm. Senator Rasmussen.

SENATOR RASMUSSEN: Madam President, members of the body, I rise in support of this. I found the discussion interesting. I started thinking about my own school districts and I have a school district that has one high school, one middle school and multiple grade schools and those grade schools all pay the same levy to support that school district. Now you may say that's different, it's different only because historically they were arranged differently because they're the same in the sense that those, each ,)f those school districts, each of those elementary schools have children with very different needs. Have one elementary school where almost 50 percent of the kids are on free and reduced lunch, another elementary school where those kids could buy lunch for three other kids as well as there own. Does that mean that the one school district which is wealthier should pay a lower levy than the school district that has children of greater need? I don't think so. In fact, as I find, heard someone talking about if the Class I model is done properly, it's a great example of where we ought to be today in many of those schools that aren't Class I in terms of something we call site based management. If we pass this, those Class I schools are going to be capitulated into the roles of leaders in this state because they will have had experience with that

7103

structure of having school boards that run that school at that particular site. But I do think there ought to be a common levy just as there are in other school districts which have the same structure in the sense of a single high school, a single middle school and multiple elementary education schools. I urge your support of this.

PRESIDENT MOUL: Thank you, Senator Rasmussen. Senator Wickersham, followed by Senators Robak, Bromm, Moore and Dierks. Senator Wickersham. Senator Robak.

SENATOR ROBAK: Thank you, Madam Speaker and members of the body, I just rise to oppose this amendment today because in my district I have every class school except a IV and a V. I have many Class I's, Class II's, Class III's and a Class VI and apparently Class I's and VI's do not like this from the letters I get from my constituents. I do, however, have a Class III, regular Class III, oh, I have three or four Class III's, so you can see I represent a wide variety of schools, a wide variety of people. But for most of my constituents, they really like to have their Class I's and their Class VI schools exist and we've heard a lot today how we do not know how 1059 affected this bill at all because there doesn't seem to be any information on which school will be hurt, which school will be helped. And if I remember correctly, a few years ago we did pass 1059. It was supposed to equalize the funding and equalize the schools in our state and the poorer schools were supposed to get more help than the so-called rich schools and so that-was supposed to take care of this problem. Apparently it didn't work, maybe it did work. And then 1059 was put on the ballot as a referendum by the voters of the people and I would just like to point out to my colleagues chat it was the rural and outstate Nebraska that passed 1059 on the ballot. They passed it on the ballot. They didn't repeal 1059. It was not Omaha or the metro areas. I just wanted to bring that out to your attention and if 1059 is working, then I think we should remember that. Thank you.

PRESIDENT MOUL: Thank you, Senator Robak. Senator Bromm.

SENATOR BROMM: Thank you, Madam President. Senator Withem, there's something about the finance system that I don't, there's a lot I probably don't understand, but one thing in particular I don't understand. Let's take Senator Jones' district out there and this one Class I within the VI is getting $200,000 of state aid. Now we combine all those districts so they have a common

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levy and we're saying that $200,000 of state aid is going to go away. Now why doesn't that state aid stay within the Class VI? Can you explain that in...

SENATOR WITHEM: Because we don't treat the Class VI's, I mean that was one proposal that we had to deal with this that was rejected. We don't treat the Class VI as an entity -for state aid purposes. We treat each individual school differently, and what will happen as a result of this then, because all of the value, part of this amendment will be to treat all of that Class VI as an entity for state aid purposes. We currently do not do that. We treat each school district individually. Class VI ... a Class I that belongs to a Class VI is people that .live in that, actually physically reside in two different school districts. I know it's hard to explain, but they physically reside in two different districts. They don't reside on one district that is a part of another. They are legally two different districts and you have to treat them, unless you lump them together statutorily, you have to treat them. as separate and that's what we do under current law. This bill will lump them together into a single entity for state aid purposes.

SENATOR BROMM: I tried to do some computing on this in one VI in my district and we came up with an approximate common levy which was kind of a product of averaging the various district levies, but it still doesn't make sense to me when you do that that you lose this tremendous amount of aid and it flows other places and would become obviously more dependent upon property tax in those districts and you know that's the real crux of the problem I think, besides the fact that we have six different school boards and six different schools and everybody wants to run their operation the way they want to run it and in some of these areas we have vast territories covered, not as much in mine as out in Senator Jones' but you have literally miles and miles of territory. So you're talking about differences in the way one school in our district has a gymnasium, one country school has a gymnasium and it's a nice gymnasium. The one down the road has four walls and desks and there are tremendous differences out there. Now affiliation you know for the most part I think is a great idea. It was a great concept, but I have a hard time swallowing that in Class III districts where we have virtually the same facilities. We have districts paying 90 cent mill levy and 10 miles down the road we have a $1.55 or $1.60 and I have...the property tax equalization of this thing does not turn out as well as I think we would like it to. I

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would like to see affiliation work for a year or two. Let's see what we have and try to learn from that concept before we rush into cramming this down the Class VI districts' throats at this point in time.

PRESIDENT MOUL: Thank you, Senator Bromm. Senator Moore.

SENATOR MOORE: Madam President and members, I wasn't going to speak until Senator Rasmussen talked about Omaha Westside and how it was a special situation. I couldn't help but rise to my feet. You know the trouble, I mean, this time I'm going to speak to the amendment itself and the problem I have is this body always tends to act somewhat dysfunctional when it gives directions to what schools ought to do. You know when we think of Class I's we only think of the small rural isolated building out in the middle of nowhere. We don't think of the former Class II high school district that formed a Class VI and that's going to happen... I hope that happens more. And we always say we're going to encourage that, though we always pass laws that penalize that. Last year 1063 penalized, the people that penalized in my district were the people who had consolidated their schools, went to the larger town and did away with their small Class II high school. And we turned around and penalized them. My concern, I mean, I think in the future we're going to set; more Class... the pressure is going to continue to be on this Legislature to do away with Class II schools and the argument is going to be a quality issue is what is going to be there, you know, but when you pass legislation like this you put up an impediment to that because the fact is if three or four small Class II's, want to form a Class VI school, maintain their own identity, have control over their own grade school in their community but yet bite the bullet, consolidate for the better good for quality reasons and for taxation reasons, you could still argue well you still have control over your small grade school in your community and this amendment does away with that. That's been my concern all the way along and it's not... it's easy to think of that rural, the one that Senator Withem mentioned, the rural Class I that is strictly nothing but a tax and I'm not going to defend that, but the fact is not all of them are. And if we're going to encourage Class II's to close, we shouldn't be impediments to that closure like this amendment. And I think the Class VI's was always a totally different environment. You had a lot of cases where people for a variety of reasons and some of them, yes, for tax reasons, some of them were also quality of education reasons saying that we can't

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afford to continue to perpetuate smaller inefficient high schools, we are going to band together and offer hopefully, in their mind at least, a better quality product. But now with an amendment like this, in the future, as many communities and Class II's talk about going together they are going to be much more hesitant to do it because they will lose control, total control, of their Class 1, the local grade school as well. And I think if your desire is, which many people have the desire, now the Class I's are gone, the Class II's are certainly the next thing on the horizon and if for quality reason you're pushing that agenda, I would think you would want to oppose LB 839 because it would, without that, I think you have a better argument that those Class II's you want to consolidate would form Class VI's and in many people's minds at least offer a better product. But it seems like we continue to instead of rewarding and encouraging that, we mandate things upon them, I think it makes it more difficult out there and I think ;we've came a long way on affiliation, I don't have a problem with that and I think with the Class I's within a II, III, V, that made some sense. I do think Class VI's are different and I think the whole reason they exist is different and there is a historic reason there, but more importantly for the future I think this amendment ought to be defeated.

PRESIDENT MOUL: Thank you, Senator Moore. Mr. Clerk, items for the record.

CLERK: Madam President, Enrollment and Review reports LB 657 as correctly enrolled. They also report LB 231 and LB 677 as correctly engrossed. A communication from the Governor. (Read communication re: LB 121 and LB 121A.) I have two explanation of votes, one from Senator Hudkins, another from Senator Robak. And amendments to be printed to LB 124 by Senator Hohenstein.

(See pages 2641-42 of the Legislative Journal.) A reminder Exec Board meets at noon in 2102. A priority motion, Madam President, Senator Haberman would move to recess until 1:30 p.m.

PRESIDENT MOUL: You've all heard the motion to recess. All those in favor please say aye. Opposed nay. We are in recess until 1:30 p.m.

RECESS

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SPEAKER BAACK PRESIDING.

SPEAKER BAACK: Welcome to the George W. Norris Legislative Chamber. Roll call.

ASSISTANT CLERK: There is a quorum present, Mr. President.

SPEAKER BAACK: Thank you, Mr. Clerk. Do you have items for the record?

ASSISTANT CLERK: Yes, Mr. President. Your Committee on Enrollment and Review reports LB 110, LB 110A and LB 429 as correctly engrossed. That's all that I have. (See page 2643 of the Legisaltive Journal.)

SPEAKER BAACK: Thank you, Mr. Clerk. We will now proceed on the agenda. We are on LB 839E. And I believe we're on the Withem, amendment to 839E. Correct?

ASSISTANT CLERK: That's correct, Mr. President. The amendment is found on page 2584.

SPEAKER BAACK: Okay, and I do have a...I do have a list of speakers and we will work through those. Senator Dierks.

SENATOR DIERKS: Mr. Speaker and members of the body, again I rise in opposition to this amendment. I think that what actually happens here with the passage of this amendment you have eliminated the Class VI district and it becomes nothing more than an affiliated Class II or III district, does the same type thing we've already done with the affiliation process. I don't think that was part of the bargain when affiliation was sold. I think affiliation was sold on the premise that we are going to take care of those lingering Class I districts out there but not affect the Class VI districts, and this amendment would do just that. I have to respond to one of the things that Senator Withem said this morning concerning the spending per average daily membership. Those two school districts that he talked about each had two children and the average daily spending per student was like $10,000. 1 guess that probably amounts to the price of hiring a teacher out there. For the most part, these people that operate these Class I districts

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within the Class VI district are extremely competent and extremely capable and do a fine job of managing their finances. And it would seem a shame that you should saddle one school district in a Class I ... one Class I school district in a Class VI with the ... with the same spending... same spending methods, I guess, that another Class I district would have. It doesn't make much sense to one that you would say that, for instance, a Class I, if you're looking at the whole county when we have a General Fund levy of .667 all the way down to a .214 that you should say that these people should spend the same amount or they should be tie d to a common levy. And this just to not... it discourages economy. It discourages thrift in spending and I think that it counters the whole effect of the Wass VI system. So I would urge that you not support this amendment. Thank you.

SPEAKER BAACK: Thank you, Senator Dierks. Before I proceed to the next speaker, I would like to introduce some guests of Senator Day. Under the south balcony we have Senator Day's daughter-inlaw, Lisa Walters, and her daughter, Molly. Would you please stand and be welcomed by the Legislature. Thank you for being here. Senator Withem.

SENATOR WITHEM: Yes, Mr. Speaker, members of the body, feel a need to respond first to what Senator Dierks had to say because it's erroneous and it's the type of rhetoric that gets bandied about here when we're trying to have serious conversations about issues. It's the type of rhetoric that's bandied about that our friends in Washington sometimes use to inflame passions, but it bears no relationship to the fact. This amendment does not eliminate Claws VI school districts. It does absolutely nothing with the legal structure of a Class VI school district. Currently, every Class I school district in a Class VI has an independently elected board that hires teachers, fires teachers, sets policy. The high school district has an independently elected board from throughout the Class VI that hires teachers, ? policy. With the imposition of this amendment, that structure will stay in place indefinitely until such time as the citizens of that district see fit to change...se fit to change it. All it does is provide an equitable distribution of the K through 12 tax system within that Class VI, the identical distribution of the K through 12 tax responsibility that exists in every other school district in the state. That's all this does. Senator Bet-nard-Stevens, in his speech this morning, did make reference to the fact that there are more draconian methods

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out there. I mean, -it is within the will of this body on a sleepy day with the right type of provision and the right amendment offered to, in fact, abolish Class VI school districts. They don't exist by any other will than by the power granted to them by the State Legislature in the past to exist. They could be wiped out. This amendment does not do that. Let me tell you one other thing and not get into too much of the merits in discussion of the bill, but let me make an offer to people. Normally deals are cut if they're cut at all in the back rooms, in the corner of the Chamber. I'm going to offer to the opposition to this amendment a proposal and it came from Senator Robinson when he was giving his remarks before. If I can paraphrase Senator Robinson, he said, in effect, this makes sense to him but the fact that we're leaping into it and putting it into effect immediately this next school year troubled him. And I was listening, Senator Robinson. Doesn't happen all that often but I was listening in this particular case and I thought he made some good sense perhaps. So what I have done is I filed an amendment and' it's being distributed, which strikes the '93-94 effective date on this bill and reinserts a '95-96 effective date on this bill. That would give two years for getting the house in order and a sense of comfort knowing what's coming down the road when we move to the common levy. I will offer that if this amendment is adopted. If this amendment is not adopted, there will be no need to but there will be, I'm sure, more and more proposals coming in next legislative session and the issue will continue to be fought out in the Legislature. If this is adopted, then as far as I can see into the foreseeable future, there's no more need to do any structural change...

SPEAKER BAACK: One minute.

SENATOR WITHEM: ... as it relates to a Class VI. That issue will be behind as affiliation is behind us now. The mandatory reorganization of free standing Class Is is behind because we've done affiliation and the school districts are going through that. If my amend... if this amendment is adopted, I will then offer the '95-96 delay and then that will settle the Class VI structural issue as far as I'm concerned. That's what I plan on doing and I would urge you to support this amendment at this time and then I think Senator Wickersham has an amendment up there dealing with only the in lieu of tax issue and because of the drafting concern that he mentioned before, I think maybe as long as it's there we ought to go ahead an adopt that one also.

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I don't think it's absolutely necessary. I think it could be handled in E & R but we might as well be safe. Then the next amendment will be my amendment that would delay it to '95-96, and if we do that, I think we can be settled with this issue. So I would urge you to support this amendment and the next two.

SPEAKER BAACK: Thank you, Senator Withem. Senator Jones.

SENATOR JONES: Mr. President and members of this body, this kind of changes the picture a little bit but I'm still going to oppose the amendment because in my district it will really affect it. And I wonder how the spending will happen after this. What if a school in town would want to build a... or not build but maybe put a computer system in? Will all the country schools have to chip in and pay for it? Or how much can they do? And I just don't understand how the financial part of it will work on that. And I understood when we passed LB 259 that we was going to leave the country schools, the one-classroom schools alone from then on, but now we're right Lack in- the middle of it again. So I'm really opposed to this because I've got 77 of these Class I schools in my district and that's a lot of people to answer to when I go back home. So I ... I just can't see going ahead with this. I sure hope you will go ahead and vote it down. Thank you.

SPEAKER BAACK: Thank you, Senator Jones. Senator Wickersham.

SENATOR WICKERSHAM: Thank you, Mr. President. I will try to be brief because I think that we've in most part covered most of the grounds that logically we would have to cover in discussion of this issue. I'm a little bit interested in Senator Withem's amendment, not because I think it is something that I would consider to be a compromise offer, as a matter of fact, I was* going to raise the question of whether or not the amendment could even be implemented in the form that it was presented to the body in, because it was supposed to be implemented in the school year '93-94. The bill had the emergency clause on it but, as you know, that takes 30 votes. I didn't know if he would have 30 votes for 839 if the common levy provision was included. Admittedly, some people would have been put in a very hard spot if it had also included the in lieu of tax, but if there weren't 30 votes, it couldn't have been implemented in any event. So I guess maybe we should be grateful for any proposal to delay what I view as a mistake. But I think there were two mistakes. Not only is the common levy a mistake, but the

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amendment was improperly drafted and I don't think it could have been implemented in any event. And I want to raise that point because of the process that we're using today to consider this amendment. we're on Final Reading with a very, very controversial proposal. We cannot amend what we have before us to correct errors, as I pointed out earlier in the in lieu of tax provision. We could rot bring an amendment directly to change the years in which the bill would be effective. If, in fact, that would not work, we have to go through a cumbersome procedure of bringing it back from Final Reading. We can't divide the question. We cannot deal with this very, very controversial issue in the same way that we would have dealt with it on General File and on Select File. Now you can accuse me of trying to throw out a red herring and argue whether or not what I'm talking about really has any merit as far as the issue is concerned. But I think that when we have a very, very controversial issue like this and it is bound up in a procedural manner so that we cannot debate it and consider it fully, that is something important for us to consider. Quite frankly, if this issue had come. up on LB 348, there would have been amendments to it, perhaps more amendments. I had amendments filed that I think would have put in place elements that, if we're going to have a common levy, I believe would be desirable. You can read those amendments on page 2606 of the Journal. One of those amendments would have attempted to address the question that I think is a very real question and that is how do you control the spending of the Class Is once you go to a common' levy. It would have started to address that question and I think that's a very, very real question, notwithstanding Senator Withem's assurances that somehow the lid is to take care of it. Anybody who is halfway clever and has a bunch of built-up budget authority in a Class I, the lid will not solve that problem and the lid can be worked around if you're dedicated enough and smart enough. The lid is not the total answer to the question about what you do to control spending in a Class I in a common levy situation. It simply is not the total answer, maybe an answer for those who aren't clever enough, who aren't dedicated enough...

SPEAKER BAACK: One minute.

SENATOR WICKERSHAM: ... or frugal enough, but it is not the total answer. I still ask the body to reject the Withem amendment. I know we've taken a great deal of time on this. Maybe we would have even gotten to LB 348 if we hadn't have -all

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this time, I don't know. But I still think we need to reject the Withem amendment. We have an acceptable amendment to follow it. I do not believe that Select File...or Final Reading is the place to address this very, very controversial issue.

SPEAKER BAACK: Thank you, Senator Wickersham. Senator Robinson.

SENATOR ROBINSON: Mr. Speaker, members of the body, I stand to support the Withem amendment and I've heard my good friends, Senator Jones and Senator Dierks, and I know... I know what the feeling is, Senator Jones, because two or three years ago I got... they said to me, Brother Bud, we're going to 'baptize you and anoint you. And I got anointed with about 200, $250,000 for my school district; was called hold harmless and it's still on. But I know what the feeling is, Senator Jones, and it's not very good, I can tell you that. And Senator Dierks says that his school districts are the Class Is spend their money frugally, and I believe that. I think my school districts do too. And you talk about your computer systems, what would they do with the compute systems? I don't know what they did in my district when they got... each district got cut from 50 to 60 thousand dollars, but they didn't... they haven't had that money' for two years. And ... but I know what the feeling is and it hurts, doesn't it? 1 know it does. But I ... I think this is something that you can't defend in the long run and I think with the delay of two years I think it's a... I think it's a good way to go. In fact, you have two years to change it you want to. But there's nothing that divides the Legislature like state aid, but I guess, in all honesty, you've got to stand up and defend ... defend your own turf and that's what I'm doing. Thank you.

SPEAKER BAACK: Thank you, Senator Robinson. Senator Abboud.

SENATOR ABBOUD: Question.

SPEAKER BAACK: The question has been called. Do I see five hands? I do. We will now vote on ceasing debate. All those in favor vote aye, opposed vote no. Record, Mr. Clerk.

CLERK: 25 ayes, 1 nay on the motion to cease debate.

SPEAKER BAACK: Debate has ceased. Senator Withem, would you like to close on your amendment?

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SENATOR WITHEM: Yes, I would. And we're under call, are we?

SPEAKER BAACK: We are on Final Reading.

SENATOR WITHEM: On Final Reading. Could I ask for people to check in while I'm closing and then we can begin that process to save time?

SPEAKER BAACK: Would the senators please check in. You may begin, Senator Withem.

SENATOR WITHEM: Thank you, Senator Baack. I have very little to say in closing, other than to indicate that what this amendment does is two very important policy considerations, policy consideration one being the in-lieu-of tax issue does need to get done. The Department of Education is operating under an interpretation from an Attorney General's Opinion indicating that their money cannot be distributed. It ... keep in mind this money is normally distributed in February. It has not been. A number of school. districts are experiencing cash flow. In terms of the E clause issue that Senator Wickersham raised that we have been through this before when people are in objection to one portion of the bill but the other part has to pass, we usually vote first on whether a bill should pass with the emergency clause and if it doesn't, we vote to pass it without, then we move to reconsider and people then are put in a position where we have a bill that they didn't like but part of it has to go into effect immediately and usually that gets done. That's usually not a problem, the need to get an emergency clause. Even if it is, it would delay distribution of this money another three months. That would not be the end of the world as long as we have a method in place to distribute it. The portion of the amendment that's taken the most controversy and the most time is the Class VI common levy. We seem to have a reiteration of the same old arguments. I've stood on the floor and counted them. I think Senator Baack made a point in the closing on the motion to return that there have been a lot of arguments procedurally why people didn't like what we were doing, but there are very few factual arguments as to why you have one system of supporting K-12 education for freestanding Class Is and an entirely different, more favorable system to some of them for supporting other...another K-12 system. I would remind the body, in case some of you weren't in here about what I had suggested. I didn't... I noticed I didn't get much of

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a response for a suggestion as to how we could resolve this issue once and for all but let me repeat that. If this amendment is adopted, we have a Wickersham amendment to consider which I assume will be adopted. Then I filed an amendment, it's been distributed, that takes the effective date from '93-94 up to the '95-96 school year. The issue then of Class VI structure will be off the table because it will no longer be a favorable tax structure for that particular system, it will be an educational structure. And, ironically, and some of you may not have heard my remarks earlier, ironically, some cities, for purposes of establishing education policy, are moving toward a... an approximation of the Class VI structure where local school buildings have been ... have locally elected boards that set local policy for local elementary schools. I see nothing wrong with that, policy being set at the building level as is done now in a Class VI. So if we can remove the ability to have tax havens, I think it would be worthwhile. Again point out to you that the ... the issue... the amendment that I have to follow will be one that will delay the effective implementation date of this by an additional two years. So I would urge you to adopt this amendment and then to adopt the following amendment.

SPEAKER BAACK: Thank you, Senator Withem. Senator Avery, would you check in, please. All members are now present. We will now vote the Withem amendment. All those in favor vote aye, opposed vote no. Have you all voted? Record, Mr. Clerk.

CLERK: 25 ayes, 21 nays, Mr. President, on the adoption of Senator Withem's Select File amendment.

SPEAKER BAACK: The amendment is adopted. Senator Hohenstein.

SENATOR HOHENSTEIN: I move that LB 839E be advanced to E & R for engrossing.

SPEAKER BAACK: Heard the motion to advance LB 839. All those in favor say aye. Opposed no. It is advanced.

CLERK: Mr. President, excuse me, Senator Wickersham would move to return the bill for a specific amendment. (The Wickersham amendment, AM2553, appears on page 2644 of the Legislative Journal.)

SPEAKER BAACK: Senator Wickersham.

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SENATOR WICKERSHAM: Thank you, Mr. President: This amendment has been discussed before. It's only necessary now to correct an error in the amendment that was just adopted. I would urge the return of the bill.

SPEAKER BAACK: Discussion on the return. Senator Cudaback. Senator Withem.

SENATOR WITHEM: Yeah, just a question for Senator Wickersham.

SPEAKER BAACK: Senator Wickersham.

SENATOR WITHEM: The... and the question is I have not had an opportunity to compare to the amendment that was just adopted with this one. Is it literally word for word the same with the exception of that language that was stricken in my bill that should not have been etricken?

SENATOR WICKERSHAM: I ...

SENATOR WITHEM: To your best knowledge, it does not impose new factors in formulas or anything, different from what's already in the bill?

SENATOR WICKERSHAM: No. It does not...

SENATOR WITHEM: Okay, I just wanted to make absolutely sure. I thought that was the case and with that understanding I would be delighted to support it. If you need to expand on that, you can use the rest of my time.

SENATOR WICKERSHAM: I guess, just one cautionary comment. I, like you, I've not had time to go through it word by word. The request to bill drafters was specifically to incorporate your amendment from LB 348.

SPEAKER BAACK: Any further discussion on the motion to return? Seeing none, do you wish to close, Senator Wickersham? Waives closing. We'll now vote on the motion to return. All those in favor vote aye, opposed vote no. Record, Mr. Clerk.

CLERK: 42 ayes, 0 nays, Mr. President, on the motion to return the bill.

SPEAKER BAACK: The bill has been returned. Senator Wickersham,

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on your amendment.

SENATOR WICKERSHAM: Just briefly. I think it's been discussed enough. What it is is simply a reenactment of the Withem amendment that would have ... was filed on LB 348. It deals with the in-lieuof tax question. It simply inserts a few words that I believe were inadvertently omitted in the amendment that we adopted earlier.

SPEAKER BAACK: Discussion on the amendment? Seeing none, we will now vote on the amendment. All those in favor vote aye, opposed vote no. Record, Mr. Clerk.

CLERK: 44 ayes, 0 nays, Mr. President, on the adoption of the Select File amendment.

SPEAKER BAACK: The amendment is adopted. Senator Hohenstein.

SENATOR HOHENSTEIN: I would move that LB 839 be readvanced to E & R for engrossing.

SPEAKER BAACK: You've heard the motion to advance LB 839. All those in favor say aye. Opposed no. It is advanced.

CLERK: Mr. President, Senator Withem would move to return the bill. (AM2568 appears on pages 2645-46 of the Legislative Journal.)

SPEAKER BAACK: Senator Withem.

SENATOR WITHEM: The amendment is on your desk. It's been discussed, hopefully, enough. It changes the implementation date that currently is in the bill from '93-94 to '95-96. 1 would urge your adoption of the amendment.

SPEAKER BAACK: Discussion on the motion to return. Senator Cudaback. Seeing no further discussion, we will vote on the motion to return. All those in favor vote aye, opposed vote no. Record, Mr. Clerk.

CLERK: 38 ayes, 0 nays, Mr. President, on the motion to return the bill.

SPEAKER BAACK: The motion ... we are on Select File and the amendment. Senator Withem.

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SENATOR WITHEM: Strike 193-94 and insert 195-96) subtotal of the amendment.

SPEAKER BAACK: Discussion? Senator Cudaback.

SENATOR CUDABACK: Mr. Speaker and members, at times we do things, I guess, just for the sake of the record, we state this anyhow. And this puts me in a tough spot today. I happen to sit between districts that are going to gain on one side, this side over here loses a tremendous amount, Senator Jones, up here they lose accordingly, and so it puts me in a tough spot. My district happens to be one of the gainers and I guess it puts you in the spot, do I vote with the State of Nebraska or do I vote for my district? In this case, my first vote was to go along with my constituents and vote a green on the issue. Well, during the lunch hour, why Senator Robinson and we had a little chat with several of its and we discussed the issue and they almost had me convinced that perhaps if we didn't gain all that much in a certain area why maybe you shouldn't do this. But with the two-year delay here, I think probably it's in the best interest of everyone to do this due to the fact that if we don't delay it two years, we're going to be back with something next year and it might come perhaps in one year. So, for the sake of everybody and for the record, I want to state the fact act that I do gain in my area but, unfortunately, people do lose in other areas. But I think the State of Nebraska with having the concern with 10 59, 1 think it's probably the best., Thank you.

SPEAKER BAACK: Thank you, Senator Cudaback. Senator Moore.

SENATOR MOORE: Well, with Senator Withem's amendment I gain in my area too. I don't have any Class VIs and so why would I be opposed to it? I'm not opposed to it to defend country schools. I don't... I would totally agree with Senator Withem that if somebody doesn't have any kids then that's unfair. You have to go beyond just the country schools, you know. And we already know there has been a movement that will continue to try and attack the Class I schools, the small rural high schools in the area of the quality area. And the fact is that some of these Class VIs now, and I hope in the future, are going to be a conglomeration of Class IIs that have joined together to deflect the quality issue by getting strength in numbers, so to speak, and attacking the quality that you had on but. at the same time retain the local control -'in the community. I mean, I have three

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Class IIs talking right now about doing something on the consolidation front. This bill, I am very concerned, will (inaudible) any activity in that area and so I don't ... my concern is that those ... this... if you want to... if you think in your mind only the Class Is, it's an easy vote, but at the same time if you're going to continue on the path of attacking the Class IIs, you're taking away a tool which can be easily resolved to your satisfaction of having ... not having a tax saving and, in this case, you're probably going to lose 1059 *money if they do it anyway. But they will achieve a quality product that many people have said they need to do. And so it's not in the area of the country school that I'm talking about and I ... I mean, it's not because of Senator Jones' problem, or Dierks' problem, or Senator Wickersham's problem, it's not even a problem that I have in my district because I gain money on Withem's amendment. But the fact is my concern is you're taking away a tool that allows school districts to achieve something many of the very people pushing this amendment have always said is what they should be doing and now take away a tool for them to achieve that.

SPEAKER BAACK: Thank you, Senator Moore. Senator Lynch.

SENATOR LYNCH: Mr. Speaker and members, I really wasn't going to talk on this but since Scotty and others did I feel obliged to stand and say that some of you may remember that I introduced a bill that would provide that there be one school district per county, period. And, believe it or not, there are eight counties in the state that have one school district. Douglas County has 15, seven of those overlap-in other counties. To be completely frank, Senator Withem is one of the people who stood in the way of people like me from addressing this issue even more seriously, as it applies to the Class I and Class Il districts, he really did. You know, one of the things we talked about when I introduced a bill to consolidate all school districts in every county into one district and administratively it's easy, it can be done. In fact, to be completely frank, the county board could be the school district. They could hire the superintendent and you could run all the schools, no closing of any schools, don't, you know, dismantle and throw away your buses. But it can be done, you all know that. So what this is it's a parochial, political issue. So I would like to suggest this. If we can't seem to agree that we can, in fact, support an effort that provides that everybody in this state supports a high school system, not just when it's convenient when your kids

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go but all the time. So why don't we just forget about it and create all ... change all the classes, I, II, III, IV, V and VI, and then have every school district a K-12. If you've got eight kids in your school district, that's fine. You know, build a gymnasium, put together an athletic program, hire the science teachers. I know how you do it, but, obviously, that's silly, isn't it? You can't do that. You just can't do that. This amendment makes sense. It's a compromise. But, to be completely frank, for those of you who are concerned about your neighbors in the small cities and villages ripping you off because they might spend more money, that's fine. Why not just break away. Train your kids all the way from kindergarten through the 12th grade and then go right to college. Why not? If you don't trust each other and you really think ;hat they're going to rip you off, that's what I would do. I would just break away from it altogether. It's kind of silly and I said silly things, but some of the arguments used are, in fact, silly and they're not based and sounded on fact. Now, Senator Broom (sic), I can understand where Senator Bromm, I mean, comes from. You know, comes from a county, however I pronounce his name, that not anymore but used to have 45 school districts in Saunders County, used to, 45. By the way, I own property in one of them. I'm not sure if I'm paying more taxes or less taxes than I should. But, in any case, in any case, think about some of the things I said. And also think about Senator Withem, as Chairman of the Education Committee, being the buffer between silly and unnecessary change in what you're talking about now which is really pretty meaningful, necessary and appropriate. Hope you support the amendment.

SPEAKER BAACK: Thank you, Senator Lynch. Senator Bromm.

SENATOR BROMM: Thank you, Mr. Speaker. I just want to register one last protest, I think, to the procedure by which we've. come to this resolve. I think this is part of what causes the Class I districts and the rural districts to be somewhat mistrustful of the way we do business. There's no reason that this couldn't have been handled as a straight up, head-on issue without coming down to the second or third day before we're done with the session. We've got some important legislation to turn to and I don't want to belabor this or unnecessarily delay it anymore than we have. If it's not important to get it effected immediately and it can wait till '9596, and I do appreciate the olive branch that's been submitted by Senator Withem, then it could have been done next year and we wouldn't have had to have

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Jane 2, 1993

token the valuable time we've taken and caused what I think is a perception to become reality to those folks that think that we sometimes sit down here and wait until we do think people are asleep. As Senator Withem mentioned, on a sleepy day he could have introduced an amendment to abolish the Class VIs. Well, I don't... I resent doing business that way, I guess, and I would rather have seen this come about in a different fashion, if it had to come about. And the point I want to make is it wasn't absolutely necessary to get it done this year. It could have been done next year. If this amendment is adopted, and I will vote for this amendment, it won't become effective till 195-96 and this was just totally unnecessary. The portion of the amendment dealing with the distribution of the in-lieu-of tax funds is a necessity and we needed to get to that. It didn't need to be tied to this. This is an issue that deserved to be considered on its own and to be debated adequately and to rise and fall on its merits and I just wanted to register my thoughts on that. Thank you, Mr. Speaker.

SPEAKER BAACK: Thank you, -Senator Bromm. Senator Bernard-Stevens.

SENATOR BERNARD-STEVENS: Thank you, Mr. Speaker, members of the body, just...I had to push my light and respond just a little bit to what Senator Bromm said because I really do disagree philosophically and maybe it's being more years, I don't know. But, Senator Bromm, I think you're incorrect. It was very straightforward. I think if you (inaudible) members in the body, 49, 48 senators were here towards the end, probably a fairer hearing on this than we have on other bills during the session when there are only 38 senators here, because the others are gone. And some bills were one vote short or two votes short with 15 members absent. Was that: a fairer hearing just because it was done on General File? Was it a fairer process at that time? I think there's arguments whether that would be a fair process or not, whether it had the best hearing of all senators. Is this a good process? I think you have to answer a couple of questions on whether a process is good. Number one, did the body understand the amendment? And I think, very clearly, the body understood the amendment. I think, very clearly, the body understands what this amendment would or would not do. Second of all, I would like to point out that it's not just on Final Reading, I think the thing that we need to be careful about is there are two rounds of debate that this bill is going to go through. It just went through the first round. It skipped

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General File and it happens a lot where amendments will be added on Select File. Senator Bromm didn't come up and others didn't come up and talk about those amendments that were offered just on Select File. This bill was brought back to the second round of debate and it had a tremendous debate, pro and con. The vote was very close, and as all controversial bills are, that's the nature of these kinds of votes where you don't know what's going to happen until the final count is made. And there will be then a separate round of debate for this issue which will be on Final Reading and there will be motions to withdraw... to strike the enactment clause. The bill will be brought back, I mean, for sake of discussion, and there will be one more round, thorough round of discussion on this hill and then there will be a vote to see whether or not this bill, as amended, will pass. It's a very good system. This process has worked very well. It's got excellent debate compared to other debate topics we've had with fewer senators present. I wish on all bills that I had, controversial or not, that I 'would have the...the luxury of having 48 or 49 senators here really understanding the issue, having a thorough hearing and debate and having a vote up or down. That's the dream of democracy. That's the dream of representational government and that's the dream of our government, it happened here today as well, as with other issues. The process works very, very well.

SPEAKER BAACK: Thank you, Senator Bernard-Stevens. Any other discussion on the amendment? Seeing none, Senator Withem, do you wish to close?

SENATOR WITHEM: Yes, I do. Three points that were brought up. Number one, Senator Moore, I appreciate very much your bringing up the issue you brought up. I think it's a good one and I wish we would have had more time to discuss it. It may not surprise you to know my conclusion is 180 degrees opposite of yours. I've worked on this school reorganization issue, oh, about seven years now and originally when I sat down at the table, naive, young senator that I was, or naive, middle-aged senator that I was, I thought, yeah, the logical conclusion of this is all property in the K-12 system would allow people to form Class VIs any place they want to. There"s a lot of opposition to the formation of new Class VIs and most of it centers around the fact that most of the pressure around the state prior to this to form a Class VI has been because it will cause people's taxes to be lower. With this amendment adopted and this bill passed, that's no longer a reason for forming a Class VI. It will not

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result, necessarily, in lower taxes. What it will do, hopefully, though, I've long favored, Senator Moore, the creation of a Class VI to do exactly what you have talked about. Two or three Class IIs get together... as a matter of fact, I think we did put an amendment on one of the reorganization bills to, hopefully, allow that to happen more easily, two or three small Class Us that go through the agony of wanting to keep their school open but knowing that they just can't offer the high school ... quality high school education at an affordable price, but want to hang onto something for their community, turning that into a Class I and forming a Class VI with two or three other neighboring communities to form a new high school district but hang on something for their community, and I understand this. I mean, the community where I grew up, we lost our high school because of this very issue when I was a junior in high school, kept the elementary junior high open, the junior high went about ten years later, now the elementary is probably going to go this year. They passed a bond issue. And that's agony for a small community, I understand that. The Class VI model may, in fact, be one that we can apply in this particular circumstance, once it's no longer the suspicion is not there that. it's merely for tax haven advantage, it's for other education reasons. Second point is the gainers and losers point of it, we talk a lot about that. The advent of computers causes us to worry about that. Let me tell you, there's stuff going on out there in Nebraska that has more of an impact on 1059 gainers and losers than anything we talk about here in the Legislature. And my urban colleagues need to listen and wake tip on this issue because we're 'not that far from getting phone calls from our superintendents saying, why did our state aid go down? Or why didn't we get as much more as we thought we did? Well, the reason that's going to happen is because of the 80 percent ag land valuation. Those numbers are just going to get cycled into 1059 numbers for this next year. Is it something we ought to come back and try to get changed legislatively? Senator Elmer says yes and I had to hesitate just a moment or two. Not for the purpose of 1059 distribution we shouldn't, if there are other policy reasons for doing it, maybe we should. They're going to be... anything we do is going to have a 1059 impact and that's what 1059 is all about. It's to equalize property valua... equalize property tax dollars to school districts to account for variances in property valuations. Anything we do that affects property valuations is going to have a 1059 impact. Third, I thank Senator Bernard-Stevens for commenting on the straight up, head-on approach.

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SPEAKER BAACK: One minute.

SENATOR WITHEM: I know people don't say things necessarily to antagonize people but I've got to admit, Senator Bromm, I was a little resentful of the implication that there was something shady or underhanded. The bill was introduced on the first day. We knew it was out there. We've been up front all along saying it's a goal to accomplish the common levy. The amendment was. printed in the Journal on the 30th of April. As I said, you've had daily contact from the Class VI folks down here lobbying on this bill. The other side of the people have lobbied on it. We took a different tactic here because that's what's available to us, to make sure we got the issue considered. I don't resent that... I don't apologize for that. I think it was a very straight up approach. I think what we've done here is removed another contentious issue in terms of education' policy in our state by adopting this amendment and then by adopting the whole bill. I would urge you to do both.

SPEAKER BAACK: Thank you, Senator Withem. You've heard the closing on the amendment by Senator Withem. We will now vote on the amendment. All those in favor vote aye, opposed vote no. Record, Mr. Clerk.

CLERK: 29 ayes, 0 nays, Mr. President, on the adoption of the Select File amendment as offered by Senator Withem.

SPEAKER BAACK: The amendment is adopted.

CLERK: Mr. President, I have a motion on the desk. Senator Withem ... or excuse me, Senator Wickersham would move to indefinitely postpone LB 839.

SPEAKER BAACK: Senator Wickersham.

SENATOR WICKERSHAM: Mr. President, I understand that there may be a request for a point of order here to see whether, in fact, this motion is in order. I have brought it, at least in part, so that we can discuss the issue of whether or not it is in order and to illustrate that when we take up the kind of issue that the common levy represented on Final Reading it is not, in my opinion, business as usual. Or, at least, if it is going to become business as usual, Final Reading will become a very different creature than it has been in the past. Now, I ... in

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the brief time that I have been here, I have heard people say that normally all of the debate on a bill took place on General File. And now gradually it is moving to Select File because we all know that if you get it on at Select File, there is very little opportunity to take it off on General File. Part of what we did here today I think encourages people to use General File or Final Reading and we will further encumber our process, and, further, it encourages us to hunt for bills with any kind of germaneness and bring in whatever we desire. I didn't raise the germaneness issue with the amendment offered by Senator Withem because part of his amendment was, in my opinion, germane, part of it was not. But I think our rules arc such that if any part of it is germane, you bring in the whole thing. There's a lesson to be learned there as well for Final Reading. I think the discussion today' may very well change, or at least is going to change my impression about what we should do with Final Reading. Now, admittedly, it's a little bit difficult to do things on Final Reading. You have to do them in a very slow and ponderous fashion, but the lesson today is that they can be done and that lesson is certainly not lost on me and I'll bet you it isn't lost on a lot of you. Now, the one thing that we would have left, perhaps as a procedural matter, is the kind of a motion that I have now got pending and I think it's an appropriate motion and I think the bill ought to be indefinitely postponed.

SPEAKER BAACK: Thank you, Senator Wickersham. Senator Moore, you do have the option to lay it over if you wish.

SENATOR MOORE: (inaudible). Since this is the committee's bill, I would take it up.

SPEAKER BAACK: We are on the motion to indefinitely postpone. Senator Coordsen, did you wish to address the motion?

SENATOR COORDSEN: Thank you, Mr. Speaker, members of the body, whether or not there will be a question on the appropriateness of this motion is not what I wanted to visit about a little bit. But I think that all 'of our rules and our processes here are steadily evolving and we do make changes from year to year, and we find new methods to use our rules and the majority, at some point in time, decides to change the rules. It would appear that if the process that we have established with fairly large number of attempts to put whole bills in and successful attempts on Final Reading we probably, Senator Will, should be at least

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considering the rules change that would prohibit this type of activity unless at least four-fifths or two-thirds, whichever, at least minimum of 33 of the members would have to vote to put a bill in that had ... or an item in that had appeared at some other time as a bill. It's necessary that we retain, I think, the ability to amend issues on Final Reading for the purposes of correction for changes that are not apparent to it at the time, but when we bring whole bills in that had some opportunity at other times, simply because this is our established process, I think it's something that's going to prove to be overburdensome for our system if we continue this into the future years. Thank you, Mr. Speaker.

SPEAKER BAACK: Thank you, Senator Coordsen. Senator Hall.

SENATOR HALL: Thank you, Mr. President, and members, I rise to oppose the motion to indefinitely postpone. I wish Senator Wickersham were right, I've got a bill on Final Reading that's got 21 amendments on it. I wish this were 'not the normal practice for purposes of dealing with things, but I can remember many a bill that we returned from Final Reading, especially in the last week of the session where we've had to do specific amendments, maybe not ones that were as substantive as the ones that have been placed into LB 839 but it's not a new process by any stretch of the imagination. It has been a viable option whether exercised or not, just as the debate on Select File is no,", one that through the process that we presently have of voicing those bills over is not always exercised unless the bill happens to be one of some controversy or one that has the... an amendment pending. It is clearly three stages of debate is how the Constitution reads for purposes of this Legislature and how we address legislation. Final Reading is a stage of debate. Whether or not amendments are adopted is not an issue. The fact of the matter is the Legislature has the power and the ability and each member has the authority to offer amendments to a bill that happens to be sitting on Final Reading and I'm looking forward to ... well, not looking forward but I'm going to be dealing with a bill that's on Final Reading that has a number of amendments pending to it, but that's the way the process is structured and I don't see that the process we've gone through on this bill is one that is by any means new, let alone unique, to LB 839E. I would urge you to reject the motion* to indefinitely postpone and to advance the bill to E & R for engrossing.

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SPEAKER BAACK: Thank you, Senator Hall. Senator Lynch.

SENATOR LYNCH: Mr. Speaker and members, in addition to the concern that some people obviously display now regarding a bill being including as an amendment on Final Reading or even on Select File, the fact that we rewrite bills on the floor is obviously a problem. the number of amendments offered by some senators as compared to others with a yellow pad and go through all the whole yellow pad thinking of other amendments to change is obviously a problem as well. One of the things other states have done, and I can say as an old member of the Rules Committee, is to provide that no amendments, no amendments, including bills that amendments that was offered by Senator Withem, as an example, on Final Reading, which was in itself a bill at one time, no amendments can be offered until they're submitted to the Rules Committee at least two days before the bill they intend to amend appears on the agenda. That's pretty drastic, but if you're concerned about these things, that's one way to handle -it. Now there's people who are very concerned about that because it gives too much power to a Rules Committee chairman, but the reason that other states have that is because of the kind of debate we're having here now. So when you think about the extremes and the arguments and the extreme arguments that develop as a result of our kind of procedure that we have now, you have to think about these things as alternatives. It would be interesting for us to debate whether or not all amendments have to be written at least two days before and a bill appears before the body and then have the decision made by the Rules Committee as it pertains to their germaneness and appropriateness and, in fact, repetitiveness, etcetera. Could save a lot of time. Obviously, it won't be as democratic and, obviously, transfers an awful lot of the power and authority of the individual senators to a committee but, you know, if you're not satisfied with the system, think about that as well.

SPEAKER BAACK: Thank you, Senator Lynch. Senator Withem.

SENATOR WITHEM: Yeah, I'm trying to find specific reference in the rules. Senator Wickersham said he put this up here to gain a... somebody to ask for it to be ruled out of order and nobody's ... nobody has met his desire yet, so I will do so. It's my understanding that this bill has been returned to Select File for a specific amendment. That specific amendment has been adopted. That's the only thing that can be considered at this stage of debate. After it is returned to Final Reading, then an

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UP motion is not in order because the proper motion at that time is to return for purposes of striking the enacting clause, such motion would be in order. You know, I would further point out that those that are in opposition to the issue as decided still have many options strategically before them. I really don't know what good debating and arguing and, you know, fighting procedurally, particularly if you're delaying time for which you can legitimately consider LB 348 at a future date, I think...I think you're probably wasting time that could be used more effectively but don't let me ... my opinion on that change your views. I would, I guess, instead of standing here rambling, trying to think of what to say, I would just once again return to the point where I would challenge this motion as not being properly in order at this point.

SPEAKER BAACK: Senator Withem, I will take your point under advisement and I will rule that it is not in ... the motion is not in order. The motion is definitely out of order at this point. Senator Wickersham, If you wish to, you may challenge the Chair but I think that this motion is out of order.

SENATOR WICKERSHAM: I will not challenge the Chair.

SPEAKER BAACK: Thank you, Senator Wickersham. Senator Hohenstein, on...

SENATOR HOHENSTEIN: I would move that LB 839E be readvanced to E & R for engrossing.

SPEAKER BAACK: You've heard the motion to advance LB 839. All those in favor say aye. Opposed no. It is advanced. We will now proceed on the agenda to LB 840E. We are on Final Reading. Members, please take your seats so we may proceed with Final Reading. Mr. Clerk, LB 840E.

CLERK: (Read LB 840E on Final Reading.)

SPEAKER BAACK: All provisions of law relative to procedure having been complied with, the question is, shall LB 840 with the emergency clause attached pass? All those in favor vote aye, opposed vote. Have you all voted? Record, Mr. Clerk.

CLERK: (Record vote read. See pages 2646-47 of the Legislative Journal.) 49 ayes, 0 nays.

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