Debate Transcripts

LB 613 (1995)

General File

May 9, 1995


... notice.  And, yes, is it fair to look at the number of times of publications and the manner of publications?  Absolutely it is.  That debate will continue.  But I got to tell you that the question that you're faced with now is we've got a system and Senator Avery, I believe, mischaracterizes the mandate.  You could do away with publication and these rates and open it up to the market and what would happen is they would probably go to their classified rates, which means that people would ultimately pay more.  And if you cut down the...  and, Senator Chambers, you're going to find this as well, you cut down the numbers and they'll want to change the manner of compensation.  Open it up to that free market that you were talking about and ultimately people may pay more.  Legitimate discussion, legitimate discussion, but not the one on 418.  And if you're going to have those newspapers do those things, you need to fairly compensate them.  And when you do it every six years it's not unfair to phase it in over a two-year period and, again, this is...this is making an increase, there's no doubt about it, but it's not a mandate.  In fact, it's probably a protection for the citizenry because it ultimately would protect them from paying more and I certainly would urge the adoption of...  and the advancement of LB 418 today and thank you to the General Affairs Committee for their patience and hard work and Senator Maurstad for working out a compromise and trying to put that together and appears to have successfully done so.  I would ask for a record vote, Mr. Speaker, and urge the advancement of LB 418.


SPEAKER WITHEM:  Yeah, I'm sorry, it's too late for you to ask for a record vote.  Senator Avery already did so I'm going to grant his request.  Question before the body is, shall LB 418 be advanced?  All those in favor vote aye, opposed vote nay.  A record vote has been requested.  Have you all voted?  Record, Mr. Clerk.  Record vote had been requested.


CLERK:  (Record vote read.  See page 2047 of the Legislative Journal.) 27 ayes, 6 nays on the advancement, Mr. President.


SPEAKER WITHEM:  LB 418 is advanced.  Mr. Clerk, next bill, LB 613.


CLERK:  LB 613, Mr. President, a bill.  originally introduced primarily by Senator McKenzie.  (Read title.) Bill was introduced on January 18, referred to the Revenue Committee, bill was advanced to General File.  There are committee amendments pending by the Revenue Committee, Mr. President.




May 9, 1995 -- LB 208, 613


(Standing Committee amendment AM0885 is found on page 1081-84 of the Legislative Journal.)


SPEAKER WITHEM:  Senator Warner on the committees amendments.


SENATOR WARNER:  Mr. President, members of the Legislature, the ...  LB 613 is, as the body's aware, is the bill which modifies the budget limitations that are in, the statutes as well as continuing one that affects the governmental subdivisions other than schools so it is put as a permanent provision of the statute rather than be repealed July I of 1995.  The committee amendments, however, address just to...  actually three areas, but two areas of substance.  One of the provisions of the ...  of the bill was to repeal the authority for unused school budget authority to carry over and there was a repealer section.  That is removed from the bill so that that unused budget authority would continue to be authorized by statute.  And the second one was that it struck from the bill the provision or I should say the other way ...  the other way around.  It strikes the provision in the bill so that school boards may continue to increase expenditures one percent over what the otherwise allowable limit is with the ...  with -.;he one percent vote and, thirdly, there is an error in the bill drafting where four was...  should have been changed to three to be consistent with the balance of the bill, but that is only technical.  But the two substantive amendments then would be authorization to continue to use unused budget authority and the second is to continue the authorization for a school board to increase their expenditures one percent over the otherwise allowable limits by a three-quarters vote.  I move the adoption of the amendments.


SPEAKER WITHEM:  Thank you, Senator Warner.  Mr. Clerk.


CLERK:  Mr. President, the first amendment to the committee amendment is by Senator Robak found on page 1441 of the Journal.


SPEAKER WITHEM:  Senator Robak.


SENATOR ROBAK:  Thank you, Madam...  Thank you, Mr. Speaker, members of the body.  This amendment is on page 1441 of the Journal and it was originally introduced as LB 208.  This amendment reduces from 3 percent'.  to 2 percent the fee collected by the Department of Revenue for administering the local option sales and use tax.  As you know, 'the state has its share of the sales tax, which is 5 percent.  They then take a portion as an




May 9, 1995 -- LB 613


administrative fee from those cities which have implemented the local option sales tax.  This amount is levied locally and should be retained locally.  There's a handout on your desks that lists some of the unfunded mandates that:  my home city of Columbus is dealing with, and I realize that some of these are federal.  One fact remains the same--the local subdivisions have no money to carry out the requirements of these mandates.  In fact, one of my constituent communities have had a 779 percent increase in the cost of mandated water testing between 1985 and 1992.  1 can repeat that.  That was a 779 percent increase in the cost of mandated water testing between 1985 and 1992.  In reviewing the testimony on LB 613, unfunded mandates came through again and again.  We have to stop telling local groups what they have to do without funding for the same.  The sunset on the property taxes was due to expire July 1st, however, this bill today eliminates the sunset.  My amendment is a simple attempt to bring some relief to local governing boards.  After all, it is the people in these local cities that pay this sales tax so I believe It should go back to...  it should be go back ...  most of it should go back to them.  The fiscal note on this amendment estimates that the municipalities would see an increase of 1,147,000 dollars in fiscal year 1995-96 and more for the following year.  That's a little bit something like community betterment I would think.  I'd really also be interested in the true cost to the state to administer this collection.  With that, Mr. Speaker, I'd just be happy to answer any questions and I urge the body to adopt this amendment.


SPEAKER WITHEM:  Thank you, Senator Robak.  Senator Warner, you had filed a notice up here.


SENATOR WARNER:  Yeah.  Mr. President, I would raise the...  I rise to raise the issue of germaneness of the proposed amendment which deals, as indicated, with the percentage that the state holds for the collection of the sales tax.  The bill, of course, deals solely with the permitted increases in local governments' budgets, as well as...  or property tax authorization of that budget and I do not believe the amendment would be germane to this particular bill.


SPEAKER WITHEM:  Senator Warner, thank you.  With the advance notice up here I did have an opportunity to look at:  the contents of the amendment and of the contents of the committee amendment, which ...  which become ...  upon adoption will become the bill.  It is another one of those gray areas, quite frankly.  It's one where




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a very broad interpretation of the germaneness rule would indicate that both of these measures, the underlying bill and the amendment, deals with money available to subdivisions for purposes of spending, but I don't think our rule is intended to have that broad an interpretation of germaneness.  I believe that the underlying bill talks about budget limitations on local subdivisions of government.  The amendment before us talks about the ability of the Department of Revenue to withhold a portion of the collection fee of local governments.  For that reason, it is my sense that the amendment is not germane.  Senator Robak, for what purpose?


SENATOR ROBAK:  I ...  I would like to overrule the Chair.


SPEAKER WITHEM:  Okay.  Senator Robak has made a motion, as I understand it, to overrule the decision of.  the Chair as it relates to the germaneness of her amendment.  Our rules allow this is a debatable motion.  Senator Robak, I would introduce you to open on your motion to overrule to give an explanation...




SPEAKER WITHEM:  ...  as to the germaneness of the amendment and that it is debatable.  Each member would have the ability to speak one time and one time only.  Senator Robak.


SENATOR ROBAK:  Thank you, Mr. Speaker.  I believe this is germane because it is a revenue taxation bill and it's in the same section of law and it...  it ...  therefore, I think it's germane simply because it is a revenue taxation.


SPEAKER WITHEM:  Thank you, Senator Robak.  Senator McKenzie to speak on the question of germaneness.  Senator Bernard-Stevens to speak on the question of germaneness.


SENATOR BERNARD-STEVENS:  Thank you, Mr. Speaker, members of the body.  I rise to support the Chair's decision and to oppose the motion to overrule the Chair.  It's kind of one of those things where if it's talked about in a book it might be germane 'and Senator Robak is, I understand, I've used the argument before and traditionally when I've used the argument, Senator Robak, I've lost badly on that same argument.  It may have the ...  be in the same chapter, but it certainly is not in the same section and what we're dealing with on LE 613 certainly are lids on political subdivisions, lids on schools, what the percentage of




those lids will be, what type of a majority vote should be to overrule that, and Senator Robak's bill we're talking about the collection of the tax imposed by any incorporated municipality.  Concurrently, collection of a state tax is the same manner which state tax 'is collected and we go to the Local Option Revenue Act, clearly nothing to do with 613.  1 understand Senator Robak's wanting to try to find a home for this, but this is simply not the home at this particular point and would urge the body to oppose the motion to override the Chair.


SPEAKER WITHEM:  Senator Warner on the motion to overrule the Chair.


SENATOR WARNER:  Well, just briefly, Mr. President, members of the Legislature, it appears to me that, as Senator Bernard-Stevens has already pointed out, as the Chair pointed out in his explanation on the issue of germaneness, it clearly is not germane under our rules and the issue is certainly one that has been discussed many times.  There was a bill introduced to that effect which was indefinitely postponed, but that is immaterial to the ruling.  I just believe the Chair is ruling correctly and I hope the body would sustain that ruling.


SPEAKER WITHEM:  There are no further lights on.  Senator Robak, you may close on your motion to overrule the chair.


SENATOR ROBAK:  Thank you, Mr. Speaker and members of the body.  I still would like to overrule the Chair because I feel that it is the revenue taxation issue.  It's a way that we can address some of the unfunded mandates.  This bill will impose a lid on certain political subdivisions and municipalities and with this bill it would, with my amendment to this bill, it would give the money back to the cities, give the money back to the people that are spending that money in those cities.  I would like to overrule the Chair.


SPEAKER WITHEM:  The question then before the body at this point is, shall the Chair be overruled?  The Chair had ruled on a question of germaneness.  Senator Robak is asking that that decision be overruled.  Mr. Clerk, may I ask the number of votes based on the number of absentees at the moment?  I understand it will take 20 votes for this motion to be successful.  All those in favor of overruling the Chair....  Senator Robak.


SENATOR ROBAK:  Call of the house, please.




May 9, 1995 -- LB 613


SPEAKER WITHEM:  Yeah, the question before the body now is, shall the house come under call?  All those in favor vote aye, opposed vote nay.  Record.


CLERK:  9 ayes, 1 nay to go tinder call.


SPEAKER WITHEM:  The house is under call.  Would all members please return to the floor.  Members in the Chamber please take your seat and record your presence.  Unauthorized parties leave the floor.  The house is under call.  Senator Jensen, could you check in, please.  Senator Maurstad, could you check in, please.  Senator Robinson, Senator Schellpeper, Senator Hall, Hartnett and Hillman, Senator Wehrbein, Senator Wickersham, Senator Landis.  Still looking for Senator Landis, Senator Chambers and Senator Hartnett.  Senator Robak?


SENATOR ROBAK:  Roll call vote.


SPEAKER WITHEM:  You certainly ...  you certainly can.  Who else are we looking for?  Senator Hartnett.  Senator Robak has authorized us to go ahead.  Based on the...  oh, Senator Hartnett is here.  Based on the number of senators that are now here, a successful motion will require 21 votes.  Mr. Clerk, call the roll.


CLERK:  (Roll call vote taken.  See page 2048 of the Legislative Journal.) 10 ayes, 18 nays on the motion to overrule the Chair.


SPEAKER WITHEM:  The Chair is not overruled.  Mr. Clerk.


CLERK:  Mr. President, in that case...


SPEAKER WITHEM:  The call is raised.


CLERK:  ...  the next amendment I have to the committee amendments is by Senator Withem.


SPEAKER WITHEM:  Excuse me one moment while Senator Crosby is going to take over the Chair and then...




CLERK:  Senator, I have an amendment printed with a note.  It was a floor amendment found on page 1821.  I have a note you




want to withdraw that one and offer ....  Well, just withdraw that one.  It's on page 1821, Senator.


SPEAKER WITHEM:  Correct, that's correct.


CLERK:  Madam President, Senator Withem would move to amend.  Senator, AM1819 is what I have in front of me.  (Senator Withem's AM1819 is found' on page 2049 of the Legislative Journal.)


SENATOR CROSBY:  Senator Withem.


SPEAKER WITHEM:  The amendment was one in the same.  Basically, what it does is it takes the school portion out of LB 613 and would leave the school lid in place as it is today.  I guess number one, you need to understand this does not remove school districts from having a budgetary limitation.  It is my intention, it was the intention of the authors of LB 1059 that the school districts would be under a budgetary limitation and that that would exist in perpetuity.  The committee amendments at this point and the bill, as introduced, would have taken the limits of allowable growth, is the jargon we use in the statute to refer to the lid on school districts, would have decreased that from its current 4 percent for average spending or high spending districts, up to 5.5 percent to low spending districts.  What the bill would currently do would allow ...  would lower that to a range of 3 to 4.5, 1 believe.  I believe those numbers are correct.  Senator McKenzie, is that correct?  Okay.  So what this ...  my amendment would do if it's successful would, it would leave in place the school limitation of a range of 4 percent to 5.5 percent.  I believe that probably is the correct policy for the Legislature to enact.  I will listen to the discussion on the bill to make a determination as to whether I think this is a ...  a measure that ought to go to a vote or not.  But I do want to take a little bit of an opportunity because this is one of the first times all session long that we've had an opportunity here on the floor to debate school finance.  The budget limitation in Section 79-338.14, et cetera, the other provisions of the law, were all part of a major rewrite of the school finance legislation that was enacted back in 1990.  It was certainly the most complex, controversial piece of legislation I'd ever been involved with and I think many of the members who were on the floor at that time felt...felt the same way, felt the same way.  Since that time, we've had a big turnover in the Legislature.  I think at this point, Marsha can nod yes or no if




I give the numbers, but I think out of the 32 senators that voted ultimately to override Governor Orr's veto of LB 1059 there were 32 senators who did and I believe there are 14 currently serving in the body.  Of those senators that voted no on it, which would have been about 17 senators, I believe there are only 6 of those senators left.  What we had when we passed LB 1059 was an attempt by those of is that supported it to have a living and a breathing document that would respond on an annual basis, if needed.  It was recognized to be an unfinished work.  It was recognized as one that would need annual looks at annual adjustments.  Because of that we put some provisions in the statute.  We established the School Finance Review Commission to make annual recommendations to us.  We provided a number of other things.  I would have to admit that as much as anybody else on the floor I'm probably to blame for the fact that it has not been a living, breathing document.  We've had a School Finance Review Committee that's been working.  We've had outside consultants.  I hope that doesn't get Senator Chambers up to the floor here when I use that terminology, but we did have outside consultants take a look at LB 1059 and whether it's working or it's not working.  They made a general conclusion that it was generally meeting the objectives we needed, but they suggested that we needed to ...  needed to take some...  some proactive actions to make sure though that it does not fall 1 behind in meeting the goals that were set out.  Let me get now then to what this amendment does and why I'm offering this amendment at this point and then I'll probably sit down and be quiet for awhile to see what comments other people may wish to make.  One of the things that this Legislature was supposed to do was, on an annual basis, on an annual basis we were supposed to look at this range of spending limitations.  We put the lid in LB 1059 to accomplish basically three purposes.  Number one, we had an immediate goal and that was everybody told us when we raised sales and income tax that the Legisla-that local schools would not use that money to lower property taxes.  They would simply spend that money on new programs.  We listened to that argument.  We said you're ...  you might be correct, for that reason we will put a spending limitation into the bill.  Secondly, the Legislature committed itself to trying to maintain 45 percent state funding and we said to those local school districts we can't do that.  If you have the entire prerogative to raise spending on your own to any level you may wish to, we cannot commit to a 45 percent funding level.  Therefore, we're going to put a budget limitation in place.  Let me comment on that 45 percent level.  We had assumed, as a Legislature, that




May 9, 1995 -- LB 613


we could maintain that spending for at least into the late 1990S based on the 1 cent sales tax and the 17 percent increase in income tax.  We based that assumption 'because we.,.  thought the lid that came out of the Education and Revenue Committee together would limit school spending to an aggregate 5 percent.  That's why we put a budgetary limitation.  The commit...  the floor of the Legislature expanded that ...  that ...  that budget limitation.  We expanded it later on to the point where school district spending has actually been, in the aggregate, 6.5 percent since LB 1059 passed.  You'll hear a lot of your local school districts complain to you because the Legislature has not maintained the 45 percent funding.  Part of that is because we have not kept the lid...  as tight a lid as we had anticipated so it is not ...  we have not maintained that 45 percent funding.  A final thing that we were wanting to do with the lid was LB 1059 was an equity equalization measure.  We wanted to bring school districts closer together in their per pupil spending.  The committee that created this originally said, I think it was 2.5 percent to 5.5 percent as the range.  The committee, before it even got to the Legislature, that made the recommendation cut off the lower half.  What we were going to say is school districts that now were spending above the statewide average would in fact be able to spend much less than those school districts that were way below.  We were trying to bring those together.  That was the rationalization for the lid.  I ...  one of the handouts I gave to yon, it says what the Legislature is supposed to do on an annual basis.  it says, and that's the one here that has the ...  just the sections of statute.  It says that the Legislature shall annually establish an allowable growth rate.  The Legislature shall set the basic allowable growth rates based on projections of available state revenue and the cost of living and cost of education from nationally accepted cost indexes which shall be provided by the Nebraska Economic Forecasting Advisory Board, the Legislative Fiscal Analyst, the Department of Revenue, and the State Department of Education.  Senator McKenzie or Senator Warner, you can respond to this on your own time if you would like, but I doubt if any of this data went into the creation of this bill.  My guess is it came from the Governor's Office and the Governor's Office was simply wanting to make a tighter lid all the way around and they recommended lowering it by one percent We, in the Legislature, are supposed to.  We haven't done this.  Yeah, I am as much responsible as anybody 'cause I was Chair of the Education Committee...




May 9, 1995 -- LB 613


SENATOR CROSBY:  One minute.


SPEAKER WITHEM:  ...during most of that time for us not doing it, but we haven't done it.  My argument is that, as to why this amendment is a good one, is that there I's an 'established mechanism for adjusting the school district's annual lid.  We have not gone through that mechanism and, therefore, what is in LB 1059 ...  in LB 613 is not appropriate.  I'd like to call your attention though, because I bashed the Legislature myself a little bit, I'd like to call your attention to what it says at the bottom, because the Governor has had some responsibilities and the Governor has been derelict in meeting those responsibilities.  Read what that says.  I'll discuss that next time I have an opportunity to speak.


SENATOR CROSBY:  Thank you, Senator Withem.  Before beginning the debate on the Withem amendment, I'd like to call the Legislature's attention to the fact that Senator Vrtiska has, as his guests today in the north balcony, 19 third graders from Tecumseh Elementary School and with them is their teacher.  Would you all please stand and be welcomed by your Legislature.  Thank you for being here.  Senator McKenzie on the Withem amendment.


SENATOR McKENZIE:  Thank you, Madam President and members of the body.  Senator Withem, I will address a couple of points that you ...  that you made, but first I wanted to start briefly with a little about the blue sheet that was handed out to talk about the difference between what was originally propose.  and what's in the committee amendments and, of course, Senator Withem's amendment to the amendments taking out any kind of lid for schools I think presents us with three different issues to argue at the same time.  But, basically, if you will look at the section under schools you will see that, in fact, schools have three different levels of lids.  They start with a zero percent spending lid.  In order to move above zero percent they have to have a supermajority vote of the governing body, so that 75 percent has to approve spending beyond zero.  After they've made that decision they're allowed then to spend at the allowable growth rate that the Department of Education establishes for them.  The majority of schools in Nebraska are at 4 percent.  There are only 54 out of the 707 school districts in Nebraska who chose to stay at zero percent.  All the rest have gone to allow the growth.  Now some school districts are at 6.5 percent, Senator Withem, I believe, said 5.5.  The top of the cap right




May 9, 1995 -- LB 613


now is 6.5.  Those were school districts who, when 1059 was passed, were in the category of schools with poor resources and high taxes and had been limited in their ability to create a good system.  They were given a higher spending lid to allow them to bring the quality of their education up to the standard that we are trying to set in the issue of equity.  The next lid then is another one percent that can be voted by ...  by the board using, again, a supermajority vote.  We have a number of districts in the state that choose to use that additional one percent, so if I use the example of a school district -who was at 6.5, they use their one percent supermajority they're spending at 7.5 percent.  Now the final, the final step in this is that if there is, in fact, a need or the board wants to spend more than whatever their allowable growth rate is plus one percent they can take that to a special election.  They can ask then for a vote of the people to spend more than that final limit.  The other issue I would bring up, just as we talk about the section about schools, is that schools, unlike counties and cities and other political subdivisions, have been given numerous exemptions from the lid.  It seems apropos, I guess, that it's also the other bill that I ...  we talk about that I'm carrying and we've had great discussion on and that's special education, special education is outside the lid.  Capital construction is outside the lid.  Decisions that require salary increases made by the Court of Industrial Relations is outside the lid.  Enrollment rapid growth allows for spending outside the lid.  Judgments by courts or settlement in lieu of court actions are outside the lid for schools, so are ADA projects and emergency spending because of some disasters.  So we already have allowed school districts many, many exemptions outside their spending lid than we do political subdivisions.  Political subdivisions, if I ...  if I recall, have exemptions for ADA projects-, asbestos abatement and then also some emergency spending required when there are, in fact, natural disasters.  I'd like to address senators...  Senator Withem's comment about none of this information in Section 79-3214...


SENATOR CROSBY:  One minute.


SENATOR McKENZIE:  ...  being included in the discussion and the drafting of LB 613.  Senator Withem, in fact, I did not draft 613, however, in discussion about the committee amendments, we did look at CPR rates to move the lid down.  When the lid originally went in place the cost of living was higher, at a higher ;ate with all other factors, inflation, than it is today.




May 9, 1995 -- LB 613


It's a little below 3 percent currently so asking school districts and political subdivisions to spend one percent less in their growth rate was based on looking at the overall factors of involving CPR, Consumer Price Indexing.  With that, I would also draw your attention, before I run out of time me and I'll hit my button again, to three sheets I just handed out that look at why we're spending beyond...




SENATOR McKENZIE:  ...  what was originally included in 1059 in the lid.  Thank you.


SENATOR CROSBY:  Thank you, Senator McKenzie.  Senator Bernard-Stevens on the Withem amendment.


SENATOR BERNARD-STEVENS:  Yeah, thank you, Senator Crosby, members of the body, and, Senator McKenzie, I think you were talking about the CPI, not the CPR, on the Consumer Price Index, but that's neither here nor there.  Senator McKenzie actually makes a very good case for the Withem amendment.  She talks about those things that are outside the lid for school districts that political subdivisions don't necessarily have.  ADA, that's a federal mandate, and I don't know how many people in the body would say that we'd like to have the education of our children, we'd like to have all of the dollars that go to the ADA taken out of the fund that we have to educate our children.  And we said, no, we don't want that to happen because we place a very high value on education, so we exempted that from the lid, not because we were giving them a break but because we didn't want those dollars that were mandated to be taken away out of our programs for the gifted and for some, of the other areas.  Special education is exempt and a lot of that is because of federal and state law, but I don't think anyone in the body here would say, you know, on the schools, the tremendous growth on special education, we think they...that should be included in their spending so that the monies will be taken out of all the other programs to fund special ed.  We didn't want to jeopardize the general education so we exempted that from the lid, and obviously counties don't have spacial education so that's not exempted from their lid, neither do cities.  Court of Industrial Relations, we know that about 80 percent or a very high percentage of the cost of school districts are based by the CIR out ...  totally out of their control, and we made a policy decision saying, look, since it's out of their control do we




May 9, 1995 -- LB 613


want to go ahead and have a very tight lid with this included and for them then to meet that lid requirement, to meet the CIR, they take funding out of the general education programs, and we said, as a body, no, we don't want to do that.  And capital construction speaks for itself as far as what the costs would be and what that would mean to any school district's budget that were included.  So Senator McKenzie rightfully points out all of the areas that are exempt that makes the lid a little more nebulous when we think of what an absolute lid would be, but she makes the point of why education has to be treated differently.  And one of the problems we have in trying to deal with lids is we're going to begin with 613 to blur our battles on property tax and policy and we're going to blur that proposal in with school finance.  And Senator Withem's amendment, and I hope he takes it to a vote and I hope it's voted for, Senator Withem's amendment simply says, look, we understand the lids on the property tax battles and we also understand that we, as a Legislature, and the executive branch have responsibilities and decisions we have to make on school funding and we ...  what Senator Withem's amendment does is take the school portion out and keeps it as it is now.  Now I think Senator Withem may have misspoke.  If his amendment is agreed to the range would be between 4 and 6.5 as it is now.  That would be the range on school districts.  We have a lot of problems on school finance that we're not going to be able to get to this session.  One of the things I think that would be very harmful to the whole discussion of school finance is to go ahead and, because we have a general policy question on lids and we want to lower lids on property tax, to go ahead and lower then the schools' lids to the, well, I think it's be 3.5 to 5 ...  3 to 5.5 or whatever the range would be under 613.  If you do that again you have to ask yourselves the key question.  Since all of these other things are exempt, what's going to go in education and is that the type of policy that we want right now?


SENATOR CROSBY:  One minute.


SENATOR BERNARD-STEVENS:  I think that what Senator Withem's proposed, and I'll talk about it a little bit later, is saying, look, we will keep school funding separate and then we, as a Legislature, have some tough decisions to make.  We're not following 1059 as we should.  We're not setting annually the growth rate.  We're not demanding that the Governor give us a proposal.  Excuse me.  Senator Withem's going to get to that if you people haven't read that'.  line so I'll save that one because




May 9, 1995 -- LB 613 LR 93


he was talking about the derelict Governor, I think, scenario at that point, so I'll let Senator Withem do that one.  But we need to separate the education portion because it's so tied into so many complicated factors that to include it with all of the other lids just in a general policy thing I think is going to bode us ill will when we get to solving those other education finance issues, which I'll talk about a little bit later.


SENATOR CROSBY:  Thank you, Senator Bernard-Stevens.  Senator Bohlke on the Withem amendment.


SENATOR BOHLKE:  Madam President, members, I thank Senator Withem for bringing the issue before as because, as he said, we really haven't had an opportunity except for a little bit on the Micron bill, I guess, to talk much about school finance.  And what he said is very true as far as the number of people here when they passed 1059 and that includes school administrators I think too, Senator Withem, you know, the phone calls that we get from school administrators saying I'm supposed to get 45 percent of my budget from the Legislature, which was never the intent.  So we do have a problem in discussing that.  What I think what Senator Withem's amendment does and the decision that we have to make is truly the whole issue that he brought up right now about the annual growth rate, how that recommendation was supposed to be brought to the Education Committee and to the Legislature.  That hasn't been done.  How the fact is when we were drawing up the Micron bill at first some people didn't realize what an impact that could have on the income tax rebate, but it is all very, very complicated and as we look this summer the Education Committee plans to focus on school finance, especially with LR 93 and the implications that could be there.  And I've said.  all along I've been trying to figure out how all the parts of this puzzle fit together.  If we do this and, at the same time, if we have the dollar cap and certainly the things that the schools have to...  are mandated that they have to deal with, but as we're talking About school finance, you know, we're looking at areas of transportation.  We're saying, all right, can we afford to fund transportation in the State of Nebraska?  What about collapsing the present tier system?  That's another issue.  What about introducing income into the formula?  That's another issue.  Because all of these are issues that we will be focusing on this summer and the dialog we'll be having with the Revenue Committee's hearings that they'll be going forward with, I think that a case can be made that we should set aside school finance.  When we do that though, and this is, I think, in the end the




May 9, 1995 -- LB 613 LR 93


decision we have to make, is it's going to be very difficult to go ahead, and say we...  one of the biggest reasons that the Revenue Committee or one of the reasons we have for LR 93 is that property tax is at a crisis situation in the State of Nebraska and when we talk about property tax we certainly recognize that about 60 percent of that usually goes to fund schools.  So it's difficult to explain why, on the one hand, we should be going forward and saying that we need -to respond to the crisis situation of property tax and then, on the other hand, saying but we want to set school finance aside.  When we understand the issues with school finance, I think Senator Withem makes a strong case as to why and I asked him and I think Senator Withem, he agreed, that, if we would adopt this amendment we need to look at some of the areas in 1059, certainly those that maybe have allowed school districts to go to that six and a quarter percent.  Senator Withem, would you agree that that would be an area, some of those areas that we would like to concentrate on?


SENATOR CROSBY:  Senator Withem.


SPEAKER WITHEM:  Yes, Senator Bohlke, as a matter of fact, as my thoughts are evolving on this, I'm beginning to wonder if maybe that wouldn't be a preferable approach to this particular amendment.  I want to hear more debate on it but maybe, rather than dealing with it through...


SENATOR CROSBY:  One minute.


SPEAKER WITHEM:  ...  this amendment, we'd be better off taking that more specific look between now and Select File on this particular bill.


SENATOR BOHLKE:  Thank you, Senator Withem, and that's what I had gone back to ask him, that...that this maybe is an opportunity to do that and so I will continue to listen to the debate, but I think that would be a more preferable direction.  That's what I'm thinking at this time, but until I have some more time to discuss that with Senator Withem I'll listen to the remainder of the debate.


SENATOR CROSBY:  Thank you, Senator Bohlke.  Senator Withem, your light is next.


SPEAKER WITHEM:  Yes, Madam President and members of the body,




I'd like to make a few points.  Point number one, Senator McKenzie characterized this amendment as removing any lid from school districts.  This amendment does not do that.  What this amendment does is it strikes the school portion from this bill which means the current statute will stay in effect and schools will continue to live under ...  under the lid.  One of the most misunderstood things about LB 1059 1 think is by among some people that supported it was that the lid in LB 1059 on school districts was meant to be a temporary lid.  Never was.  Never was meant to be temporary.  That was one of the first stare downs we did when we started making compromises to put 1059 together was that there would be a limitation on school districts in perpetuity.  One of the commitments we made was, on an annual basis, we would review that lid.  That we haven't done.  Would also like to point out though that before I'd ran out of time before, Senator Bernard-Stevens indicated I was going to make reference to the lower portion of this sheet, which I find very interesting that our Governor has riot done and this isn't one I can say, nor has any other Governor,' although that'd be an accurate state, there hasn't been any other Governor since LB 1059 has been in effect than our current one, indicates that the Governor shall, on an annual basis, provide data or the Governor shall prepare necessary legislation for appropriating 45 percent of the cost of public education for the ensuing school year.  The Governor shall, on an annual basis, estab ...  prepare legislation that establishes and implements a basic allowable growth rate and that's supposed to be the Governor shall.  The Governor shall submit such legislation along with any modifications made by the Governor as part of his or her annual budget request to the Legislature.  Governor hasn't done that.  Consequently and because of the inactivity of the Legislature and the inactivity of the Governor, we have ended up with 1059, which again was supposed to have been a breathing, living document, it's going stagnant.  A number of issues in that, it was supposed to promote equalization and we found each year since it passed we've moved further and further from the concept of equalization.  The first year in place was ...  was the high water mark in terms of equalization.  The tiers that we always have debates in the Rotunda and inside the Education Committee were supposed to have been, I think, just kind of an arbitrary way of starting out with how we characterize school districts.  Somehow those have been enshrined in statute and we can't touch those despite the strong efforts of our friends from Lincoln, among others, to do that.  The growth in the income, the income factor was placed in the




May 9, 1995 -- LB 6.13


bill as a means of recognizing income as a means of wealth in terms of distribution of state aid.  Since that time, the income rebate has grown and grown and grown.  Consequently, school districts that don't need state aid money are getting a higher and higher share of state aid money each year.  All of these are...  are difficulties and why we need to look at LB 1059 in general.  That's not the issue before us as Senator McKenzie,, if I were her, I'd be saying to myself that's not what 613 does and she's right.  (LB) 613 deals with the allowable growth rate for school districts and for other subdivisions of government.  She did point out a number of exemptions that were placed in the school district budgetary limitation.  A number of those were done on Select File of LB 1059 when it was debated by the Legislature.  My preference...


SENATOR CROSBY:  One minute.


SPEAKER WITHEM:  ...  quite frankly....  Pardon me?


SENATOR CROSBY:  I said, one minute.


SPEAKER WITHEM:  One minute?  My preference, rather than arbitrarily lowering the limitations by one percent, would be to get into some of those issues.  For instance, does special ed deserve to be an exemption?  One ...  we're passing one bill over here that caps special ed, yet special ed costs are exempt from the budgetary limitations of school districts.  Or a number of those other things make sense?  That would be my preference to deal with it.  I don't want people to get the...I'm sensing the buzz out in the Rotunda is that this is a major attack on LB 613.  1 support LB 613.  1 support limitations on school districts.  I certainly support the one...the extension of the budgetary limitation on schools and counties.  With all of the revaluation going on in the state right now I think it's essential that we keep some sort of lid in place.  I would suggest that regardless of the fate of this amendment maybe the preferable way to go would be...




SPEAKER WITHEM: look at these exemptions and I'll be making some of those suggestions later.


SENATOR CROSBY:  Thank you, Senator Withem.  Senator Robinson on the Withem amendment.




SENATOR ROBINSON:  Madam President, members of the body, we get the bill out of the Revenue Committee and I think...  I think what we're talking about today is the thing that's bothering most people as far as real estate taxes are concerned, and I agree with what Senator Withem said that LB 1059 is becoming stagnant, but I don't really think it makes any difference whether you pass Senator Withem's amendment or whether it goes back to Senator McKenzie, because I really...I really don't think we have much of a lid on schools because there are ways to get around the lid.  Now you may...  and you can probably ...  maybe you can justify all of them, but I talked to Department of Education and I asked them, now, what's exempt for the lid or what can you move over to property tax?  And that's what we're talking about, property.  The cities' and the counties' lids are on property tax.  The schools' is on budget and there's a big difference, folks, and I'm not saying it's wrong but there is a big difference.  For example, if...  if you lose 150,000 dollars on state aid you can move that over to property tax.  I had two school districts do that, one lost 254,000, their property taxes went up 15 percent last year.  I had another one that...  I think it was 170,000 dollars.  Theirs went up 16 percent.  In addition to that I was told that if your cash balance goes down, your cash balance goes down, say your cash balance was 750,000 and went down to 200...  say it went down to 500,000, you could take that 250,000 dollar, raise it in property tax, raise it in property tax.  And then there are federal programs.  I was told that if your...the money that you receive from Chapter I goes down, money that we receive from Chapter I goes down you can move it over to property tax.  So you're taking money out of the General Fund to support a federal program.  Likewise, they mention Chapter II, which is not very much money, and they also said Title VI-B in special education programs below age five, if those go down you can make up the difference by property tax.  I think impact aid was mentioned, the CIR ruling.  Also, I was told that if the money you receive from county fines and licenses go down that can be moved over to property tax.  The money that you receive from state apportionment, if that happens to go down you can raise that can receive what you got from the preceding year by moving that to property tax.  And in lieu of school lands, also the insurance premium tax, if those go down you can go back to the level you had the year before but you move it over -to property tax.  Now do you see what I'm saying?  When you...either way, it really doesn't make much difference 'cause the schools are going to get...  they're going




May 9, 1995 -- LB 613


to get the money but it's going to go on property tax and I don't have to tell you if you take a...  if you take a look, go back to your school districts and find out, ask them what your budget went up as far as property tax.  They'll try to say, well, our budget went up this.  Ask them what it went up in property tax.  It's not a true lid like the cities and counties and, like I said, maybe it shouldn't...


SENATOR CROSBY:  One minute.


SENATOR ROBINSON:  ...  be, but it is not.  It definitely is not and I think that's the problem we have in the State of Nebraska and, Senator Withem, address some of those.  Maybe there's some of those things we should take out from under the lid.  And I guess another thing went through my mind, say you increase 250,000 dollars in...  in state aid.  What happens to your budget then?  Nothing happens.  You just have that much more money to spend, see?  So I think those are some of the things that we have to talk about when we're talking about the lid on schools.  Thank you.


SENATOR CROSBY:  Thank you, Senator Robinson.  Senator Schellpeper.


SENATOR SCHELLPEPER:  Thank you, Madam Chairman and members.  I'd like to ask Senator ...  Jan, if you could, I need some dollar...


SENATOR CROSBY:  Senator McKenzie.


SENATOR SCHELLPEPER:  ...  I need some dollars, if you Can.  What would be the estimated dollar, Senator, if we're going to go with your bill, what would be the estimated dollars saved?


SENATOR McKENZIE:  Senator Schellpeper, I actually was just doing that calculation so you must have ESP and, yes, I do think it's me that needs CPR today, not CPI, but schools, if we could reduce spending in General Fund expenditures alone for the schools, it would be a 16 million dollar saving...  savings.  And in terms of ...


SENATOR SCHELLPEPER:  If we went to zero or...


SENATOR McKENZIE:  If we just reduce one percent spending.




May 9, 1995 -- LB 613


SENATOR SCHELLPEPER:  That would save 16 million dollars ...


SENATOR McK ENZIE:  Sixteen million dollars.


SENATOR SCHELLPEPER:  ...  a year in the State of Nebraska.


SENATOR McKENZIE:  And then cities and counties, and that's all I looked at, would be about 9,200,000 dollars.


SENATOR SCHELLPEPER:  Now that's assuming that everybody is going to use the allowable limit.


SENATOR McKENZIE:  Right, because even if we lower that range for school spending they can use the one percent to go back to where they would have been, that supermajority one percent.


SENATOR SCHELLPEPER:  So even with the Withem amendment, that 16, basically schools would be...  one percent in ...  which is what the Withem amendment would put it back up, that's 16 million dollars.


SENATOR McKENZIE:  He would retain the current lid.


SENATOR SCHELLPEPER:  Um-hum.  Okay.  Thank you.  Well, basically, I really don't like LB 613.  1 have never favored lids.  I think that you're better off putting it back to elected officials.  If you're...  if you have a lid, say you have a 5 percent lid and you go in there one year and you said, well, we really don't need 5 percent increase but we're going to use it because if we don't next year we might need it, so let's go in there every year, let's take whatever the state allows us to have in a lid.  So unless you have a zero percent lid, everybody has a zero percent lid, it doesn't do any good to have any lid.  I think you're better off to just let the local elected officials do it.  The problem comes from using property taxes to fund education.  If we had in Nebraska some other way to fund prop ...  to fund education besides property taxes we wouldn't be having this discussion this morning.  That's the whole problem, right now is using property taxes to fund education when about 75 percent of your property taxes goes to fund education.  This state has to find some way to fund education besides property taxes.  That's our problem, not having a lid.  The local elected officials are elected to run whatever government entity they're out there to...  elected for, whether it's the county or the city or NRD or whatever it is, a school.  Let them do their...their




May 9, 1995 -- LB 613


job, but let's find a way to fund education when 75 percent of your property tax goes to fund education.  So whether you have a one percent lid or a 5 percent lid or a 6.5 percent lid, I don't think it makes a bit of difference 'cause people are going to use whatever amount that we allow them to raise.  If we'd say, all right, school can have 6.5 and the county can have 5, that's what they're going to raise every year.


SENATOR CROSBY:  One minute.


SENATOR SCHELLPEPER:  Let that local official, let him have a little responsibility, and if he goes up 7 percent one year, he's up for election the next year, he won't be in office.  People will let him know locally.  I don't think this body should be down here telling people how to run their business back in your local elected ...  or your local subdivisions.  So whether the Withem amendment is adopted or not I think that allows county or allows schools out so you're really not accomplishing very much with this bill, so I really have mixed emotions about whether we adopt the Withem amendment or not.  I'd just a soon see the whole bill go away.  Thank you.


SENATOR CROSBY:  Thank you, Senator Schellpeper.  Senator McKenzie.


SENATOR McKENZIE:  Thank you, Madam President and members of the body.  I wanted to follow up earlier discussion a little bit about the whole issue of schools and whether they ought to remain as they are or be asked to spend one percent less and I handed out for you three pages that are...  are rather complicated to understand but are the heart of what the School Finance Review Committee Uses to evaluate 1059 and school spending every year in their report to the Governor, as required by the section of statute that Senator Withem handed out.  And what I wanted to ...  to be able to share with you was some information that counters the arguments that are made about its mandates, its growth in special education, its ...  its ...  all these other things that are causing us to spend more.  If you'll look at the first page that has the chart in the middle and is for fiscal year '93-94, the first item on that chart says "Allowable Growth, General Fund Expenditures" and "Impact on Growth".  Nearly 70 percent of the impact on additional spending in the state comes strictly under what we consider the lid.  It's not new or expanded federal or state programs.  You'll see that less than one percent.  It's a tenth of a percent, and


May 9, 1995 -- LB 613


court-ordered final judgments were one-hundredth of a percent.  The only other thing that really did impact what schools had to deal with under the lid was special education, chance in special education budget authority and increases in the formula, rapid growth for students.  The second sheet also explains to you how many schools are within that range, and the basic allowable growth range ...  rate is kind of a statistical computation using a linear regression and every district ends up with a certain number.  It might be 4.0, it might be .42, it might be .40, it might be .519, and that's what they use to set their budget.  But you'll also notice the second category look...  shows you the districts that added the additional one percent and that brings me to the arguments that Senator Schellpeper was making.  You know, the original bill struck the unused budget authority and the supermajority one ...  supermajority vote to spend one percent more.  Unused budget authority is one of those issues that can be good and bad.  It allows a district to see the lid or the lid as in fact as a ceiling instead of a floor because if they choose to only spend 3 percent instead of 4 percent they get credit for that 1 percent.  It's just a number that goes on the wall.  it's not money that they collect, so it encourages them to spend less than they need to in years when they don't, but they have the credit for a year when they need it.  And any time during the year if they need to amend their budget to use it, they can use it.  The supermajority one percent also allows them some flexibility.  If we drop schools down to a range of 3 to 5.5 instead of 4 to 6.5 we have a number of school districts that will vote that additional 1 percent and it is their local decision.  But I see Senator Schellpeper has disappeared from the floor.  I was going to ask him how many constituents attended the last school board budget hearing or how many attended the NRD budget hearing or the county board budget hearing.  Quite honestly, one of the problems here is that local control only works if local people go to the board budget hearings and help control spending.  But in my district and in my experience there are no people there at the budget hearings.  I talked to a friend of mine from Oregon this last weekend...


SENATOR CROSBY:  One minute.


SENATOR McKENZIE:  ...  who finds our system of finance using property tax pretty amazing.  They have to ...  they have to approve by a vote of the people their school budget every year until they can vote in a base for school spending and the only way you ever vote in a base is if you win the confidence of the




May 9, 1995 -- LB 309, 330, 392, 425, 538, 572, 598, 613 669, 871, 872 LR 108


public that you are going to be responsible.  I, again, would appreciate Senator Withem's bringing the amendment so we can have a thorough discussion about the portion of the amendment that deals with school finance.  I would, however, have to voice my opposition to the amendment at that time...  ...  at this time, partly because it seems to me when we're talking about the political subdivision that spends the most in terms of property tax money that only putting a burden on counties and other political subdivisions is really...  is really not a fair and thorough review and...




SENATOR McKENZIE:  ...  of all of the political subdivisions in the state.  Thank...


SENATOR CROSBY:  Thank you, Senator McKenzie.  Senator Jones, for what purpose do you rise?


SENATOR JONES:  Move that we recess until one-thirty.


SENATOR CROSBY:  Mr. Clerk, do you have items for the record?


CLERK:  Madam President, bills read on Final Reading this morning have been presented to the Governor.  (Re.  LB 330, LB 538, LB 572, LB 872, LB 309, LB 598 and LB 669 on page 2049 of the Legislative Journal.) Resolution 108 by Senator Dierks, a study resolution, will be referred to the Executive Board; Senator Hall, amendments to 392, Senator Janssen to 425, Senator Elmer and Bromm to 871.  (See pages 2049-52 of the Legislative Journal.) That's all that I have, Madam President.


SENATOR CROSBY:  You've heard....  Thank you, Mr. Clerk.  You've heard the motion to recess till one-thirty.  All in favor say aye.  Opposed no.  We are recessed.








May 9, 1995 -- LB 418, 613


SENATOR VRTISKA:  Please record your presence.  Please record, Mr. Clerk.


CLERK:  I have a quorum present, Mr. President.




PRESIDENT ROBAK:  Mr. Clerk, LB 613.


CLERK:  Madam President, the committee amendments were offered this morning.  Senator Withem had moved to amend with AM1819.  The Legislature was discussing that amendment when they recessed.  That amendment is now pending.


PRESIDENT ROBAK:  Senator Janssen, your light is on to speak to the Withem amendment.


SENATOR JANSSEN:  Thank you, Madam President, members of the body, you know as we were discussing this bill, 613, all of a sudden I got to thinking, you know something isn't quite balancing out here.  Just a few minutes ago we passed, on General File, LB 418 which put another mandate on entities and I just ...  why are we ...  you know how can we turn right around and say we're going to cut you back again and then apply something new to it?  So you just think about that a little bit.  You can't have one without the other.  You just can't have one without the other so I would expect that any of the members who voted for 418 would certainly vote for Senator Withem's amendment.  That's about all I had to say.  You know, and I think to keep that growth rate from happening, we can't be adding something on to the top end all the time which we do right along and then say you've got to cut back.  Until we can remove some of the restrictions we put on them how in the world can we sit and tell government entities, I know, I know the cost is going up, but every time we add wore fuel to the fire it just gets worse.  So I would ask you to just think it over a little bit before you cast your ballot.  Thank you.


PRESIDENT ROBAK:  Thank you, Senator Janssen.  Senator Robinson would like to announce that there are 76 fourth graders and three sponsors here from Arbor Park Middle School in Blair, Nebraska.  They are all in the north balcony with representatives of Senator Schellpeper's district, 24 seventh and eighth graders and their sponsor from West Catholic School




May 9, 1995 -- LB 613


in Fordyce, Nebraska.  Would you all stand and be recognized, please.  Welcome to the Legislature.  Senator Warner, to speak to the Withem amendment.


SENATOR WARNER:  Madam President, members of the Legislature, seems to me there's all kinds of options that's been discussed and appropriately so.  Seems to me the goal that we need to look at over the next three, four years if in fact we're going to do something on property tax and taxes generally and restructuring the government and all the rest, is that in that interim period at least we ought to be striving to keep the growth in government budgets consistent with the growth in revenue and that we should not authorize expenditures beyond a lid that will exceed normal growth in revenue without a change in rates.  And for those reasons I tend to be supportive of the bill as introduced.  I do want to point out that if the committee amendments were adopted there are a couple of exceptions there already with the authority for unused budget authority which could ease some of the problems that people might mention with the provision for the additional one percent.  That's also a factor that would make a difference.  I think there is no doubt, based on the discussions, that there are other options that can be used that would tend to curtail the growth in government so that it was, in budgets, so they were consistent with the growth in revenue.  But at this point at least I would tend to ...  not to support the amendment to return the limitation on the schools to the existing limitation but rather to stay with the one that is proposed in the bill, unless we can find other options which will also have the same effect, that is keep budget growth consistent with revenue growth particularly during this period of what may be a period of transition.  But for those reasons I would tend to want to stay with the committee amendments and with the bill as introduced.


PRESIDENT ROBAK:  Thank you, Senator Warner.  Senator Bernard-Stevens.


SENATOR BERNARD-STEVENS:  Thank you, Madam President, members of the body, a couple points I'd like to Just put on the record as just long as we're talking about the Withem amendment and again if we get to vote on the amendment I will be voting in favor of the amendment.  One of the things that I'm very, at least personally, an issue that I have on the whole topic of school funding is that it is so complicated, not that we can't understand it, but there's so many issues that tie into the




May 9, 1995 -- LB 613


setting of what the level should be for growth.  And just putting some of the things down here that we've talked about already and some that we haven't, special ed funding, whether we should put that within the ...  keep it outside the lid or not.  The tiers I know we're going to be working on, we just haven't gotten the bill and we're not going to get to that bill, this session so the tier issue, which will make a big difference on how we fund education, will be one that will be up in front of us next session, I assume.  The Legislature taking its responsibility more seriously on 1059 and actually each year looking at the data and setting the rates or at least determining if they wanted to keep the same rate or not.  The Governor's Office actually submitting a budget that would fund it at 45 percent.  The income tax rebate will be an issue that we wanted to get in front of us this session, but there simply wasn't a vehicle, which will make a big difference on what we do.  In fact, if there is one issue that is causing disparity among the haves and have nots in education right now, it's the income tax rebate.  I've been taking the purist:  role...route on that and saying we should just eliminate it and put all of the income tax into the funding mechanism, a general formula, but I suspect we're going to be something of a cap or try to do some kind of cap on income tax rebate.  We've got all of the other issues that are out there.  What I would propose to do is that we agree with the Withem amendment, keep, for the most part, education separate and next session, as we go into all of these other areas, look and see how these changes we're going to make, how it will affect school districts on whatever-lid that we set at that point.  Now it could be argued, 1 suspect, that we can do that anyway and that is true but I think philosophically it would be best not to have go much instability that again year to year they have no idea what the lid is going to be.  I think we should go ahead and keep it as it is now and then next session when we get to all of those other bills one of the things that will be included in that is a discussion of where, with all the changes we're doing and going to do or going to try to do on income tax rebate, on the tier systems, special education funding, at that point is the proper time to talk about what level we should put the spending lids at.  I don't think it serves us a good, it serves school districts well or the Legislature well to say we're going to lower the spending limits then get in all the major funding issues on education and then again next year maybe make a decision that by lowering the lid plus the changes that we're going to make that we're going to have to change the lid again.  That's not very reasonable or I




May 9, 1995 -- LB 613


think even responsible to do.  I really think the Withem amendment, let me rephrase that, I think what the Revenue Committee and what Senator McKenzie is trying to do is laudable.  I don't necessarily disagree with that.  I think school districts probably can be tweaked a little bit and tightened on the lids, but I'd rather do it in a general overall discussion on school finance rather than just going across this way on across the board talking about all political subdivisions and just picking out on the school districts including them simply because they are a political subdivision.  I think we need to look at the whole aspect of funding of education and then...




SENATOR BERNARD-STEVENS:  ...  based upon the figures and the data that the Department of Revenue gives us, set what we believe to be the proper lid and the proper growth rate based upon the changes that will be coming on the education funding.  It makes sense to do it that way.  It may be more difficult to do it that way, but it's the better way and a better policy which is one of the again, reasons why I would vote in favor of the Withem amendment.


PRESIDENT ROBAK:  Thank you, Senator Bernard-Stevens.  Senator Hartnett, followed by Senator Bohlke and Senator Withem.


SENATOR HARTNETT:  Madam President, members of the body, if I could ask Senator McKenzie some quest...  if you could get this handout that you passed out, Senator McKenzie.


PRESIDENT ROBAK:  Senator McKenzie.




SENATOR HARTNETT:  On the second page, Senator McKenzie, you know as we debate this and bring this question, you notice that in the basic allowable growth rate, 6.5, 130 school districts were in that range, 78 took advantage by a super majority of the board to override that 78 did.  What size districts were those?  Do you know, in these different categories because you know a third of them were below the 4 growth rates, 4 percent, 263 and then there were, you know in the midst, and I guess my point for raising the question, you know, by making a tighter lid are we having a greater impact upon, you know, certain size districts within the state that felt they needed to go to the 6.5 and




that's ...  you know maybe it's ...  maybe you can't answer me at this present time but maybe you can, so, it's all yours.


SENATOR McKENZIE:  Senator Hartnett, no, I cannot.  How you, what size of school districts is included in that 130 and then the subsequent 78, that information is available only by going through every single school report, budget report that is delivered to the auditor's office and to the Department of Education.  I can certainly call the department and see if they have anything you can look at.


SENATOR HARTNETT:  Yeah, because I think, you know, are we putting a burden on certain size school districts by, you know, what we ...  and I supported, you know, the amendment as it was in the Revenue Committee, but are we doing something that is going to harm the progress and the education of those particular students?  Thank you.


PRESIDENT ROBAK:  Thank you, Senator.  Senator Bohlke.


SENATOR BOHLKE:  Madam President, members, following up a little bit on what Senator Bernard-Stevens was discussing and what I had said earlier, in that as we look at education and how complicated it is to see how it fits in line with what certainly LB 613 and, as I said, what has come out of the Revenue Committee as we look at possibly a lid on the levies and then why school districts, because 'they have to provide some things to students, how that all fits together.  I do think that that Now I makes school districts somewhat unique.  Now I think Senator McKenzie said by coming down I percent we could be talking about 16 million.  As we were out on our interim hearings last summer we heard from school districts, if we could have a time where they wouldn't see these radical fluctuations in what they receive and we've tried to work on that this session and knowing that we're heading towards and intending to go towards doing some things on school finance, we an Education Committee, as I said, have decided to spend the whole interim focusing just on that and not doing any other interim studies.  As we look at those things such as special education costs that we have another bill that does that this summer, as we look at possibly collapsing the tiers, that causes radical changes as we look at the issue of income tax rebates that Senator Bernard-Stevens touched on, option students, all of those types of things.  What should be put through the equalization formula and what should not?  Should special education be put through the equalization




May 9, 1995 -- LB 613 LR 93


formula?  Those issues all have real impacts on school finance, As an example, we've had the discussion, all right, ratcheting down 1 percent could be 16 million but if we hear people say no more mandates, we can say here's one back, we no longer will mandate transportation.  Do you know that we spend $37 million in transportation costs?  Now, you know we're looking at major, major things as far as savings and what could happen when we're talking about these particular areas that I've just touched on and certainly differences then on how that impacts schools through the equalization formula.  For that reason I think it's good that we have this discussion and people realize that I think schools are a little different than the other subdivisions when we talk about how moving that percentage down may impact them.  I think it's very difficult for us actually to know how this all fits together.  No one has been able to explain it yet to me on how, if we go ahead with LR 93CA and that passes, if we do this special education bill and if we would do this and then this summer we come back and recommend a number of the things that I'm saying we could be touching on, we will be talking about very, very radical changes and so I think it's those things that we have to consider as we proceed with this discussion.  And I think people have done a good job of explaining why a school district is a bit different as a political subdivision because you know when people say to me that they want no more unfunded mandates I do remind them that public education is, you know, an unfunded mandate.  And co as we talk about our obligation to students in this state I think that the requirements and the things that schools must do put them in a little different light...




SENATOR BOHLKE:  ...  and I think that we need to consider these.  I'm not sure if we can work something out to Select File so that we can look at some of the things that we talked about, certainly the allowable growth rate, as this is the first time we've really had a discussion on that and I guess it just goes to show when Senator Withem sometimes has a lot to do and Bits there and starts to read and find out things that we have neglected in the past, that there are things that we could do there.  There are 110 school districts that went up to the 6.25 percent.  Now that's not saying they should or shouldn't have, but that's what the number of school districts that we allowed to go up to that higher allowable growth rate.  We, from what is on our desks, we as a Legislature can change those




May 9.  1995 -- LB '013


percentages.  There are many things that I think impact school aid and certainly LB 1059 and they are indeed complicated and so I'll be listening to see if Senator Withem.  has determined if he and Senator McKenzie...




SENATOR BOHLKE:  ...  can come up with something before Select File.  Thank you.


PRESIDENT ROBAK:  Thank you, Senator Bohlke.  Senator Withem.


SPEAKER WITHEM:  Thank you, Senator Robinson, I do appreciate the discussion that we've had on this amendment.  Would like to comment a little bit about what I plan on doing now., would like, I know we get tons of stuff on our desk and as you can see by mine, it doesn't get a lot of attention necessarily, but I think because of the fact that school spending is such a high portion of our budget that it would be beneficial to take a little bit of attention to some of these documents here.  One of them is out of the report of the School Finance Review Commission that shows a 10-year average growth in spending in Nebraska schools and it's been about 6.5 percent total disbursements.  When we wrote 1059 we hoped it would be at about 5 percent which I think is an indication that if you believe in state lids to control spending, which I have become an advocate of over the years, particularly the way 1059 is written, probably Senator McKenzie and her bill has a point that it may not have been as tight as it should have been to accomplish its goals.  My preference, I think, I indicated earlier would be as opposed to going in and dropping the percentage point just by one point and thinking we've done something good by doing that would be to get into it and actually do, I think, what was envisioned that we'd be doing on an annual basis, looking at some of the exemptions, looking at some of the other aspects of it, but 1 certainly do understand the need for the bill, particularly, and I don't know how many times this point has been made but one of the things that makes me think that the lid needs to be continued on cities and counties, this year particularly, is because of the status of the property tax problem in our state.  We have individuals in our state quite concerned and upset about their property tax rates.  At the same time we're having a huge revaluation taking place and that's the time particularly when the valuations are going up it will be a temptation to continue rates as they were to take advantage of the spending that is possible through the




May 9, 1995 -- LB 613


revaluation, I think, is particularly important to remember what we did as a legislative body back in 1989 when we sent $100 million back out to subdivisions for property tax relief.  It didn't necessarily get there that way.  So we do need a lid.  I am not opposed to tightening the school lid, I am just opposed to this methodology.  A number of other things I'd like to see you pay some attention to about school finance.  One of those is each year we're getting away from the 45 percent spending level.  Each year the Governor is supposed to introduce legislation telling us how to close that gap.  We've not had that legislation introduced yet.  School finance review can enter the contract with Augenblick, VanDeWater & Myers to do a review of school finance.  They made a number of recommendations.  We haven't paid much attention to those recommendations.  Those include things like dealing with the efficiency issue, dealing with the income tax rebate, needs associated with size, the tier situation, we haven't dealt with that yet and the rebate itself.  Some place on here on the back sheet here, components of state aid, you'll notice that the equalization number was a sizeable portion, a vast majority of the money distributed in state aid.  Each year that goes down.  Those of you that have school districts that are not wealthy in terms of income are going to be penalized by more and more money that goes into the income tax rebate.  Those are all issues that need to be dealt with.  As far as how I want to approach LB 613, 1 do not think...




SPEAKER WITHEM:  ...I want my amendment adopted.  Just as I indicated I don't know as it is necessarily the best policy alternative to simply go in and say that we're going to arbitrarily reduce both ends of the budget limitation by 1 percent and claim that we've done something that is good, policy.  I'm not so sure leaving it where it is good policy either, so I'm prepared to vote to advance this bill to Select File in this form and will probably be using my energies on this bill hopefully with Senator McKenzie's involvement and Senator Bohlke and Senator Bernard-Stevens and others, may be looking more at the exemption area than at the percent level.  So with that said, let me withdraw the amendment.


PRESIDENT ROBAK:  The amendment is withdrawn.


CLERK:  Madam President, Senators Coordsen and Maurstad had an amendment printed.  Senator, AM1849.  I have a note on that that




May 9, 1995 -- LB 613


you want to withdraw 1849.


PRESIDENT ROBAK:  It is withdrawn.


CLERK:  Senators Coordsen and Maurstad would move to amend.  Senator Maurstad, the amendment is on page 1900 of the Journal, Senator.


PRESIDENT ROBAK:  The Chair recognizes Senator Maurstad.


SENATOR MAURSTAD:  Thank you, Madam President, in addition to the amendment being printed in the Journal I've also added to your pile of pertinent pieces of information by handing out the AM1866, in addition to that another example that I'll use.  What we're talking about here is providing unused budget authority to other political subdivisions that levy a tax.  Right now school districts have this ability.  The other governing bodies do not.  I was approached by a village board member from my district that presented a particular problem that he had and that dealt with their wanting to decrease their property tax levy but having no incentive, first of all, to do that because of the lid provisions and, secondly, no guarantee if they needed that authority down the line either because of an anticipated or unanticipated expense or a loss of revenue that they would not be able to meet their obligations as a village.  I think that example crosses all political subdivisions where we need to look at providing flexibility to local subdivisions to not necessarily bump right up to their tax limitation and take away one of the arguments that's used many times by those that want to spend more and that if we don't use our taxing authority we lose it into the future.  I have passed out an example that tries to illustrate this.  I hope that it's somewhat clear.  In two villages, it could just as easily be two fire districts or two cities or two counties.  In going through a scenario over a couple of years of one village, Village A, decides not to increase their budget, their budget authority, therefore, goes unused for a number of years.  Their levy stays the same.  In comparison to Village B that uses the budget authority every year and after a three-year period what- happens to their levy?  I feel that the individual members can look at this chart and understand it so I'm not going to spend time reviewing every aspect of it.  If someone has a question about the chart that I've handed out, I'd be more than willing to answer that.  I think that this is a necessary tool that we need to provide, need to provide the local subdivisions.  I don't think it...  I




May 9, 1995 -- LB 613


can't see where there is any negative impacts as a result of it and, therefore, I would ask that there be adoption of this amendment to LB 613 and would be willing to stand to answer an questions that the members might have.  I don't see Senator Coordsen here so I'll go ahead and end with that.


PRESIDENT ROBAK:  Thank you, Senator Maurstad.  Senator McKenzie.


SENATOR McKENZIE:  Thank you, Madam President and members of the body, I rise in support of the Maurstad amendment but I want to also add two concerns I have.  After studying the issue of' unused budget authority in the local school districts after the introduction of the bill I was concerned about the amount of money that we have out there in unused budget authority that schools could access.  The projections from the Department of Education this year shows $68 million in unused budget authority.  Now having that concern I visited with Senator Warner and members of his staff about unused budget authority and whether or not there have been abuses of unused budget authority by schools and unfortunately there probably have been a few.  but the other thing that I learned about it is that it probably is the only thing that keeps the lid from becoming a floor.  Unused budget authority encourages local political subdivisions to spend less when they need to spend less and yet to maintain some credit for that conservative approach to use in a year when they need it when there's an emergency, when there's something else that happens that requires the additional revenue.  It appears to me that unused budget authority has both a good faith and a bad faith and if in fact we believe in the competence of our local boards, and remember political subdivisions include SIDs, counties, fire protection districts, airport authorities, weed control authorities, NRDs, hospital districts, health districts, ESUs, regional libraries, road improvement districts, on and on, if we believe that they are capable of making those decisions of spending less than the lid if they can have unused budget authority then I believe that it is a good provision to add.  I do have some concerns yet about whether or not we need to make specific recommendations about the use of unused budget authority.  I will be visiting with Senator Maurstad between now and Select File and if, in fact believe that we need to make some additional provisions, will offer that for you on Select.  At this time, however, I do support the Maurstad amendment.




May 9, 1995 -- LB 613


PRESIDENT ROBAK:  Thank you, Senator McKenzie.  Senator Vrtiska.


SENATOR VRTISKA:  Thank you, Madam President, members of the body, I rise in support of the Maurstad-Coordsen amendment.  I rise because I've had a lot of experience with villages and fire departments and other small entities who tax and I understand very plainly what they're trying to do because of experience.  So many of the times the village board in a year when they really don't need the money particularly they tend to go ahead and levy it simply because they feel like that if they don't, then as Senator Maurstad said, they eventually will find themselves in a spot where they have less money to deal with and an issue comes up where takes a tremendous amount of money, they don't have any way to do it.  So I think what he's trying to do has some merit and I certainly would ask that other members look at it carefully if they understand the issue and as a result, support this.  I just feel like that we need to be responsible if we're going to put lids on counties and villages and other entities we need to be responsible and give them some latitude so that they can help themselves out in these times of need that certainly can happen to anybody so with that I will support the amendment.  Thank you.


PRESIDENT ROBAK:  Thank you, Senator Vrtiska.  Senator Hall.


SENATOR HALL:  Thank you, Madam President and members.  If Senator Maurstad would respond to a question.


PRESIDENT ROBAK:  Senator Maurstad.


SENATOR HALL:  Senator Maurstad, this is on your amendment as found on page 1900 of the Journal and that's AM1866, is that the correct...


SENATOR MAURSTAD:  Right, Senator Hall.


SENATOR HALL:  Okay.  And I'm looking at line 7.  It's where we say that any governing body that chooses not to increase it's anticipated aggregate receipts from property taxes to its authorized level for the current fiscal year may carry forward unused authority the next fiscal year, period.  And then we go, in such case the auditor of public accounts shall calculate the amount of unused anticipated aggregate receipts from property taxes which shall be carried forward to future fiscal years.  My question to you is, by using the auditor of public accounts,




May 9, 1995 -- LB 613


since the auditor of public accounts is not involved at all in the process of setting that budget, and I know that the counties or the various subdivisions and I believe, I'm not sure but I think if I'm not mistaken all of them have to at least file their budgets with the auditor and they're not, for the most part, audited by the auditor of public accounts.  By bringing that office into the mix are we creating an ...  not only an additional burden on state government, but more than likely a lot of work and expense within the auditor's office which I think is probably unwarranted and would you be willing to a change there that says that the governing body shall calculate.  Since they're the ones that are ultimately responsible to the voters, they're the ones that have been elected to these positions, they're the ones that have passed on thin budget, they're the ones that are going to be spending the money or saving it so they have that unused authority to spend in the future, don't you think that it makes sense to have, and I understand the desire to say is there a check and balance.  But clearly you would have that when you look at the budget, you adopt the budget, you don't spend up to the budget limit, you have that reserve that is set aside.  Everybody gets audited by someone.  Usually they contract with a private entity.  But couldn't we say that the governing body shall calculate the amount of unused...  and in effect what we would be saying is that through the use of their own audit practices that they currently have right now, calculate this figure which would be very easy for them to do without having to bring in a whole new level of state government injecting into that which means that the auditor would now have to have the budget, review each of those budgets and I can see the fiscal note or the A bill that would follow this could far exceed the benefit that might be derived and if we were to leave it at the local level with that governing body where 'the responsibility lies, you could accomplish the same goal because I think I'm supportive of what you're attempting to do but I would like to see that change made if you and Senator Coordsen don't have any problem with that.  The problem is that since we're on an amendment to an amendment the amendment cannot go up now.  It's something that we can clean up later if you're willing to address that.  I'd relinquish the balance of the time if you would respond to that idea.


SENATOR MAURSTAD:  Thank you, Senator Hall, and a couple of things.  I, like you, share the trust in our locally elected officials and the political accountability that they're held to




May 9, 1995 -- LB 613


at that level and I agree, and they most certainly will at the local level calculate what this number is.  As we were developing the amendment the schools now can look to the Department of Education to provide ...




SENATOR CROSBY:  One minute.


SENATOR MAURSTAD:  ...  this check, this level of accountability for everybody.  What we attempted to do was find a similar centrally located entity that would be able to, when necessary, be able to calculate what this number would be.  But the intent is not, I want to make clear, the intent is not to provide additional work for the auditor of public accounts, it's not to provide him or that office with the ability of being able to come back to the Legislature for additional funding for something.  As you've indicated, it should be a fairly simply computation to derive, I think, when the audits are provided.  It provides the necessary check on the system to make sure that there is not an abuse out there.  I don't think anybody...




SENATOR MAURSTAD:  ...  would abuse it, but I think we need somebody to look at it and I'm willing to work with you on seeing if there is a better spot for it.


SENATOR CROSBY:  Thank you, Senator Maurstad and Senator Hall.  Senator Maurstad, your light is next.


SENATOR MAURSTAD:  I'll waive off.


SENATOR CROSBY:  Senator Lynch, on the Maurstad amendment.


SENATOR LYNCH:  Could I ask Senator Maurstad a question?


SENATOR CROSBY:  Senator Maurstad, will you respond?


SENATOR LYNCH:  Senator Maurstad, I'm also curious about the language that dealt with the auditor in particular because I believe that all of the counties and cities are audited and I think it's a law that they have to be.  We also know that when they certify their levy to whoever, in this case the state auditor, that's after an audit has been accomplished.  I don't




see why at the time that audit is accomplished that what you're looking for couldn't be accomplished by whoever was doing the auditing for that county or that city and they would simply certify to the auditor those percentage& of the unused authority to spend that exists.  Does that make any sense to you rather than auditing again?


SENATOR MAURSTAD:  Yes, it does, Senator Lynch, and in fact when we were discussing with the auditor's office how and what manner that would be necessary here, the auditor's office was talking about adding one line onto the report that the entity would provide to them.  So they themselves do not see this as opening the door of some bureaucratic oversight, but merely just providing an additional line on the form that would provide their office with what that number would be.


SENATOR LYNCH:  Okay, I appreciate that.  It could be then that maybe if a county didn't do that, the state auditor or whoever would try to find that number themselves, but I was curious especially since we know the counties and the cities in the past that did use the auditor's office didn't get it free.  They had to pay for that, and so a number of them, of course, use auditors in their own counties and cities that are very competent and qualified individual, private operators and some cases even did it cheaper than the State Auditor's Office.  So if somehow the language could be interpreted that way, it would not force a second audit or any additional expense to the county, but I think it's a good idea and I think it's a good concept.  I'll say right now too if I can, that I know Senator Warner mentioned earlier that spending authority existed in case of some local jurisdictions and there may have been an incentive to try to spend it.  I kind of got that impression, you maybe didn't mean it that way, Senator Warner, but, I just want to testify to the fact that I don't think that's necessarily true especially in local jurisdictions.  I know counties that had the five mill levy limit, for a long time some counties never came close to it and never tried to spend up to it.  I have very serious concerns about the 4 percent cap we're going to apply as it applies to spending for 'Local jurisdictions.  It would be interesting if we applied that to agencies of the state, but I'll talk and go into some detail about the different agencies of the state that are-getting 10, 11, 12 percent increases and I think we're going to apply a principle to local jurisdictions of government because we want to make it look like we're trying to do something about property taxes, we ought to in our own hearts




May 9, 1995 -- LB 613


and consciences agree that that's what we should do ourselves for our own agencies as well, and I'll talk about that more when we get to, the bill.  But I appreciate your answer, Senator Maurstad.  Sounds like a good idea if we don't have to change the language to accomplish what we just talked about, do we?


SENATOR MAURSTAD:  Well, Senator Lynch, if -the amendment is adopted, as I indicated to Senator Hall, will certainly look at this particular language to see if it can be written a little more clearly to indicate that what we're really talking about is adding a line in the reporting requirements.  We're not talking about a separate audit and that it might very well be something that we can just rely on the...


SENATOR CROSBY:  One minute.


SENATOR MAURSTAD:  ...  normal auditing procedures of the subdivisions to be able to handle what we're trying to address here and that being the accountability.


SENATOR LYNCH:  I've come to respect, with great admiration, his good intentions.  I accept that now with this particular amendment.  We have Select File to look at it again and thank you very much for the answers.


SENATOR CROSBY:  Thank you, Senator Lynch.  Senator Hall.


SENATOR HALL:  Thank you, Madam President and members, I rise in support of Senator Maurstad's amendment, but, unlike Senator Lynch, I want to see it in writing.  So what the proposal would...  I think really all we'd have to do is to say that the governing body would put it as a line, they would be able to calculate the amount and list it in their audit that would then be submitted to the auditor of public accounts.  I think that would accomplish the issue that we're talking about just so that there would be the reporting of it, but yet we would leave to the local subdivision, the local governing body the process by which they currently exercise that audit authority, whether it be through the use of the auditor's office or through a private entity that they may contract with right now and I think if we do that we can clean the amendment up without any problem.  And whether it's here on General File or on Select, Senator Maurstad, are you agreeable to that kind of a proposal?


SENATOR MAURSTAD:  Senator Hall, certainly more than willing to




May 9, 1995 -- LB 613


look at working out some language in that general direction if that's you and the thoughts of the body as a whole.


SENATOR HALL:  Thank you.  On that rather elusive response...


SENATOR MAURSTAD:  Yes, I will work with you.


SENATOR HALL:  ...  I'll still support the amendment.  Thank you, Madam President.


SENATOR CROSBY:  Thank you, Senator Hall.  Senator Maurstad.  He waives off.  Any further discussion on.  the Maurstad amendment to the committee amendments?  Seeing none, Senator Maurstad, would you like to close?


SENATOR MAURSTAD:  Thank you, Madam President, I would just ,merely urge the body to adopt AM1866.  It deals with unused budget authority for other public subdivisions other than school districts.  I think, as Senator Hall and Senator Lynch have brought cut, more than willing to look at the language and work with them so that we can better identify the actual reporting requirements for the subdivisions in the calculation of this particular number.  Appreciate the discussion and would urge the advancement of the amendment.


SENATOR CROSBY:  You've heard the closing.  The question is the adoption of the Maurstad amendment to the committee amendments.  All in favor vote aye, opposed no.  Record, please.


ASSISTANT CLERK:  26 ayes, 0 nays on the adoption of Senator Maurstad's amendment.


SENATOR CROSBY:  The amendment is adopted.  Anything further, Mr. Clerk?


ASSISTANT CLERK:  Madam President, the next amendment I have is from Senator Vrtiska.


SENATOR CROSBY:  Senator Vrtiska, to open on your amendment.


SENATOR VRTISKA:  Thank you, Senator Crosby, I'll ...  soon as I get my amendment here I'll...but I can start telling you what it is.  Basically what I've done is introduce an amendment that would leave everything the way it has been, extend -the lid for one more year and just change the words '94-95 to '95-96.




That's basically the only change in the original amendment that we've been dealing with and I thought it would be a good idea to give you a chance to at least discuss that.  If you think the lid is working and is doing what needs to be done, then you'll support my amendment.  If you don't think it is doing that then I guess you won't support it.  I just have to make the comment that we're at a time when we're asking many of the, or when we're letting many of the other segments of government increase their budgets, we re asking county government and local government to reduce their budgets and somehow I don't know if that sounds like it's going in the right direction for both entities so what I'm doing is just asking that we extend it one more year, we study the issue longer and see if it is broke and needs to be fixed then we need to deal with it, of course, at that time.  But right now I feel like that in order to move ahead and move on to other things I would suggest that you support my amendment just to leave the lid limit where it is.  That's all my amendment does.  I'll answer any questions if there are any or any suggestion anybody has.  Thank you.


SENATOR CROSBY:  Thank you, Senator Vrtiska.  Senator McKenzie, on the Vrtiska amendment.


SENATOR McKENZIE:  Thank you, Madam President and members of the body, Senator Vrtiska, that's all your amendment does.  (Laugh.)


SENATOR VRTISKA:  What do I say?


SENATOR McKENZIE:  Guts the bill and extends the sunset.  I rise in opposition to the Vrtiska amendment to the committee amendments and I do so and let me use the same argument that I used in closing when we discussed LB 613 in Revenue Committee.  You know, people talk to us all the time about property taxes and I'm sure they do to you.  What are you doing about my property taxes?  What is the problem with you people in Lincoln that you keep making my property taxes go up?  And unfortunately people ask that because they don't understand that there are all these political subdivisions and I rattled off a number of them a few minutes ago who rely on property tax to set their budgets to be able to generate their revenue, to do what they have to do.  And there are certainly a 'Lot of issues that have to be discussed in the next two or three years as we move to finding a real solution to property tax burdens.  But we cannot talk about LR 93CA without talking about spending.  I didn't hear a lot of people in my district say to me, lower property taxes and shift




May 9, 1995 -- LB 613


it to something else.  I heard them say, cut spending.  We have to slow it down and I agree with Senator Lynch, that means us too, that means our departments and that means -the state as well.  I don't think LB 613 with the committee amendments is an unreasonable request.  I remind you again this is not asking them.  to cut current budgets, it's asking political subdivisions to spend I percent less.  To me there is a big difference, to spend 1 percent less.  And unfortunately those are the times that we are in right now where people are saying we have to find some solutions to the number of political subdivisions, we have to find a way to do things more efficiently, we have to try to retain quality and, of course, people don't want to lose it.  If it's the county, they don't want to deal with it.  If it's a school, they don't want to deal with it, but the public is saying over and over again, it's time to deal with it.  Again, I stand in opposition to the Vrtiska amendment.  This is about spending only 4 percent instead of 5 percent.  It is not a 4 percent cut in your budget.  It is a I percent cut in your spending.  Thank you.


SENATOR CROSBY:  Thank you, Senator McKenzie.  Senator Witek on the Vrtiska amendment.


SENATOR WITEK:  Madam Chairman, members of the body, I rise also in opposition to the Vrtiska amendment and Senator McKenzie said it much better than I could, so all I'll say is ditto, and I hope you will not support the Vrtiska amendment.


SENATOR CROSBY:  Thank you, Senator Witek.  Senator Bernard-Stevens.


SENATOR BERNARD-STEVENS:  I'm a little...  I just want a little clarification on the amendment.  Senator Vrtiska, the way we have the bill now was ...  we had a range from 4 to 6.5 and of course the committee amendments lowered that down.  Your amendment does what now, and I know it sunsets after a year, sunsets the whole thing after a year, but where are the lids percentagewise under your amendment?


SENATOR VRTISKA:  Senator Bernard-Stevens, basically all my amendment does is extend the present lid that we have in place right now one more year.


SENATOR BERNARD-STEVENS:  Okay.  So it keeps it at 4, keeps the range between 4 and 6.5?




May 9, 1995 -- LB 613


SENATOR VRTISKA:  Right, and I'd Just like to say one thing, well...


SENATOR BERNARD-STEVENS:  Go ahead, you can take ...  (inaudible)


SENATOR VRTISKA:  The only thing that I want to say and I forgot to say on my opening was that the local people are the ones that determine how much money we spend and because you give them the latitude and because you have now the Maurstad-Coordsen amendment on there, people are more comfortable without raising more taxes than they really need.  Before there was a fear that if they didn't levy all they are allowed to, they would eventually lose the ability to so they had a tendency in many cases, and I can name cases where they actually levied more taxes than they needed simply because they didn't want to lose that ability.  With that amendment he's taken care of and I guess I have enough faith in the local governing people to not expend any more money than they need and just because they are given the ability to do it doesn't mean they're going to do it so I guess I feel comfortable with just extending it for another year.  Thank you.


SENATOR BERNARD-STEVENS:  Thank you, Senator Vrtiska.  And I want to clarify something Senator McKenzie said that I thought was inaccurate.  I'm sure she didn't mean for it to be, when she said that this amendment guts the bill.  It doesn't gut the bill at all.  It changes one part of it.  In fact, the main portion of the bill deals with the political subdivisions on whether or not their lids will sunset and my understanding is, Senator, are you saying that all political subdivisions the lids will stay the same for one year?




SENATOR BERNARD-STEVENS:  Or just the public schools?




SENATOR BERNARD-STEVENS:  okay.  So what it does, Senator McKenzie, is it doesn't gut the bill, it does the same concept in that it maintains spending lids on all the political subdivisions for another year and that's one of the major goals of 613 was that when the political subdivisions, not counting the schools, their lids were going to sunset anyway and so what




May 9, 1995 -- LB 613


613 was designed to do is to continue that lid and then we got another wild hair and we decided that while we're at it let's really start telling the public how much we're really going to help them on property tax, let's lower the lids one more percentage.' And I'm going to support the Vrtiska amendment and, Floyd, you know whenever you and I get together on an amendment it goes down in flames so I'm assuming we're just going to get, there may be two votes and we'll' try to shoot for that third somewhere.  But one of the concerns I have on what we're doing to public schools is an example that happened in North Platte, Nebraska this last time around.  School board really bit the bullet.  They were afraid that they would not get as much state aid as they originally were told and so they really went and they cut the budget about 10 percent.  Again, let me say that the school district cut their budget 10 percent.  And in prior years when people were yelling about the cost of property taxes ...  what was being paid, no one went to the budget hearings that Senator McKenzie talked about.  But this last time around the entire place was packed and the reason that it was packed is because you had patrons, parents that had children in the schools saying, don't cut those programs, we'd rather you do something else.  And there was a tremendous outcry on the budget cuts.  What all you're doing on this particular bill is a feel good bill.  You're extending the lids and I think that's appropriate, but the other thing you're doing is just saying we're not going to look at any of the other education issues out there, we're going to look at them later.  We're going to look at the tiers later.  We're going to look at the income tax rebate later.


SENATOR CROSBY:  One minute.


SENATOR BERNARD-STEVENS:  We're going to look at all of the other things later, but what we're going to do is cut your lid down a percentage because it sounds good and all you're going to do is force the school districts to reduce even further.  And all you're doing at some point is affecting a major part of education for no reason that I can' think of except Senator McKenzie can stand up and say if we did I percent we may actually reduce $16 million of which you put $16 million statewide and your property tax relief is pennies, pennies.  Why do you want to do that?  I do not understand.  What we need to do in this Legislature is wait until next year when those bills do come up and we attack all of those issues and then we set the proper lid when we see everything as being on the table.




May 9, 1995 -- LB 613


SENATOR CROSBY:  Time.  Thank you, Senator Bernard-Stevens.  Before we continue with the next speaker I'd -like the Legislature to pay attention to some guests that Senator Bromm has here today.  They are under the north balcony, Norman and Lucille Pickhinke of Howells, Nebraska and Lucy Mochnayova of Slovakia.  Would you please stand and be recognized and welcomed by the Legislature.  Thank you for being with us today.  Senator Vrtiska, on your amendment.


SENATOR VRTISKA:  I'll pass for now, thank you.


SENATOR CROSBY:  Thank you.  Senator Lynch, on the Vrtiska amendment.


SENATOR LYNCH:  Madam Chairman and members, I'm going to support the Vrtiska amendment and I don't do it lightly, but on the other hand I don't necessarily like to see us doing something here on the floor that would make it appear that we're really serious about property tax because you all know in your heart this isn't going to mean a thing.  I served on a county board that never did spend as much as we were authorized to spend, but I was fortunate to be from a county that had a lot of value increases every year and in fact in some cases we reduced the mill levy.  I got elected for darn near 25 years for that.  Had nothing to do with it.  We had the good fortune of having a county that had a lot of economic development and then of course along came 775 and we didn't have nearly as much so obviously they have a problem now, but we all know that.  Lowering the levy limit will mean nothing.  It depends upon the area served by whatever jurisdiction is in that area that has very little valuation increase.  They have a serious problem.  If they're at or close to the limit now, they're going to be hurting.  You know when you talk about 1 percent you're not talking about I percent, you're talking about 20 percent.' If their levy limit is 5 percent and that they're at that levy limit and they have to get back down to 4, you're talking about a 20 percent reduction in spending, not 1.  Even dumb plumbers like me can figure that out.  So what harm are we really doing?  You know a long time ago when we offered all these exemptions back in the middle seventies when all this money started flowing in after we got out of the sales and income tax we gave ourselves exemptions.  We never did reimburse to the local jurisdictions that amount of money necessary to make up for what we took away from them in the form of exemptions in those days.  I'd like to




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point out that if we're going to get involved with the spending debate, keep in mind that we should consider the same thing for our own state agencies.  I'm not going to mention all the agencies.  We've got some that have over 11 percent increase this year.  It's okay with me.  If you want to have a spending limit at the local level, apply it for us as well.  You know, we're not going to have any kind of problem at all meeting and in fact lowering.  Might even have money left over for a tax rebate as 1 understand some people would like.  But let's not make it look like to the folks back home that we're really serious about property tax reform because we're not.  I'll share with you one interesting story.  I think it was in the late seventies when a 7 percent spending limit was imposed on local jurisdictions.  I just happened to be Chairman of the Board at that time and all of our agencies in the state requested less than 4, in most cases less than 3, and one less than I percent increase, all of the agencies of the county, because we didn't need it.  We didn't need anymore than that.  We had the ability to spend up to 5 percent but we didn't, up to 7 percent.  Except for the Extension Service, -the state agency got -through building a building and they wanted a 27 percent increase in their budget.  This state agency wanted a 27 percent increase, everybody else less than 4.  We gave them 7 percent because that's what the levy limit was.  That seem fair and reasonable to all you reasonable people?  You know what, we got sued.  The County of Douglas got sued by the state saying, you've got to give them a 27 percent increase.  After all, that's a state agency, that's not a county agency, and you've got to give them...  and we did.  We gave 'them a 27 percent increase that year because it was the state.  I'm only telling you that story because that's a good example for us to -'think about as we contemplate this cap legislation.


SENATOR CROSBY:  One minute.


SENATOR LYNCH:  Because, unless we do it ourselves, we shouldn't even imply that we expect local jurisdictions to do it without knowing independently and individually how it affects all of those jurisdictions.  I think for that reason Vrtiska's amendment is a good one.  It gives us a year to understand what we're doing and why we're doing it, not just play games with the minds of the local taxpayers, leaving the impression we're really serious about property tax relief.


SENATOR CROSBY:  Thank you, Senator Lynch.  Senator Vrtiska, you




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have a change here you wanted to make?


SENATOR VRTISKA:  Thank you, Senator Crosby, I guess I would like to ask for permission to substitute AM2102 for the amendment I put up simply because the amendment that I had up would wipe out the Maurstad amendment that has just been passed and in order to correct that I've got them up at bill drafters trying to get them down.  That's why I've been stalling, trying to get a copy so everybody would have a copy of my amendment.  It isn't down here yet and if you want to take my word for it, that's the only difference in the amendment that is being drafted in the one that I have filed up there.


SENATOR CROSBY:  The Clerk has the amendment, so...


SENATOR VRTISKA:  He doesn't have my amendment because it hasn't come down yet, right?  Oh, you have my amendment up there?


ASSISTANT CLERK:  Senator, I have the new amendment.  It's 2102.


SENATOR CROSBY:  The Clerk has the amendment.


SENATOR VRTISKA:  AM2101, well I don't have copies down here but I guess what I'm saying is that what my amendment does is basically what I had told you earlier except.  it does leave the Maurstad amendment in there which has been just recently passed.  I just want to continue on a little bit.  I think that anybody, everybody in this Legislature who knows me knows that I am as conservative as anybody on this floor.  The problem I have has been pretty well demonstrated by other people and that is in some sense we are playing a game and in some sense what we're saying is we don't trust the local elected officials to make decision on how they ought to spend their money and the amount that they ought to tax the people.  I never felt serving on the board for many, many, many years we never overspent in our county.  I can't say that for every county.  I can't say that for every school district but by and large those who tend to spend more than the people that are satisfied with, end up being voted out, in many instances, being voted out of office and that's why I think that probably the best cap on spending we had is the elected officials who are in charge of the various entities of government.  And so I do have some faith in what they do.  We're talking about a difference of I percent here and a complete change in...  somewhat in philosophy that I think that I don't necessarily disagree with and there may be instances




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where the idea is better than what I'm trying to present.  But in many cases, in fact I think the majority of cases, leaving this the way it is and studying it for another year and determining exactly what direction we should go is, in my opinion, a better way than what we're trying to do with the original amendment.  So I still would hope that I would get your support for my amendment, to leave things the way they are at the present time, extend the lid for one more year, do some studying in the meantime to determine what direction the body wants to take in regard to how they want to cap spending or if they want to cap spending or how they want to address the issue and put some faith back in the local elected officials in dealing with the issues.  As I said earlier when I talked a while ago, I have more, feel more strongly about my amendment than I did before the Maurstad amendment simply because it gives those individual counties an opportunity to make the decisions on how much they want to spend and not be penalized because they didn't take the full amount that they were allowed under law to do and thereby getting their budgets reduced in subsequent years.  That's been one of the fallacies oil the lid system in my opinion is up to now is if you didn't take advantage of all that you were able to levy, then you, in many cases, were penalized and so as a result I found in working with several different entities that they always sort of intended...  sort of took the position that they ought to levy the full amount they were allowed to so that they wouldn't in future years be penalized.  And so with the Maurstad amendment, this makes my amendment I think a much stronger piece of legislation and with that I would hope that you would support it.  Thank you.


SENATOR CROSBY:  Thank you, Senator Vrtiska.  Senator Vrtiska has substituted an amendment for the original one that he had introduced.  Any objections?  Seeing none, it is substituted.  (AM2102 appears on pages 2056-57 of the Legislative Journal.) We will ...  Senator Vrtiska.


SENATOR VRTISKA:  Being passed out right now.


SENATOR CROSBY:  Oh, the amendment is being passed out right now.  For discussion on the substituted Vrtiska amendment, Senator Warner.


SENATOR WARNER:  Madam President, members of tile Legislature, at this point I'm going to continue supporting the bill as it was introduced plus the committee amendment.  Again, one can come




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down on any side, I guess.  when one can justify.  And unlike, everybody else, I'm not particularly wild about imposing uniform restrictions across the state knowing every situation is different.  But nevertheless, the times that we are in are here and I'm inclined to be supportive in what I view as a period of transition over the next three, four years of a more narrow limitation.  I know there was an interest however, when I was looking at the blue book that was passed out by the Appropriations Committee where it indicates the growth in receipts from '92 to projected receipts, or not, excuse me, receipts, expenditures and I see from '92 projected through '97 operations is projected at 3.4 percent increase average per year.  That certainly is well below the other state aid side.  However, it's higher, that's 5.2 but the average is 4.4 so on the whole the state budget, at least if we end up with a budget as recommended by the Appropriations Committee, it's not going to be all that far off from the same kind of general :-Imitations that are spoken to in LB 613.  But I would hope at this point at least that the body would be supportive of the concept in LB 613 as introduced plus the committee amendment and.  the Maurstad amendment which has been adopted, it gives a little flexibility at least in terms of not encouraging local governments to increase their budgets merely to maintain their spending authority.  With the unused spending authority authorization it seems like that should discourage the misuse.


SENATOR CROSBY:  Thank you, Senator Warner.  Senator Bernard-Stevens.


SENATOR BERNARD-STEVENS:  Thank you, Madam President, members of the body, again I rise in support of the Vrtiska amendment and just to emphasize a couple points very quickly.  This will be the last time I suspect I'll speak on this particular amendment and that is I think Senator Warner pointed out why the Vrtiska amendment, in fact, makes sense.  If, in fact, you look at the average and the average growth is about 4.5 pet-cent and our range is 4 to 6.5, by us making a change it's not going to make that much difference except for those that are on the upper end for the most part.  What I ...  particularly the points I'd like to make is that if we're trying to extend the 'Lids on the political subdivisions because we want to make some tough policy decision, on property taxes on 93CA, the Vrtiska amendment will do that It will keep the lids on, but it will also add a sense of stability in a very unstable area and that is in school finance Not only have the school districts been hit finally with




May 9, 1995 -- LB 613


100 percent valuation that the Department of Revenue did and gave the Department of Education, they were also hit at the same time with all of the big valuation swings and then all of a sudden now as things are going to begin to calm down just a little bit, we'll change the game again just for somewhere around, and it will be less than that, somewhere around $16 million which if you put that statewide on property tax, I don't know what it would be but it would be somewhere around maybe a three-quarters or a cent to maybe a cent and a half that every person would get.  If anyone could explain to me what the real advantage is in lowering the lid I would be willing to listen.  I haven't heard one yet.  So the Vrtiska amendment accomplishes the main thing of what 613 wants to do and that is extend the lids.  Then it will extend it through the time period that we will be making those major policy debate questions on school finance and we'll be at the same time making that tough question on whether or not we're going to have a levy lid and what those lids are going to be and how they will affect the political subdivisions and at that time I suspect if we go ahead with levy lids, we'll probably want to do all the way with...on the spending side on lids simply because there's no reason to have the lids we have now if you're going to have the lids on the revenue Bide.  So it makes absolute good policy to extend the lids till the time period, make all the decisions that have to be made and keep as much stability as possible in a very unstable area of school finance this upcoming year.  The Vrtiska amendment makes sense, it does not detract from the main part of the bill and by again I'm going to argue that by doing the way the bill is now we're fooling everybody if we tell them it's property tax relief or has something to do with it, it isn't, it's cosmetic, it's pennies and it's not worth the instability it will cause individual school districts.  I think particularly about some of the small rural school districts who have really been, strapped and have really been hurt and all of a sudden now we're going to strap them even more and I just don't think it's fair when we're not gaining anything substantial by that policy change.  The Vrtiska amendment keeps the intent, the heart of 613 and I would urge the body for it adoption.


SENATOR CROSBY:  Thank you, Senator Bernard-Stevens.  Senator Vrtiska, your light is next.


SENATOR VRTISKA:  Well it was just left on, I didn't turn it on.


SENATOR CROSBY:  Thank you, Senator McKenzie.




May 9, 1995 -- LB 613


SENATOR McKENZIE:  Thank you, Madam President and members of the body, I want to address Senator Bernard-Stevens' statements about that this decision to lower the spending .,.id 1 percent is arbitrary and just out of the blue and if it's really meant just to deal with property tax relief.  It is not.  It is based on that statutory requirement that we look at, I'll get it right this time, CPI, and let me give you the percentages of CPI and those changes since 1989 when the lid was put into place, all the lids.  In 1989 the CPI was 4.8 percent so it makes sense that we looked at 4 to 6.5 and 5 for political subdivisions.  In 1990 it was 5.4 percent.  In 1991 it was, let me see if I've got my numbers right, 1991 it was 4.2 percent, in '92 it dropped to 3 percent, in '94 3 percent and in 1995 the CPI was 2.6 percent.  The reason for the suggested reduction in the budgetary lids in LB 613 in the committee amendment is based on the Consumer Price Index and the fact that it has dropped significantly, half, since we implemented these budgetary lids.  That is, in fact, the reason for the reduction of not 2 percent, but 1 percent realizing that that alone would be a significant reduction for school districts and counties and cities.  Nineteen ninety-five numbers are even higher which indicates that 1995 CPI may be even lower than 2.6 percent.  I disagree with Senator Bernard-Stevens that this is arbitrary and all about property tax relief.  Yes, it is to the extent that it's about spending in relation to economic growth and to the fact that.  if we do not address spending while we address revenue issues, then we are only dealing with one side of the problem.  Thank you.


SENATOR CROSBY:  Thank you, Senator McKenzie.  Any further discussion on the Vrtiska amendment?  Seeing none, Senator Vrtiska, you may close.


SENATOR VRTISKA:  Thank you, Senator Crosby, I won't take very long because I think everybody understands the issue here.  As I said earlier, I'm certainly not one who believes that we need to spend more money than necessary in order to conduct- our business in schools, in counties and villages and cities, but I do think there are instances where we are handicapping and in fact we're making it very difficult in some instances for the local entities of government to operate.  And I think no-re importantly and the most importantly in my mind is the fact that I have faith in the majority of the elected officials to not spend the dollars unless they're actually needed.  As I said earlier, I think those who tend to overspend pay the price of being removed




May 9, 1995 -- LB 613


from office which is the right thing to do and so I do leave some faith in the local elected officials' hands to make the decisions about the amount of money that ought to be spent.  And I guess the only other thing that I have to say that if we really and truly, if we really and truly believe that we ought to reduce spending to the level that 613 as it was originally written says, then let's address the issue at the state level.  Let's look at where the big bucks are and let's start talking about reducing their budget down to 3 percent instead of the 4, 5 plus percent that's being spent now and let's get at the real seat.  of the problem.  I realize this is local taxes as opposed to income and sales tax but it's still taxes and it still takes money out of your pocket.  So I guess if we want to really be serious about moving in the direction of making people bite the bullet, I can think of a number of state agencies that can be made to bite the bullet too if we have the nerve and the fortitude on this floor to do that.  .7 just feel like that fair is ...  what's fair is fair, and if we want to deal with the issue totally, then I'm certainly in favor of that, but if we're just going to pick on local entities and say, you guys are big spenders, you people are not responsible so we're going to make you toe the line and I don't think that that's necessary.  I pay taxes too.  I understand what it's like to pay taxes, but we also expect the services that are provided by our local entities and if we don't need those services and don't want them, then I can understand that's a different issue.  But with that I would hope that you would support by amendment and with that I thank you.


SENATOR CROSBY:  Thank you, Senator Vrtiska.  You've heard the closing.  The question is the adoption of the Vrtiska amendment to the committee amendments.  All in favor vote aye, opposed no.  We're voting on the Vrtiska amendment.  Have you all voted?  Senator Vrtiska.


SENATOR VRTISKA:  Call of the house.


SENATOR CROSBY:  There has been a request for a call of the house.  All in favor vote aye, opposed no.  Record, please.


CLERK:  15 ayes, 0 nays, Madam President, on the motion to go under call.


SENATOR CROSBY:  The house is under call.  Would all senators please return to your seats and record your presence- Would all




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senators who are not in the Chamber please return and record your presence and would all unauthorized personnel please leave the floor.  A roll call vote in reverse order has been requested.  Senator Avery, Senator Lindsay, Senator Matzke, the house is under call.  Bromm, Senator Bromm, Senator Chambers, Senator Preister.  Senator Robinson, Senator Hartnett.  Senator Withem, would you like to check in, please.  Senator Robinson, Senator Preister and Senator Avery, the house is under call.  Senator Robinson and Senator Preister, the house is under call.  Senator Avery, would you please check in.  Senator Vrtiska, Senator Preister is the last one and they cannot locate him.  Okay, we will proceed with a roll call vote in reverse order has been requested.  We are voting on the Vrtiska amendment to the committee amendments.  Mr. Clerk, please call the roll.


CLERK:  (Roll call vote taken.  See page 2058 of the Legislative Journal.) 15 ayes, 18 nays on the amendment.


SENATOR CROSBY:  The amendment fails.  I'll raise the call.


CLERK:  Senator Hall would move to amend the committee amendments.  (FA206 appears on page 2058 of the Legislative Journal.)


SENATOR CROSBY:  Senator Hall, to open on your amendment.


SENATOR HALL:  Thank you, Madam President and members, the amendment is handed out to you on the desk.  It is hand-written.  It deals with the Maurstad-Coordsen amendment that was adopted and it addresses the issue of striking the "Auditor of Public Accounts" and inserting "governing body" and then after the balance of the paragraph on line 13 it adds the following sentence, it says, "The calculation of unused anticipated aggregate receipts shall be included in the budget documents submitted to the Auditor of Public Accounts." It just makes the change that we talked about.  Senator Maurstad, as 1 understand it, is in agreement with the amendment.  He has seen it, but he appears to be off the floor right now, but I did draft it to take care of it while we were still on General File and would urge adoption of the amendment but stand ready to answer any questions that folks may have.  Thank you.




PRESIDENT ROBAK:  Thank you, Senator Hall.  Senator Witek.




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SENATOR WITEK:  Madam Chairman, members of the body, I rise in support of the Hall amendment and I have one question for Senator Hall.




SENATOR WITEK:  I assume by all the changes that you've made throughout the year or two years, to the office of the auditor that you will not be running for that office at any future date.


SENATOR HALL:  Oh, don't assume anything, Senator Witek.


SENATOR WITEK:  Okay, thank you.


PRESIDENT ROBAK:  Senator Coordsen.


SENATOR COORDSEN:  Yeah, I would...  I actually punched my light because Senator Maurstad was on personal duties for a moment.  Dave, that's okay, but I do rise to support the amendment.  I think that it reduces substantially the amount of work required outside of the local unit of government and it's a simple calculation and the local governing body ought to be able to do that if their ability, if they have the ability to put together a budget and then with the inclusion of the last sentence that Senator Hall proposes, it does provide a statistical base of developing the information on a cumulative basis.  I give the rest of my time to Senator Maurstad.


PRESIDENT ROBAK:  Senator Maurstad, you have four minutes.


SENATOR MAURSTAD:  Thank you, Senator Coordsen, I also rise in support of the amendment brought forth by Senator Hall and appreciate his diligence in bringing this to our attention and working with us to accommodate this.  Thank you.


PRESIDENT ROBAK:  Thank you, Senator Maurstad.  Is there any further discussion on the Hall amendment?  Seeing none, Senator Hall, do you wish to close?


SENATOR HALL:  Thank you, Madam President and members.  I appreciate the support from folks on the amendment.  It's nice to pass something this year.  But, Senator Witek, now that we have the auditor down to doing relatively little, I might actually be interested in running for that office, but, no.




May 9, 1995 -- LB 613


Really, the purpose behind the amendment is simply to say the governing body does this already.  They're the one responsible for the budget, they ought to submit it.  All we do here, and Senator Jones was just asking if the amendment does not change the issue of whether or not that calculation has to be on the budget documents that are sent to the auditor on an annual basis.  That's exactly what it does.  It requires that that excess or anticipated aggregate receipts be listed so that it's clearly spelled out as a line item in those documents.  I would urge the adoption of the amendment to clarify this amendment that was already adopted to the committee amendments and I would thank you, Madam President.


PRESIDENT ROBAK:  Thank you, Senator Fall.  The-question before the body is the adoption of the Hall amendment to the committee amendments to LB 613.  All those in favor vote aye; all those opposed vote nay.  Please record.


CLERK:  30 ayes, 0 nays, Madam President, on the adoption of Senator Hall's amendment to the committee amendments.


PRESIDENT ROBAK:  The Hall amendment is adopted.


CLERK:  Senator Hall, next amendment, Senator?


SENATOR HALL:  Mr. Clerk, I'd like to withdraw that amendment and have it printed for Select File.


PRESIDENT ROBAK:  It is so ordered.


CLERK:  I have nothing further to the committee amendments at this time, Madam President.


PRESIDENT ROBAK:  The Chair recognizes Senator Warner, to close on the committee amendments.


SENATOR WARNER:  Madam President, members of the Legislature, the committee amendment now as amended would include the Maurstad amendment as amended by Senator Hall's amendment, which extends the unused budget authority to either governmental entities, and then the two amendments to 613 that the Revenue Committee offered was to strike the outright repealer that was in the bill as introduced for the unused school budget authority.  That will be continued as is the current law, and then the second one is it continues to allow the I percent over




May 9, 1995 -- LB 613


the ...  for schools, the I percent over the ...  as the bill was introduced, the 3 to 5 1/2 with a three-quarters vote and there is a minor technical change where 4 percent is changed to 3 in one of the sections to be consistent with the rest of the bill, but that's technical.  So I would move adoption of the committee amendment as amended.


PRESIDENT ROBAK:  Thank you, Senator Warner.  The question before the body is the adoption of the committee amendments to LB 613.  All those in favor vote aye; all those opposed vote nay.  Have you all voted?  Please record.


CLERK:  27 ayes, 4 nays on adoption of committee amendments.


PRESIDENT ROBAK:  The committee amendments are adopted.  The Chair recognizes Senator McKenzie to open on the bill.


SENATOR McKENZIE:  Thank you, Madam President and members of the body.  I will just be very brief because the committee amendments become the bill.  Certainly I think these are difficult times for all of us, and introducing budgetary lid bills is never without controversy, and introducing one that asks political subdivisions as important as schools to spend I percent less is even more difficult, and I had to relate to many of my education friends that it has not beer.  necessarily pleasant for me personally, having been in education and still continuing to work with education.  But I think we also all realize the political winds, and I think we all realize, as Senator Bohlke said, that we will be looking at major changes in the next two to four years in terms of complete reform of the way in which we collect revenues for those political subdivisions that rely on property tax, restructuring, downsizing, all the language we've heard from business in the last five years, but I also believe that it is our responsibility to look for ways to find less spending.  And in light of the fact that the consumer price index does indicate that those rates are going down, that we are at less than 3 percent, there is some logic in looking for 1 percent reduction in the amount that political subdivisions spend.  Again, the bill is now the committee ...  the committee amendments are the bill.  I think we have discussed many of the issues in the first round.  I know we will continue to discuss them on Select File, and we will revisit several of the other pieces, unused budget authority, and the supermajority I percent, as well as some specifics about our other political subdivisions.




I look forward to that discussion and will be meeting with a number of people between now and Select to try to address some of those concerns before we get to second round of debate in order to facilitate our time on the floor.  With that, I would ask your advancement of LB 613, and welcome the opportunity to work with anyone on specific concerns between now and Select.  Thank you.


PRESIDENT ROBAK:  Thank you, Senator McKenzie.  Is there any discussion on the advancement of LB 613?  Seeing none, Senator McKenzie waives closing.  The question before you is the advancement of LB 613.  All those in favor vote aye; all those opposed vote nay.  Please record.


CLERK:  30 ayes, 4 nays on the advancement of LB 613, Madam President.


PRESIDENT ROBAK:  LB 613 advances.  Items for the record, Mr. Clerk.


CLERK:  Madam President, the Revenue Committee would like to meet in Executive Session in Room 2022 now; Revenue Committee in Room 2022 now.  Enrollment and Review reports LB 646A, LB 429, LB 89, LB 89A, LB 311, LB 32S to Select File, some of which have Enrollment and Review amendments attached.  Senator Hall or Senator Vrtiska, amendments to LB 392, Senator Hall, LB 392, Senator Hall to LB 613.  That's all that I have, Madam President.  (See pages 2059-60 of the Legislative Journal.)


PRESIDENT ROBAK:  Thank you, Mr. Clerk.  We turn now to LB 642.


CLERK:  Madam President, 642, a bill originally introduced by Senator Avery and others.  (Read title.) The bill was introduced on January 18, referred to the Health and Human Services Committee.  The bill was advanced to General File.  I have no committee amendments, Madam President.


PRESIDENT ROBAK:  The Chair recognizes Senator Avery.


SENATOR AVERY:  Thank you, Madam President.  I believe there is an amendment filed that would actually replace the bill as it is, and it would be AM1575.


CLERK:  Madam President, there are amendments filed.  Senator Avery, as the principal introducer has AM1575.  (See