Debate Transcripts

LB 1114 (1996)

General File

March 25, 1996

... time I raised concern to Commonwealth depositors that there really was not much prospect of success in pursuing any further claim since we had twice, as a Legislature, passed efforts to resolve that issue and twice had the Supreme Court knock those issues down on constitutional grounds. Yet again an effort was made by John DeCamp to ask and solicit this money from several thousand Commonwealth depositors, and as I understand it, was able to receive somewhere over $50,000, one figure I heard $70,000 to work on the filing of another claim. And here we are, a year later, and no sign of such a claim coming forward. So I'm very concerned about the status of that and the fact that individuals have given hard earned money, difficult to come by in many of these cases, and with no actual consequence to it. So I appreciate the work of the committee. I support the bill. I'm concerned about this one claim and we'll see what happened to it. Thank you very much.

SENATOR HARTNETT: Thank you, Senator Wesely. Senator Abboud, there doesn't seem to be any other lights on. Would you like to close on LB... for the advancement of LB 1391?

SENATOR ABBOUD: Thank you, Mr. President. I would move the advancement of LB 1391.

SENATOR HARTNETT: You've heard the close. Would you vote, please.

SPEAKER WITHEM PRESIDING

SPEAKER WITHEM: Record, Mr. Clerk.

CLERK: 26 ayes, 0 nays, Mr. President, on the advancement of LB 1391.

SPEAKER WITHEM: LB 1391 advances. Mt. Clerk, LB... go to the special order property tax legislation category, LB 1114. Mr. Clerk.

CLERK: LB 1114, Mr. President, introduced by Senator Warner and other members of the Revenue Committee. (Read title.) The bill was discussed on March 21. At that time, the committee amendments and a series of amendments to the committee amendments were adopted. At this time, Mr. President, I have no further amendments to the bill.

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SPEAKER WITHEM: I believe we debated this about six hours the other day. The motion before the body at this time then is, shall LB 1114 be advanced to E & R Initial? Senator Beutler.

SENATOR BEUTLER: Senator Withem, members of the Legislature, Senator Warner, could I ask a couple of questions of you before this moves on? A number of folks, as you might imagine, associated with the Lincoln education system have been in touch with me by one means or another, and, of course, they are very worried this. As you know, the Lincoln levy is about 1.59, which is considerably higher than the statewide average levy of about 1.41, and as you are also aware, and I guess I am, just reminding other members of the Legislature, obviously, you are aware, there are no provisions in the bill with respect to any sort of 'replacement revenue for the school districts. The people in the Lincoln school system, like people I am sure in many other school systems, think they have a real quality education system, and they are extremely worried about the potential destructive effects of this particular bill, long term, in the sense that the only mechanism here by which they can make up any revenues under the current ... under the current bill is to have an election of the people that would allow them to exceed the levy cap for at least a period of five years. Otherwise, if we do nothing in this Legislature, the Lincoln school system will be seriously injured. That's a certainty, if we do nothing. What I wanted to ask you about is the five year limitation on the vote of the people. It occurs to me, and I don't have an amendment up here now, there aren't enough people here to deal with anything that's controversial on the bill, obviously, but it seems to me that the vote of the people that takes you out of the cap for a period of five years might be extended a little bit, since, after all, it is a local decision on the part of the people. That is, why can't the people vote for five years, or six years, or ten years, or fifteen years to exceed the limit, whatever the school district wants to put to them? So I just wanted to ask you quickly, with respect to the decision that five years will be the period for the exception from the cap, why was five years chosen? People are saying to me five years really doesn't allow you to do a lot of (food planning. I mean what teacher is going to be willing to say, well, I can, you know, stick around for maybe four or five years, and then I am going to be rifted again, what sort of stability, for example, does that provide to a system? Is there

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any particular logic to the five-year decision?

PRESIDENT ROBAK PRESIDING

PRESIDENT ROBAK: Senator Warner.

SENATOR WARNER: Madam President, members of the Legislature, the... I would agree, Senator Beutler, that one could I suppose, in a sense, say whatever period of time is, in a sense, arbitrary; that you select some period of time. I would say that the five-year period was ... it's a combination of several things. One would be that it does give some length of time for stability, which would be one of the arguments you have suggested that the longer the period was, why, the more stability. I think the other side of the argument is, though, that if you are going out to...

PRESIDENT ROBAK: One minute.

SENATOR WARNER: ... ask people to support something of this nature that if it is for an indefinite period of time I think there would be greater reluctance to be supportive. This, at least, gives you advantage that you can see the benefits and then again renew it. Obviously, since fortunately we are talking about doing things in statute rather than constitution, those adjustments, if it doesn't work, could be done. The fact that schools have a levy limit is not new. In fact, either shortly before I came or shortly' after I was here, I don't recall which, there were levy limits for school districts by size of school districts, have been in effect for years. We used to periodically adjust them. I know they were periodically adjusted in the fifties, and somewhere along there, they were completely repealed, but ...

PRESIDENT ROBAK: Time. Senator Warner, your light is next. You may continue.

SENATOR WARNER: Thank you, Madam President. But obviously, you know, none of us can predict what the future might bring. I can, I suppose, make just as good a case for the potential for something to be done on the ballot would be far more severe than what we are talking about here from which there would be no out. So, what I envision happening, and I think the Revenue Committee, and I think others who have worked with this, that

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during this two-year period in which we delay the effective date, there is a variety of ... at least two different concepts I know that are in place, one of which is that we will have something similar to the LR 206 approach in which a variety of committees will be looking at the issue over the next two years to make adjustments as it becomes apparent that that might be ... might be appropriate. I know there is ... I think there is going to be efforts that will be looking at the various requirements that are mandates that we have on local government. I saw where the State Board of Education was willing to participate in looking at those kinds of things in that two-year period that could be ... could provide some relief, if that's the right word, from some of those aspects. There is a whole lot of things, it appears to me, that's going to be going on over the next two years that, hopefully, will end with government being restructured with public confidence being lifted. I frequently comment that I believe that much of the comments that we hear of perceptions about government, but, as you well know, perceptions are more difficult to deal with than facts, but you can't sometimes correct the fact with...or correct the perception with fact, where an error you can. I think we need this period to engage people across the state with exactly what they are getting for their tax dollars, what they need to know that there is going to be, through this process, the potential for greater consolidation, cooperative efforts, merger efforts. Their other option is going to be to support a higher property tax levy or to support a merger or consolidation to the extent that that can be done, and I think that is going to be a positive without a mandate of saying how it is going to he done. I visualize a lot of those things occurring that I hope will be, in the long term is going to be beneficial to resolving it. I think it would be an error at this point to suggest that we are going to spell out in a dollar amount replacement revenue. Obviously, one will never enact, I don't think, replacement dollar for dollar, although that concept is one of them that are out there because then no efficiency would occur. But it is hard to say how much, if any, until we've gone through the process of building public confidence. I hope that if those things that can be cost effective have been accomplished, again, the safety net always remains the ability for a local government entity to vote a higher limit, if nothing else happens.

PRESIDENT ROBAK: Thank you, Senator Warner. Senator Robinson.

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SENATOR ROBINSON: Madam President, members of the body, Senator Warner, I would just like to visit with you, a couple of things.

PRESIDENT ROBAK: Senator Warner.

SENATOR ROBINSON: One is the inclusion of the fire district in the IS cent levy. I guess I have a concern that many fire districts, the population of the fire districts exceed the population of many of the villages, and I guess another concern is that a lot of the fire districts go to more than one county, and I'd like to visit with you and Senator Kristensen between now and Select about the possibility of bringing... taking that out of the IS cent levy. If not, we couldn't work that out, I'd like to see us...an amendment for townships and fire districts where they could, instead of voting annually, if they could, say, vote every three years like the villages would, instead of voting annually, as it is in the bill. I'd just like your reaction to that.

SENATOR WARNER: The bill ... the bill, Senator Robinson, Madam President, and Senator Robinson, as the bill is designed, of course, you are talking about that portion that has IS cents for miscellaneous governmental subdivisions.

SENATOR ROBINSON: Right, um-hum.

SENATOR WARNER: In that case, those votes are annually. Across the state generally, you talk about two or four cents for the operation of fire districts. There are a few that are up at the ten or twelve cents, which is the maximum statutory authorization. As a practical matter, in those cases, if their needs cannot be met, you know what is expected to happen is that they would go for a ... because they're in that fifteen cents, they can go the route of a special meeting, which they would, in fact, need 10 percent of their registered voters in attendance of which 51 percent of that number could adopt. It would be an annual event, similar to ... I guess we always use the old Class I school concept, because that's how they used to work,. and they worked fairly satisfactorily. But the other thing is, the same response I gave to Senator Beutler, and that is in this two-year period, if we have a similar concept, you know this doesn't take effect till July of 1998, two legislative sessions, and what became apparent to me unless we had a goal out there similar to 1114, many of these issues that we want to talk about, you just

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simply couldn't get anyone to sit down and look at what realistically could be done. I think you've got to have a goal,

such as this, to get the kind of conversations or discussions that are needed to meet the issue, such as what you are bringing up. The alternatives, there is an allowance, there is a solution in the bill as it is now. If that's not adequate, then, again, that's the kind of thing I hope we'd look at during the interim. In this case it would be the Government Committee that would be looking at that.

SENATOR ROBINSON: So what you are saying is that we could look at that next year, then, is that what you are saying, those situations I mean?

SENATOR WARNER: I'm... I'm indicating, Senator, that I think anybody that has dealt with this, as virtually all the committees that dealt with the LR 206,...

PRESIDENT ROBAK: One minute.

SENATOR WARNER: ... know that there are issues that come up, that have come up. We've addressed many of them, there is a solution in it, but we also recognize that over the next two legislative sessions, we are going for fine tuning, looking for the unintended consequences that we haven't thought of in order to address those. I firmly believe if we don't have this goal, then nothing is going to happen, and something you know, whether it is petitions or continued unrest generally, you know I don't know what it is going to be but I think the unrest is not going to go away until we've got a structure that people are sitting down across the state and looking for other options.

SENATOR ROBINSON: Well, I guess I don't think these two issues would cause much...causing people to go sign the petition...

PRESIDENT ROBAK: Time.

SENATOR ROBINSON: -amendments. Thank you. I'll consider your thoughts, too, Senator Warner. Thank you.

PRESIDENT ROBAK: Thank you, Senator Robinson. Senator Beutler.

SENATOR BEUTLER: Madam Lieutenant Governor, members of the Legislature, just let me make one more series of comments on

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this particular bill, and that's it for me. And, again, I want to reiterate that I very much appreciate this whole 206 process and everything that has happened. I feel very content with most everything that's in the set of bills with the exception of leaving the schools hanging out there with absolutely no replacement revenue. Now with respect to the mechanism that allows for a vote of the people to exceed the levy for five years, if that's what it ends up being, if that's what ends up being the only protective mechanism built into this, then I guess on Select File I'll be reopening debate ... debate with regard to the ... with regard to what is the appropriate period of time. Because I don't think, in terms of public credibility on this measure, that whether it's five years or ten years or fifteen years or left to the vote of the people permanently, I don't think that's going to change people's minds out there. I think if they think that they can vote on this, whether it is five years or ten years, that's going to be satisfactory with the people of the state. I guess I'm only willing to go too... so far in doing the irrational for the purpose of satisfying the irrational. That is, what the committee seems to be saying to us is that the feeling out there is not entirely rational, which I think is in large part true in consideration of the fact that total state and local taxes since 1970 as a percentage of personal income has not increased in this state, but to the extent it is irrational, I still feel great hesitancy and qualms about myself doing the irrational, and also in doing the irrational putting at risk the school system in the sense that we all know in here today that to avoid the destruction of the school systems there has to be replacement revenues. Now there are 20-some of us up for election this year who don't want to talk about replacement revenues, and there are 20-some of us up for election in two years that don't want to talk about replacement revenues. And I guess I am still going to think about and talk to some people about the practicality or the need or desirability of building in to this bill somehow some commitment to or some actual replacement revenues, not nearly enough to replace what is being taken away from the school districts, but something that represents some kind of safety net and represents some kind of political sharing, shall we say, amongst the members of the Legislature, who are going to be called upon to make some hard decisions in a year or two, if not, if not this year. So having said that, I guess I have said quite enough on this bill, and I am sure we will all be hearing from a variety of constituents between now and Select File, and

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we will see how it goes down. Thank you.

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

SENATOR VRTISKA: Thank you, Madam President, members of the body. Senator Beutler, I appreciate the comments you made. We talk about irrational. I just wanted to tell you that over this past week, I've had a lot of discussion with a lot of city administrators and school superintendents, as well as a lot of taxpayers. And when we discuss irrational, we wonder who is irrational in this process because what I'm hearing from most of the people that you are talking about are certainly concerned about the future of education, as well as I am, but when you take into account, I live down in an area where across the river land taxes are a third less or two-thirds less than they are in Nebraska and those people are upset and wonder why there can't be some adjustment, and this bill to me, in some way, addresses that issue. But I truly believe that what is built into the bill, where there is an option for those who feel they have been unjustly attacked with the lowering of their levies have the option, certainly, to do that. And I am in firm belief, as Senator Warner has indicated, that certainly over the next two years, we will have an option to make some fine tuning, and I guess what really bothers me is if we, in fact, don't want to carry forth with something serious from this body that certainly some of those with constitutional amendments out there will certainly do a greater attempt to do that, and I don't think that's in the best interest of the school districts or the cities or anyone else. I'd hope we could work our way through this thing, and as close to its present form as we can to demonstrate that we are serious about trying to resolve the tax issue. But I concur with you that we probably need some type of a attitude and some way express that we do intend to allow some of the replacement because I can assure you that some of these schools are being hit pretty hard, as you well know. So I guess it's a case of, I guess as has been expressed before, damned if you do and damned if you don't, but what it comes down to is we need to do something in order to express our concern about responsibility to the taxpayers, as well as responsibility to the school districts and the other entities of government who are being affected by this type of legislation. I think there is a desire-among a great many people in this body to do what is the fairest and still accomplish the end of reducing some of the property tax load that is being borne at the present time by

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many of the taxpayers in this state. And I don't ... I don't think there is any argument there or we wouldn't be hearing as much noise as we are about people's dissatisfaction with the way the support of our schools and our other various entities of government is now being done. So somewhere there has to be a happy medium, and I think that's what we're working toward and still ... and still get some legislation that will not, in fact, destroy the school systems and et cetera, but will, in fact, encourage, as Senator Warner has said so often, encourage some efficiency, perhaps some consolidation of services, and other things that can go a long way towards eliminating some of the tax burden that we are now faced with. So with that, I just wanted to make those comments for or the record because ...

PRESIDENT ROBAK: One minute.

SENATOR VRTISKA: ...I think they're important, and I do think that we need to continue to understand that this is a case of where if we don't want to do anything, somebody else will, and that may not, in the long term. As I told a friend of mine the other day when he was asking me about the signature on a petition, I said, that's fine, but just remember what it does. Read the fine print and make sure that when you're ready to bring some of these things back to a vote in a short time if you are not satisfied. The way we're doing it, it doesn't have to go to a vote, only here in the Legislature. With that, I thank you.

PRESIDENT ROBAK: Thank you, Senator. Senator Elmer.

SENATOR ELMER: Thank you, Madam President. I was interested in Senator Beutler's comments about the irrationality. Is it rational for an agricultural person to be upset when his property tax have increased ... has increased four and fivefold in five years, and his income has not? Is it irrational for a homeowner whose value of his home has, in his eyes, irrationally increased, be paying two and three times as much tax as he was four or five years ago? That's not rational. And it is rational for people to seek a change. It is rational to see if we can't make more efficiency reign among our school districts, among our county and local governments. I do agree that the reductions in the mill levies are apparently going to 'penalize, but that is only if the people out there choose to do nothing. We need to have the people look reasonably and rationally at

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what this rational thing is going to do, look at the bottom line, and think about the tax dollars that are being spent irrationally, when they could be very rationally being spent by a reorganization that puts aside old personalities, old grudges, and old ideas about I don't want to get along with those people in the next town or the next county. It doesn't make sense. This does. I certainly hope that we will advance LB 1114 and do the things that we are contemplating and carry them forward without having second thoughts. Thank you, Madam President.

PRESIDENT ROBAK: Thank you, Senator Elmer. Is there any further discussion on the advancement of LB 1114? Seeing none, Senator Warner to close.

SENATOR WARNER: Thank you, Madam President, members of the Legislature. Again, just briefly, I think this is viewed as a goal that we're striving for. As I indicated. we all know there is going to be a lot of activity over the next two years as we begin to review what can be done in the way of bringing about more cost-effective operations through the process that is envisioned in the bill, and I'd ask the bill be advanced to Select File and we will continue to work on it.

PRESIDENT ROBAK: Thank you, Senator. The question before you is the advancement of LB 1114. All those in favor vote aye; all those opposed vote nay. Please record.

CLERK: 25 ayes, 2 nays, Madam President, on the advancement of LB 1114.

PRESIDENT ROBAK: LB 1114 advances. LB 299.

CLERK: Madam President, 299, a bill originally introduced by Senator Warner. (Read title.) The bill was introduced on January 10 of last year, at that time was referred to the Revenue Committee. The bill was advanced to General File. I do have committee amendments pending, Madam President. (Standing Committee amendment, AM3654, was printed separately and referred to on page 1167 of the Legislative Journal.)

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

SENATOR WARNER: Madam President, members of the Legislature,

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