Floor Transcripts

LB 1290 (1994)

General File

February 28, 1994

SPEAKER WITHEM PRESIDING

SPEAKER WITHEM: While the Legislature is in session and capable of transacting business, I propose to sign and do sign LR 318 and LR 320. Next item is General File. Mr. Clerk, LB 1290.

CLERK: Mr. President, LB 1290 is a bill that was discussed on February 23. It was a bill originally introduced by Senator Warner. (Read title.) The bill was presented. There was an amendment presented to the bill offered by Senator Wickersham and Warner. However, I do have a priority motion, Mr. President. Senator Moore would move to bracket the bill until March 2, 1994.

SPEAKER WITHEM: Senator Moore.

SENATOR MOORE: Well, Mr. President and members, good morning on

9477

this Monday morning. It's Monday morning but we're kind of .still on the same debate, even though I must admit on Friday afternoon the Department of Revenue at least delivered to my office, and I don't know who was on the list that all received those numbers, but we have now received some numbers from the Department of Revenue and I think the one thing maybe I never made clear last week to Senator Warner -and others, it wasn't exactly the numbers per se that I was interested in, it was the ability of those numbers to do the job is what I'm interested in. At this point in time, though, the actual broad data as presented to members of the Legislature, at this point in time it is unknown to me, one, what exactly that data means. I mean there was certainly no explanation with those numbers, and I'm not criticizing anyone because of that, but just having the numbers plunked on our desk is not exactly enough yet. I think it's imperative that members of the Legislature have a chance to interchange with the Department of Revenue and look at the situation and make a conscious decision on whether or not the data that we have, because actually the process as it works now, so everybody understands it, the March 1 deadline has been adhered to. The law that says the State Department of Revenue shall furnish the Department of Education data by school district has been adhered, to. I'll repeat that. Read the section of law that says they shall have data by school district. If you've had a chance to look at the numbers, that data is by school district so the law has been met. The law has been met both on a time line and what is Supposed to happen. What happens now is the State Department of Education will take that data, plug it into our state aid formula and make any adjustments necessary. Well, at this point in time I guess I would actually, I should be not talking about a bracket and talk about actually killing the bill because, in my opinion, the law has been met by the delivery of those numbers by school district and so it can be done, not only can it be done, it has been done and is now in our hands. But the fact remains that none of us know, shall I say the doability of those numbers and standing up to court challenges, changing state aid and so on. And so I think it's important that we take a time-out, so to speak, have an opportunity to have the leaders of the Legislature of this issue or the entire body to have a chance to sit down with the administration and the Department of Revenue and the Department of Education, look at these numbers, have the experts in the field in both those departments tell us whether or not this data is good, whether or not this data is defendable, and more importantly what I want to know is does the administration in

9478

the Department of Revenue and the Department of Education feel that there is a need for a delay. Now if those two departments feel there is a need for a delay, I guess I am, myself, am warm to doing that though I would certainly be less than frank if I would not mention that I would like to know why we didn't get the right data, but that's beside the point. That's hindsight 20-20. If the data we have is. not good enough, the prudent thing to do for this Legislature, in my opinion, would be to delay. But the fact is we've got the data. The fact is, it is by school district. The fact is at this point in time none of the experts, so to speak, have ever stated any reason why there should be a delay or for that matter stated any reason or any request is on our table for money to do the job better next year. So given all that, in some ways we ought to just kill LB 1290 if you're doing right here today, but I think it's important that we wait to have a conversation, and after that conversation, I think at that point in time this Legislature then finally has all the necessary ammunition to make a prudent educated decision. But to make a decision on this bill this morning and advance it, I would think it would be a grave mistake. And I guess I would certainly vote no on advancing this bill today and would encourage other members to do the same. I think we can get beyond that by bracketing the bill, meeting with the Department of Revenue and then later this week having an intelligent, enlightened discussion on this matter. but trying to have a discussion today would not be intelligent or enlightened. It would just be on gut instincts of what somebody that may or may not win or lose may think. That's nott a good way to make policy. A good way for this body to make policy, make decisions, is to look at the data, see if it works, if it does work go ahead, if it doesn't work, stand up and say we screwed up, somebody screwed up and let's delay it for a year. We can't make that decision Monday morning. Hopefully, we can make it later in the week. With that I'd ask for a bracket motion and deal with this bill as quietly-as possible this morning so we can have a good debate later on this week.

SENATOR CROSBY PRESIDING

SENATOR CROSBY: Thank you, Senator Moore. For discussion on the bracket motion of LB 1290, Senator Wickersham.

SENATOR WICKERSHAM: Thank you, Madam President. I'm having a little bit of a sense of deja vu here except it's a couple days later and the bracket motion is only one day additional delay.

9479

I really thought we'd discuss the issue of whether or not this debate on this bill should be delayed last week and I still think very little has changed from last week. It doesn't seem to me to make a hill of beans worth of difference whether the bill is bracketed or not because it will not become effective before we get final numbers, and if those folks who are interested in the numbers, that's just fine, you'll have them way before we get to Final Reading on this bill. You'll probably have them way before we got to Select File on this bill so it just doesn't seem to me to make much difference and I'm... I guess I'm not totally opposed to bracketing to March 2nd, but if the bracket motion is simply put up there as an opportunity to talk about the bill, I guess we can do that and the amendment that is really pending and is really t he substantive matter that is before us this morning, not in my opinion, the bracket bill, or the bracket motion. I do think that the numbers that were delivered to us on Friday are interesting. There are no printouts in case you're all wondering about that. There are no printouts yet. Those printouts will be available in a day or so and those of you w ho are vitally interested in those will have a chance to see them. The Department of Education is working on it as we speak, but as we talked about this last week and as I think I heard Senator Moore saying just briefly this morning, it really isn't the best thing in the world to try to make policy by what he says is the down and right method, look to see whether your district wins or loses. That is not what we're here, necessarily, to do in this instance, and if we wait until March 2nd and hopefully then I guess the Department of Education would have a printout and all of us could look down and right and see what we thought happened in our districts, although I think when you get the numbers from the Department of Education it's going to be with several caveats and I don't think you're going to find those particularly useful numbers either. At least that is my suspicion. At any rate, there is an amendment pending which, I think in all circumstances, whether or not we would delay implementation of the adjustment factors from the Department of Revenue that is important to pass, puts in place certain processes that give validity to the work that the Department of Revenue is going to do, adds clarity to the statutes and provides for an appeal process and also, hopefully, provides for a process that will mitigate the impacts of litigation should anybody wish to litigate whatever the numbers from t he Department of Revenue are. So I think the bill, if we amend it as proposed in the amendment presented by myself and Senator

9480

Warner, is vital, there is no reason to hold up progress on the bill or that amendment.

SENATOR CROSBY: Thank you, Senator Wickersham. Senator Warner, for discussion on the bracket motion.

SENATOR WARNER: Madam President, members of the Legislature, at this point, at least, I think we ought to proceed with the Wickersham amendment. If there is anything, as I was listening to the comments before, if there is anything that today demonstrates is the need for the Wickersham amendment, the fact that there would be a hearing process established prior to the time that the Department of Revenue numbers are sent to the Department of Education to be processed by school district by school district as far as the amount of state aid. Now you should understand, and Senator Wickersham already indicated that, that when you get that, that still will not be the precise number for the simple reason that there are other factors that go into the distribution of state aid, such as the current pupil count in a school district, whether or not a particular school district has additional aid because of exceptional growth. A number of those factors are not available at this point so that it would not be an absolute number no matter what as to the amount of funds that each school district might receive. They would have to use last year's student numbers in order to have a firm number so you would still be applying two different years, that is you'd be using this year's valuation applied to last year's distribution which would give you an indication. I would certainly not disagree with that but it does not give you an absolute number in any event. Secondly, there is no, though the process is that Revenue sends these numbers over to Education which, at least mine was on my desk Friday evening and I assume Education did not receive it any sooner than that, so it will be a couple days before you'll have those numbers. The one significant change from what was done last year that is included here, excuse me, last fall, summer, and in here is that the numbers that were ran last summer essentially we took ag land when they made -that when agricultural valuations were just plugged in as what they were at that time and for the reason that we were using a base year when all these changes were made in the method of valuing ag land and there was really no good way, based on the numbers that we had then at least, to make that adjustment. At least that was my understanding. This numbers do show changes for ag land valuation which would have, again, some impact in the distribution. But the fundamental

9481

flaw that exists in the current system is still the one that we argued last week, that these valuations while they show valuations school district by school district, it, nevertheless, is based on a countywide sales assessment ratio for a particular class of property and it was very clear when you look at some of the past numbers on equalization of values that there are areas within given counties in which a particular class of property may be valued or the sales assessment ratio may be higher or lower than the county average and they are in different school districts, and these numbers, because that kind of data as I understand was not available....

SENATOR CROSBY: One minute.

SENATOR WARNER: ... would not reflect that. Finally, I spoke briefly with Senator Bohlke. I would assume it would be appropriate for the Revenue Committee, which it certainly deals with the issue of equalization, and the Education Committee, which deals with, generally with state aid, at some point to have a joint hearing where the Department of Revenue would come in and outline the plus and minuses of the particular data that is here, but I would urge that we go ahead and adopt the Wickersham amendment which, is pending because that is good policy, in my opinion, and certainly, if anything, the need for that kind of a process as demonstrated since Friday and we ought to go ahead and adopt, discuss that amendment and adopt it because that policy...

SENATOR CROSBY: Tine.

SENATOR WARNER: ... in place.

SENATOR CROSBY: Time.

SENATOR WARNER: ... has nothing to do with numbers if that's your concern.

SENATOR CROSBY: Thank you, Senator Warner. Senator Withem, on the bracket motion.

SENATOR WITHEM: Yes, Madam President, members of the body, I support the bracket motion. I will vote for it although, you know, at this point bracketing, I don't know, I think I'm ready to make the policy decision on LB 1290 as to whether a delay is warranted and I would indicate that I do not believe there is a

9482

delay warranted at all. So I will be voting in favor of the bracket motion because I think it may give us' a better opportunity to understand if there was any flaw in the mechanism used by the department to calculate the numbers that we now have available to us. Keep in mind LB 1290 is a bill that says let's delay implementation of this because what they've already done on Friday they can't do and they have proven to us that they can do it, so I think we're at the point where we could actually let LB 1290 either be bracketed or not advanced or whatever it's fate needs to be and move forward with the process. T he Wickersham amendment I think probably is good policy improvement, but it's not essential. I don't think we can make the argument once the Wickersham amendment is adopted, and I will vote to adopt the Wickersham amendment, that 1290 suddenly becomes a critically important bill because it really writes into statute what the full intent of the Legislature was anyway in terms of what numbers they are supposed to use. It does provide a process but we can add that process to any other education piece of legislation as time goes on so I don't think that is needed. I guess the one thing I would like to point out to members of the body that I know there are numbers circulating and I don't know who provided them. A senator showed them to me this morning and said that 'shows X million dollars, Lincoln Public Schools, half a million dollars, Papillion- LaVista Schools, Fremont, a quarter of a million dollars, and I don 't remember what the other ones were. At this point I don't know of any basis in fact for those numbers because I know that t he numbers showing Vie adjustment by school district only came out, the official ones only came out on Friday. I also know and I think maybe Senator Bohlke will confirm this, that t he individual who does the... that plugs these in wasn't even in town over the weekend, so I know there are no accurate numbers out based on what we got on Friday, that they are fabrications based on what was put out as potentially what would happen based on the numbers that were available last fall just to show how the process would work. Those are fabrications at 'this point because, as I think Senator Wickersham I believe is the one that pointed out, maybe Senator Warner, that at that time they didn't have any methodology developed for adjusting for agriculture land. These numbers do have agriculture land adjusted. Obviously, if you take, assume that agriculture was perfect and you adjust everything else upward, you're going to see a pretty, significant shift of dollars out of the urban area into t he rural area. These numbers have some adjustment within the ag sector, so you're going to see I think far, far less significant

9483

shifts than you may have had before. I know what Senator Warner wants to do with this has the highest motivation. He wants to make sure that the process is correct, it's done correctly. My assertion is that we're never going to have it done perfectly and particularly if we continue to delay, delay, delay.' delay, you're never going to get it done well. We have as much data available to us, maybe more so...

SENATOR CROSBY: One minute.

SENATOR WITHEM: ... than the State of Kansas did when they started their process. The State of Kansas took what they had and they started and because they, the politicians down there knew it was serious, they will continue to refine their process year after year. If we continue to delay, this would be the third delay of this process; if we were to pass LB 1290, we'd be sending the signal that we're not serious and I don't know as there would be anything done at the department to enhance their ability to comply with this statute. For that reason I'm going to be supporting the bracket motion.

SENATOR CROSBY: Thank you, Senator Withem. Senator Jones, on the bracket motion.

SENATOR JONES: Yes, Madam Chairman and members of the body, I stand in support of the bracket motion because I don't know if these figures are true or what they all concern. I haven't even had a chance to look at them. They were just handed to me about five minutes ago. I didn't get them on Friday, so I'd sure like to have a chance to look at them and see what they do. Thank you.

SENATOR CROSBY: Thank you, Senator Jones. Senator Warner, on the bracket motion.

SENATOR WARNER: Madam President, again, I just wanted to repeat, what numbers you have, these are the numbers that are sent by the Department of Education. You still don't know any more about what will happen to a particular school district because this... and there's nothing wrong with that, that just simply is the process. But the point is that whether or not these are done correctly, I believe it is a fact that these are using countywide valuations by class of property, that is sales assessment ratios and the other factors that are used to adjust valuations on a countywide basis and not on a school district

9484

basis. You have the results shown to you by school district but it does not differentiate between the values of property countywide regardless of a number of... to match different school districts which may well be the case and I know very well that there are towns that have, the reason I know about towns, I know of some residential values, and I was trying to find it in my file here quickly, but at least one county that we happen to use as a sample, it was Dawson County, and there were a different level of assessed valuation on residential property compared to Lexington, and I believe it's Overton, if I remember correctly, was the other community which the smaller town having significantly higher assessed valuation in the county, and when you apply that countywide figure to that particular school district you actually inflate the value. It retains the same disparity that was there to start with, applying that uniform adjustment to all school districts and so it just simply doesn't make any sense to me to do that, and if there is anything that is ripe for a lawsuit, I would guess that is because it would not be very difficult to show that a countywide sales assessment ratio is not the same in every school district. The numbers show it now and the statute is very plain. The statute says school district by school district so the ... you know, if you all want to run the chance of blocking state aid from being distributed, that's fine with me. I'll be on the side that I won't get the blame for it, but I think it's a serious mistake to not to proceed with the process and particularly the adoption of the Wickersham amendment. After that is discussed and adopted or not adopted, then we can maybe argue again about holding the bill a day or two.

SENATOR CROSBY: Thank you, Senator Warner. On the bracket motion, Senator Monen.

SENATOR MONEN: Madam, President, I rise in opposition to the bracket motion and I should start out I guess with a confession. I think the figures that Senator Withem was referring to are those that appeared on a piece of paper that I circulated and I think I maybe committed some breach of etiquette in not initialing the upper right-hand corner and identifying myself as the person who circulated the numbers, so I plead guilty to that. The numbers are not a fabrication. They are figures, they are produced from figures that accompanied a memo from the Nebraska Department of Revenue to the Department of Education on October 18, 1993, in which the Department of Revenue said that the use of these totals for recalculation of state aid would be

9485

inappropriate and I have now since heard that these figures that we were presented with Friday evening were kind of a rehash of those figures that were prepared in October. I'm not sure whether that's true or not. I make no representation in that regard, but I say let's move it forward, let's move the bill with the Wickersham amendment forward and there will be time later to determine whether or not the figures are correct. Thank you.

SENATOR CROSBY: Thank you, Senator Monen. Senator McKenzie, on the bracket motion.

SENATOR McKENZIE: Thank you, Madam President and members of the body. I advanced, voted to advance this bill out of committee and still believe, in fact, that we need to take the extra year to look at whether or not we're going to do this correctly. Senator Bohlke and I just returned last night from meetings about school finance with members from other states, some such as Texas who are in their fourth round of litigation. Rhode Island whose courts Thursday threw out their system of school finance based on equity issues and they are, by most standard s, the most equalized state in the nation with the softest constitutional requirement. *So I stand to support the bracket motion this morning. I spent some time last night looking through the numbers and I have far too many questions about how these numbers were generated and what these numbers mean. if you haven't had a chance to look at the counties that are most impacted, I can tell you they are Cherry, Dawson, Holt, McPherson, Lincoln, Washington, Rock, Grant, and if those a re districts, you have districts in those counties, I really do believe you should at least take until Wednesday to look at t he changes in valuation in those districts. I don't think postponing it till Wednesday is putting the bill off, is refusing to deal with the issue. I certainly think in light of the tendency to litigate that we would be wise to consider what these numbers mean and ask the questions, allow Tim Kemper and the school finance people to look at the numbers and to be able to answer some questions for us before we vote to advance the bill. With that I would encourage you to support the bracket motion.

SENATOR CROSBY: Thank you, Senator McKenzie. Senator Wickersham, on the bracket motion.

SENATOR WICKERSHAM: Thank you, Madam President. Presumably,

9486

one of the prospects or one of the rationales for bracketing the bill is to allow us to digest and make the point that the Department of Revenue either couldn't, wouldn't, didn't, whatever phrase you want to use, comply with the law. Now that we have numbers from the Department of Revenue, I think that point is abundantly clear. That point has been made and I think we may as well move on, that point is made. The only real question now is do we have anything that' can be used despite what is apparently not a full compliance with the law, at least from the standpoint that the numbers that we have appear to be based on countywide sales assessment ratios and not sales assessment ratios for individual school districts. Points made, points accepted, let's get on with business. I do disagree with Senator Withem from the standpoint that I believe the amendment that I am offering is essential, at least in one respect, and that is, if you'll look in your Journal, it's on page 824, it would be lines 24 through 26 of the amendment. It says no injunction shall be granted restraining the distribution of state aid based upon the adjusted valuations pursuant to this section. If none of the other provisions in that amendment were adopted, that one should be. We run some risk that if a school district or a patron is dissatisfied with the numbers that we now have from the Department of Revenue and the resulting calculation of state aid by the Department of Education, once they have the rest of the numbers that are necessary to make the calculations, that there will be a lawsuit and each of you should evaluate for yourself whether or not they would be able to ask for an injunction and obtain that injunction withholding the distribution of all state aid to all schools across the State of Nebraska. Now, Senator Moore, you want to bracket this to March 2nd, I can't say as I care really a whole lot about whether it's March 2nd or today, but I do think the amendment is necessary to be adopted so we have the bill in a form for future debate. If you would agree to withdraw your bracket motion so that we could address the amendment and adopt the amendment and then renew the debate on the bracket motion, at that point I don't think I'd oppose the bracket motion because I know that there is going to be now some burning desire to wait for those numbers and I guess we may as well wait. But I think the bill ought to be in the form that it would be after my amendment is adopted because that is the basis on which I think this issue should be debated. It is not sufficient to debate the issue on the basis of the bill as it currently stands. It does need t he amendment for the future debate.

9487

SENATOR CROSBY: Thank you, Senator Wickersham. Before going to the next speaker, I would like to call the Legislature's attention to the south balcony where we have a group of 50 high school foreign exchange students and their sponsors representing EF Foundation for Foreign Study, 14 different countries and communities across Nebraska as far away as Chappell and as near as right here in the Lincoln area and Karen Carlson of US West is with them and has brought them to us today. Would you all please stand and let the Nebraska Legislature welcome you. Thank you for being with us. Senator Withem, on the bracket motion.

SENATOR WITHEM: Call the question.

SENATOR CROSBY: The question has been called. Do I see five hands? I do. The question then is whether debate shall cease. All in favor vote aye, opposed no. Record, Mr. Clerk.

CLERK: 25 ayes, 0 nays to cease debate, Madam President.

SENATOR CROSBY: Debate has ceased. Senator Moore, would you like to close on your bracket?

SENATOR MOORE: Madam President and members, I filed the bracket motion this morning because not only my instincts, but everything about me said it's kind of hard to debate a bill when you have no idea what it does or why you shouldn't be doing it. I guess I'm a firm believer that it's proper to have some sort of enlightenment on what actually the numbers are before we move forward on debate. Obviously, the supporters of LB 1290, for whatever reason, do not want that-, to happen. We don't know whether or not the numbers are good, we don't know what they do, but we need to delay. We don't know if they work, we need to delay. I guess you made a believer out of me. Let's adopt Senator Wickersham's amendment and then let's keep this bill from advancing. I guess the only way to make it clear, this body is willing to take a tough stand that we're going to equalize, that we passed about four years ago that we're now going to stand behind. My preference is to bracket the bill and wait awhile to do that, but I guess the introducers leave me no choice but to oppose advancement of the bill. That's the only way to make it clear to everybody in the state that we're dead serious, that when you're distributing $370 million it's important that the whole underpinnings of that distribution formula, the property tax value, is done uniformly across the

9488

state. Now two days from now, two weeks from now, I, myself, may vote for a delay. I cannot make an educated decision on that until I know what we have and how it works. But, nevertheless, since I don't know that today, I'll grant Senator Wickersham his motion, it makes sense, let's adopt it and then I'm going to rise very vigorously to oppose advancement of the bill. I think a bracket motion is a much wiser way to move ahead but the introducers, for whatever reason, simply want to delay come high water or whatever it may be. So with that I withdraw the bracket motion and strongly urge the body to adopt Senator Wickersham's motion and then vote against the advancement of 1290, and after it fails to advance, then everybody can then have a serious discussion of what we have', what we got, how it works.

SENATOR CROSBY: BY: Thank you, Senator Moore. The bracket motion is withdrawn. Mr. Clerk.

CLERK: Madam President, Senator Wickersham and Warner's amendment is found on page 823 of the Legislative Journal.

SENATOR CROSBY: Senator Wickersham, would you like to open on your amendment?

SENATOR WICKERSHAM: Yes, thank you, Madam President. We had a fairly good discussion initially on the amendment last Wednesday, but, members, it is on 823 and 824 of the Journal and just to refresh your memories briefly, it deals with the process of producing the adjusted valuations in a couple of different areas, first, in the area of the assessment practices that are to be used by the Department of Revenue to produce the adjusted values. The current law says it's to be based on the best assessment practices available. The amendment would say that the Department of Revenue would establish the assessment practices to be used by rule and regulation and then includes the current appraisal techniques that are available to them for all real estate in the State of Nebraska. Secondly, it defines what state aid value is, says it's for agricultural, it's the value determined in the statutes for all other lands, it's the values determined by statute as it would be for any other purpose, for motor vehicles. Again, it's the value used for all other purposes, and for personal property other than motor vehicles, again, net book value, the value that is used for all other purposes. The third part of the amendment provides an appeal process so that persons who are dissatisfied with the

9489

values promulgated by the Department of Revenue can file objections within 30 days. That's a school district can file those objections. And then, fourth, the part that was noted earlier, a limitation on remedies, if a school district feels that the valuations produced by the Department of Revenue are not valid and that is the prohibition against an injunction, an effort to withhold the distribution of all state aid while disputes over the adjusted valuations are resolved. Those are the salient portions of the amendment. I believe that they clarify the process in several ways and make the process one that when we do begin to use values promulgated by the Department of Revenue for, exclusively for state aid calculations, that we'll have a process that will work. With that I would simply urge the adoption of the amendment.

SENATOR CROSBY: Thank you, Senator Wickersham. Senator Robinson, would you like to... Senator Robinson waives off. Senator Withem, your light is on next.

SENATOR WITHEM: Yes, Madam President, members of 'the body, I'm going to support the Wickersham amendment, but I guess I want to make sure that in doing so I'm not telling people that I think it's absolutely essential 'and critical. I think it's good policy. If 1290 ends up passing, it would be a good idea to make this clarification. I will not, however, support 1290 and I don't think the adoption of the Wickersham amendment makes 1290 suddenly a good piece of legislation. Having endorsed the Wickersham amendment on this bill, if 1290 fails, I'd support putting it on some other measure that deals with the education statutes. A couple of things I'd like to point out, I just got a little bit of information here. Senator Wickersham is, and one of my favorite new terms, Senator Wickersham, is red herring, and you know the concept of a dog on a trail going down the road and somebody dragging, literally dragging this fish across the trail so the dog will quit following what it's supposed to- be tracking and instead follow a false trail, and this lawsuit that is going to take place if we don't do this, this lawsuit that is going to cause all state aid to education to be not distributed because the numbers are inappropriate, and that's what Senator Wickersham is now on the thirty-first or the thirty-second day of the Legislature riding forth to correct, again, there was no need to introduce legislation to do this. This has been in the statutes for four years now and only now do we need to have this particular measure advance. Millard Public Schools is one, for instance, it gets about $32 million worth of

9490

state aid. Millard Public Schools is going to come forward and demand that that $32 million not be distributed? Lincoln Public Schools I think gets around $33 million worth of state aid. Are they going to come forward and say let's not distribute this money because there may be some problems with the adjustment factors? I seriously doubt it. I seriously doubt if they are going to then go back to their people and indicate we're going to have to lay off teachers, we're going to have to raise the property tax levy, whatever, we're going to have to borrow money because we filed a lawsuit to keep the -state from giving us $32 million. I don't think that's going to happen but I do think what Senator Wickersham is suggesting here is a good improvement to the process. It really in many ways codifies legislative intent so I think we ought to go ahead and support his motion, go ahead and not advance LB 1290 and then what we ought to do is find another home for the Wickersham concept because I think it probably does clarify the statutes beyond what they currently state. So I'll be voting for the Wickersham amendment, but don't confuse that with then overall support for 1290 because I do not support 1290.

SENATOR CROSBY: Thank you, Senator Withem. Senator Hartnett.

SENATOR HARTNETT: Madam President and members of the body, could I ask Senator Wickersham or Senator Warner, as I remember from my time on the school board we used to depend upon the county to give us assessed valuation numbers and yours doesn't even talk about the county. Should the county be in this process some way, because you're saying when it comes to the state and then they protest, when is that done? I guess can you kind of explain the sequence that we go through with the, you know, assessment at the county level and then at the state level?

SENATOR CROSBY: Senator Wickersham.

SENATOR WICKERSHAM: Thank you. Well, essentially what happens, Senator Hartnett, is that you may have two sets of values, one used for local tax purposes and that would be assessed valuation, and in that process, there is a notice sent out in the spring, you have an opportunity to protest if your property values are going up, hardly anybody protests if they're going down but I guess you could protest that if you wanted to, but you have an opportunity to protest if your values are going up. There is a County Board of Equalization hearing. Then the

9491

county board meets,. finally sets values and then there is a review of those values by the State Board of Equalization. Dissatisfied persons in that process can appeal through the district court, ultimately then to the Nebraska Supreme Court. The process that would be in place for equalization aid, however, is different, and as you noted, under the current law there isn't any real process to address, at least in my view, the adjustment factors produced by the Department of Revenue which produce values to be used only. for state aid, not for local assessment practices.

SENATOR HARTNETT: Thank you.

SENATOR CROSBY: Thank you, Senator Hartnett. Any further discussion on Senator Wickersham's amendment to LB 1290? Seeing none, Senator Wickersham, would you like to close?

SENATOR WICKERSHAM: Just briefly, Madam President, I do hope that the body will adopt the amendment. I do want to respond just briefly to one thing that Senator Withem said, whether it's a red herring or not. I do suppose that Millard or perhaps some of the other districts that receive substantial state aid would not bring an action to halt distribution of state aid, but there are school districts in the State of Nebraska who do not receive state aid, therefore, they would have nothing to lose and potentially everything to gain if the numbers were adjusted so that relative to the rest of the state their valuations went down and everyone else's went up. So there are schools, whether or not they'd wish to devote the financial resources, I can't say, but there would certainly be no other impediment to bringing an action, in fact, everything to gain. Thank you.

SENATOR CROSBY: Thank you, Senator Wickersham. You've heard the closing. The question is the adoption of Senator Wickersham's amendment to LB 1290. Those in favor vote aye, opposed no. Record, Mr. Clerk.

CLERK: 29 ayes, 1 nay, Madam President., on the adoption of Senator Wickersham and Warner's amendment.

SENATOR CROSBY: The amendment is adopted. Anything... there's nothing further on the bill?

CLERK: Nothing further on the bill, Madam President.

9492

SENATOR CROSBY: Thank you. Before going to the... Senator Warner, just give me one minute to introduce some people in the balcony and then I'll let you talk. We do have, as guests in the south balcony this morning, 34 second graders from Everett Elementary in Lincoln, Nebraska with their teacher Pam Sullivan. Would you all stand up and let your Legislature welcome you, please. Thank you for being with us this morning. Senator Warner, on LB 1290.

SENATOR WARNER: Madam President, members of the Legislature, I'd ask unanimous consent to bracket the bill till March 2nd.

SENATOR CROSBY: A unanimous consent request for... to bracket LB 1290 till March 2nd. Are there any objections? Seeing none, the motion is adopted, the bill is bracketed until March 2nd. The next bill on the agenda is LB 1337. Mr. Clerk, do you have things for the record?

9493