Debate Transcripts
LB 1114 (1996)
Select File
April 2, 1996
... vehicles. Essentially what it does, it would limit the distribution of those funds and would be required to distribute those funds to the cities, counties, school districts, and villages. But it is an important part of the whole concept of trying to make government more cost-efficient and needs the support of the body. I would trust that the discussions earlier this afternoon, that you would not look on it as a, a split, at least I can only speak for myself. It was a policy issue. And while I would perhaps personally like to vote sentimentally, it's a matter of constitutional law it did not accomplish, could not accomplish what it was envisioned, and would take a totally different approach to do that. For those reasons I would hope you'll put that argument aside and vote on the merits of the bill, what's in it. Thank you.
PRESIDENT ROBAK: Thank you, Senator Warner. The question before the body is the advancement of LR 292. Senator Chambers requested a roll call vote. Senator Pedersen, will you check in. And we're waiting for Senator Matzke. Again, the question before the body is the advancement of LR 292. Mr. Clerk, please proceed with a roll call vote.
CLERK: (Roll call vote taken. See page 1784 of the Legislative Journal.) 38 ayes, 1 nay on the advancement, Madam President.
PRESIDENT ROBAK: LR 292CA advances. I raise the call. LB 1114.
CLERK: May I read some items prior to that, Madam President?
PRESIDENT ROBAK: Yes, Mr. Clerk.
CLERK: Your Committee on Enrollment and Review reports LB 901, LB 1205, LB 1322, LB 1373, LB 1391 as correctly engrossed. Enrollment and Review also reports LB 1190, LB 1190A, LB 29, LB 29A, LB 1055A, LB 1076A, LB 1322A, LB 1226A, all to Select File. I have a confirmation hearing report from the Education Committee; new resolution by Senator Pirsch (LR 464) to be laid over; Senator Dierks, amendment to LB 108; Senator Landis, to LB 750; Senator Bromm, to LB 1375. (See pages 1784-91 in the Legislative Journal.)
Senator Maurstad, I have Enrollment and Review amendments, first of all, Senator, to LB 1114.
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PRESIDENT ROBAK: Senator Maurstad.
SENATOR MAURSTAD: Madam President, I move to adopt the E & R amendments to LB 1114.
PRESIDENT ROBAK: Is there any discussion? Seeing none, all 1 those in favor say aye. All those opposed, nay. The Chair is in doubt. I'll ask the question again. All those in favor of the Enrollment and Review amendments to LB 11 ... there has been a request for a machine vote on the Enrollment and Review amendments. The question before the body is the adoption of the Enrollment and Review amendments to LB 1114. All those in favor vote aye; all those opposed vote nay. Please record.
CLERK: 27 ayes, 1 nay on the adoption of the Enrollment and, Review amendments.
PRESIDENT ROBAK: The E & R amendments are adopted.
CLERK: Senator Warner would move to amend with AM4265. (See pages 1791-95 of the Legislative Journal.)
PRESIDENT ROBAK: The Chair recognizes Senator Warner to open on his amendment.
SENATOR WARNER: Madam President and members of the Legislature... oh, I guess the amendment is just being handed out. I didn't realize it was coming up first. What this amendment does, it's been discussed I think somewhat in a general sense. But we talk of establishing a council at the local level, and what this is called, a council on public improvement and services, that could be created in each county by... as drafted by a resolution of the county board. And the purpose of that council then is to bring... it's not limited, but bring together at least one elected official from each school board, county board, incorporated city and villages, natural resource district, community college, educational service unit, hospital district, airport authority, fire district, township taxing property, within those counties and it has a variety of purposes. And this will begin to take effect this year. But it's to provide two or three different things. In part, some of these entities would be local governmental subdivisions that's within the 15 cents that county boards can allocate. So there
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would be early on opportunities for discussion of what those different levies...budget requests might be, and levies that might be necessary and, in that process, begin to explore the issues, if there should be issues as a result of that, and start to work through those. But more importantly, the existence of these councils are to begin to have the kind of discussions. I think Senator Beutler was talking about this the other day too, as well, where we begin to have discussions of between these variety of entities of those programs and activities that they could be cooperatively working together and begin to devise and begin to have discussions, and begin to devise different approaches which would help in restructuring and making local government more ... more cost-effective. Included would be, at an appropriate point, the....your county clerks would be provided to them the information as to what the levies would be, in keeping with the provision in LB 1085 where levies are adjusted to reflect valuation. It would include discussions then of those things that could be done in the way of public services in an effective and coordinated manner. It's not mandatory that they meet, but I would anticipate that every county would want to begin to have those kind of discussions. The other provision is an amendment that was in the original committee amendment but was left out. It's one that we're all familiar with, and that is the requirement on school districts with levy limits that allowance is made for the impact area of those school districts that are affected by that, so that the provisions of the bill would not impede the ability of those federal funds to be accrued to those districts that are entitled to it. And that provision was adopted by the committee, but inadvertently was left out of the original committee amendment. But that's the purpose of the amendment is to begin this discussion at the local level of the those things. A variety of entities can begin to look at doing cooperatively, I think the type of thing that Senator Bohlke was talking about in an area whore there was joint use of facilities for a variety of purposes. And this is ... is hoped that this will kind of provide the vehicle for those things to occur. It's not a ... it's not mandatory, but I would envision that these kinds of discussions would begin to take place in every county across the state.
PRESIDENT ROBAK: Thank you, Senator Warner. Senator Schimek announces that the following guest is visiting the Legislature, Senator Schimek's mother, Ib Rebman, is here from Lincoln. She is sitting under the north balcony. Mrs. Rebman, would you
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please stand and be recognized? Welcome to the Legislature. Mr. Clerk.
CLERK: Senator Warner, I now have an amendment to the amendment from yourself, AM4298, Senator. (See page 179S of the Legislative Journal.)
PRESIDENT ROBAK: The Chair recognizes Senator Warner to open the amendment to the Warner amendment.
SENATOR WARNER: Madam President, members of the Legislature, this is to change one word. Mr. Clerk, could I ask you what the line is on the amendment that we... it changes elected official to the governing board, but I forget the line. Could you read me the line that is amended in that?
CLERK: You wan t me to read the amendment? Is that what you want?
SENATOR WARNER: It's very short, just the line is what I need.
CLERK: Page one, line 13.
SENATOR WARNER: Line 13?
CLERK: Right.
SENATOR WARNER: Okay. Down there where it says, one elected official, it changes it to one elected... a member of the governing board. Is that correct, Mr. Clerk? I don't have it in front-of me.
CLERK: I'm sorry, Senator..
SENATOR WARNER: What is the ... it struck an elected official and said elected... a member of the governing board. Is that the correct?
CLERK: It says, after the word "official", insert "from the governing board".
SENATOR WARNER: From the governing board? Okay. This was to make sure that the official was a member of the governing board and not just any one of the elected officials. Now I have it in
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front of me, thank you. I'd move the adoption of the amendment. It just clarifies that the elected official should be a member of the governing board, from each of those political subdivisions. I'd ask that amendment be adopted. It's not substantive.
PRESIDENT ROBAK: Thank you, Senator Warner. Senator Hillman, do you wish to speak to the Warner amendment to the Warner amendment to LB 1114? Senator Hillman.
SENATOR HILLMAN: Yes. Madam President, members, I think it's important that we realize why the change and why the amendment here in that what we're looking for on this committee, which I fully support, it's only one of many things I think that we're going to need to do to help facilitate the kind of changes we want to see on a local level, and would hope that there would be more things in the future that we could do to assist. But this would basically... the way it read before, it was any county official. If it were an administrative official, there would be... if they chose not to go, they wouldn't have to go. The fact that they were appointed didn't mean that they would have to attend, and I think it's important that you have as a part of this committee one of the governing board, one of the policymakers in the county to represent the county, and that's why I would support the Warner amendment to the amendment.
PRESIDENT ROBAK: Thank you, Senator Hillman. Senator Kristensen, to speak to the Warner amendment to the Warner amendment. Senator Beutler, to speak to the Warner amendment to the Warner amendment.
SENATOR BEUTLER: No.
PRESIDENT ROBAK: Senator Wickersham, to speak to the Warner amendment to the Warner amendment. Seeing no further lights, Senator Warner, to close. Excuse me, Senator Robinson, did you wish to speak? No. Senator Warner, to close on the Warner amendment to the Warner amendment to LB 1114. Closing is waived. The question before the body is the adoption of the Warner amendment to the Warner amendment to LB 1114. All those in favor vote aye; all "hose opposed vote nay. Please record.
CLERK: 25 ayes, 0 nays, Madam President, on adoption of Senator Warner's amendment to his amendment.
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PRESIDENT ROBAK: The Warner amendment is adopted.
CLERK: senator Beutler would move to amend the Warner amendment. (See FA607 on page 1795 of the Legislative Journal.)
PRESIDENT ROBAK: The Chair recognizes Senator Beutler to open on his amendment.
SENATOR BEUTLER: Madam Lieutenant Governor, members of the Legislature, this is an amendment that would do simplythis, this particular council that is created, which presumably is for everybody's benefit who's levying taxes within this particular area. It can be created within each county or with adjoining counties by resolutions of county board, and under the current amendment, by no other mechanism. So as I understand that, if the county, for some reason, is not particularly excited about talking to all these little rural fire districts and the school district and everybody else about the levy and discussing the whole thing, there's nothing that can be done about it. There simply won't be one of these things created. It seemed to me that there ought to be an alternative mechanism that you could bring and create this kind of council if enough of the other districts in the particular area were interested in creating it. In fact, act, they have perhaps more of an interest in it than the county does since the county controls, the levy for most of those districts. And BO what my amendment says is that if three or more of those kinds of taxing entities that are located within the county, three or more separate categories of taxing. entities within the county., request that the council be created, then it ,can also be created by that mechanism. And I think that that further encourages the existence of these councils because... and I think in most all cases, either the county or those that are being governed by the county will want to create this council whereby they can discuss their problems. So that's all it does. It's an alternate mechanism for creating the council with the hope that each and every county will have such a council. So if you have three rural fire districts that want to create one of these councils, that wouldn't be allowed under the mechanism. But if you had a fire district and a school district and an airport authority who wanted to create the council, then by joint resolutions, they could do so. Everything else would be the same. Only an alternative mechanism for creating the council. Thank you.
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PRESIDENT ROBAK: Thank you, Senator Beutler. Senator Robinson, to speak to the Beutler amendment to the Warner amendment. Senator Kristensen, to speak to the Beutler amendment.
SENATOR KRISTENSEN: Thank you, Madam President, members of the Legislature. Senator Beutler, I've not seen the amendment, but from your discussion and description of it, I ... I don't think I have a problem with doing that. I'm... I think this is one of the pieces that, as we've gone along with this debate, has become not only necessary, but I think actually will set the tone for some things to come in the future which I think are very positive, and they're like this. First of all, this council, if it does meet for the first time, allows the public the opportunity to go to a meeting where there's a possibility of all of the property tax users to meet at once and to explain how their piece fits into the entire puzzle. And it's much easier, quite frankly, if you are interested in what's happening with my property tax, if you can go to this meeting and at least get some flavor for what all the different budgets are, how they fit together. This isn't a matter of where you could be snowed and say, well, we've got to do this, we've got to do that. it's a matter of seeing the entire picture, and that's very good. The other part is that the opportunity for these groups to meet together... and that's the reason I ... your suggestion is fine for me, and I don't know about the other members of the committee, but this is the place where the discussion about consolidation will begin, where they're sitting around, wringing their hands, saying, what are we going to do with these levy limits? The first meeting is going to be fun to be at because they're all going to have the-same reaction, what in the world are we going to do? Through that discussion is where people begin to say, well, you know, we've always talked about it, but... or, I've always thought of this, but maybe we could get together and do this. This is the seeds to the beginning of doing these consolidations and efficiencies. Is this going to save $400 million of property tax? Of course not. But it will give you the opportunity, and so with that I'm going to look at it. Is it a hand-written one, Senator Beutler? And that's fine. I'll find it, but I think that I'll support what you're doing because I think it complements the concept we have out here, and I would hope that these smaller towns and the counties and the schools would see this as a real opportunity to come together. The county clerk is going to have to put some information
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together but it's nothing that they don't have already. And I think it really has the potential for being something positive when it comes to consolidations, but I think it also is good for the public and it will make it easier for the press to report as well, about what all the various levies are, and for people to see, how does my property tax go together, something that they really miss, at least from the side of the levy side and not the valuation side. So with that, I would support the Beutler amendment and urge also the adoption of the Warner amendment.
PRESIDENT ROBAK: Thank you, Senator Kristensen. Senator Wickersham, to speak to the Beutler amendment. Senator Wickersham. Senator Warner, to speak to the Beutler amendment.
SENATOR WARNER: Just briefly, Madam President, to say a word of support. I think obviously the fact that the council could be formed in this way, as well as by the governing board, would ensure that if there is reluctance to do it, those governing boards that are affected end could bring it about, I think it's probably a good safety measure, and would urge the body to support the proposed amendment.
PRESIDENT ROBAK: Thank you, Senator Warner. Senator Lynch, to speak to the Beutler amendment.
SENATOR LYNCH: Lieutenant Governor Robak and members, could I ask Senator Beutler a question when he gets back? While we're waiting for him to come back, I'll just... sing you a song? I mention this in the process of asking the question. In Douglas County, we've got 170 or 180 subdivisions of government. We've got over 100 SIDs and 6 or 7 cities or villages,. 11 or 12 school districts and fire districts, hydrant districts, educational service units, et cetera. Do I understand right now, the way the-system would work, is that if any three of those got together, that they would have to be independent, different kinds of units of government, like it had to be a city or a county or an SID or a hydrant district? Any three of those got together, they could.. they could cause this kind of a exercise to begin?
SENATOR BEUTLER: Yes.
SENATOR LYNCH: And what you're suggesting is that, for example, if neither the cities or the counties or the educational service
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units or the school districts or anybody did it, three sanitary improvement districts could get together, because they levy a tax, and do the same thing? Is that what your amendment does?
SENATOR BEUTLER: Let me see if I ... I I understood you, Senator. Three sanitary improvement districts getting together could not do it because they're not the same type of political subdivision. But three different ...
SENATOR LYNCH: Well, they're the same kind of subdivision.
SENATOR BEUTLER: I'm sorry, because they're not different types of political subdivisions.
SENATOR LYNCH: Oh, I thought you said that.
SENATOR BEUTLER: I misspoke I think.
SENATOR LYNCH: Okay. Good enough.
SENATOR BEUTLER: But if there were three different types of political subdivisions, then, in fact,. they could, the idea being that I'd like to encourage these things to exist.
SENATOR LYNCH: Okay. So an SID, a fire hydrant district and a city could decide to do it and it'd be done? Okay. Just so everybody remembers that all of these subdivisions in Douglas County and all of the counties you represent as well are the same because counties are a creature of the Legislature as we've discussed already today. They can do no more or no less than what the law allows them to do, but one of the things they do is to accept the budgets from all of these in Douglas County, 170-plus subdivisions, and then develop the levy that will have to be established against the property taxpayers for that particular responsibility in that particular special or general purpose government. And then... and then they also bill that taxpayer for as many as five or six, in cases eight, of those subdivisions of government. So I was curious if three SIDs could do it by themselves, but it would take three ... the bill doesn't...I'm sure in all counties ... and I know of one school district. Senator Bromm at one time, in Saunders County, had 45 school districts, for example, so one of the 45 couldn't come together. It would have to be somebody else. So, fine. Thank you very much for your explanation.
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PRESIDENT ROBAK: Thank you, Senator Lynch. Senator Robinson, to speak to the Beutler amendment.
SENATOR ROBINSON: Madam President, members of the body, Senator Beutler.
PRESIDENT ROBAK: Senator Beutler.
SENATOR ROBINSON: I need further explanation of... okay, the three different subdivisions get together. Then what happens? I ... I meant, would you care to answer that for me?
SENATOR BEUTLER: They would... they would simply pass a joint resolution. All pass the same resolution, asking for the creation of the council, and then the council ...
SENATOR ROBINSON: Which would be ... which would be like in Senator Warner's amendment then? Is that right?
SENATOR BEUTLER: Right. I'm...
SENATOR ROBINSON: Okay.
SENATOR BEUTLER: Senator Warner's suggestion for the council or whoever it is.
SENATOR ROBINSON: Just another way of getting the council to...
SENATOR BEUTLER: I'm trying to build a piece on that...
SENATOR ROBINSON: ...be that ...
SENATOR BEUTLER: ... would allow those people who are really going to be affected by the county's action in setting these levies. You know, some of these entities may not get much money.
SENATOR ROBINSON: Yeah.
SENATOR BEUTLER: So I'm giving them the ability to be sure that there at least is this council where they can talk about how much money...
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SENATOR ROBINSON: Right.
SENATOR BEUTLER: ...they're going to get and that sort of thing.
SENATOR ROBINSON: So they would have the authority to call the meeting is basically what you're saying then or ...
SENATOR BEUTLER: Yeah. If... I've got some other questions about how this council is designed to work, but at ...
SENATOR ROBINSON: Yeah.
SENATOR BEUTLER: But at least there could be a meeting where they could discuss it, even if they county didn't think it was...they wanted to do it.
SENATOR ROBINSON: I'll give the remainder of my time to Senator Lynch.
SENATOR LYNCH: Thank you very much, Senator Robinson and Senator Beutler. As we have already mentioned, the counties now establish what those levies will be for tax purposes. What will happen now is that this ... this group of governments will make that determination as to what kind of levy they have to function. I'm kind of curious about it. If that's true then, what about that fundamental and, in fact, long established constitutional responsibility the counties have, in the case of Douglas County, the Douglas County Board to establish those levies?
SENATOR BEUTLER: Senator, as I understand the council amendment, it doesn't transfer any authority whatsoever. The county's still ultimately in control. And that's the reason why I think the other little districts, if they want to form this council and have a forum for discussing their levies with the county, they ought to be able to do so because nothing in the bill is changed with regard to the county's authority. Even if they have this council and they all meet and they all complain about what the county is doing, and the county is still going to be able to go ahead and do just that, if that's what seems to be the...the thing they deem to be appropriate.
SENATOR LYNCH: Okay. I appreciate that. What I'm curious
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about is that it's pretty odd that we set limits or caps on spending, I'm assuming there'd be some correlation between the caps and the historical difference between the subdivisions and the amount of money that's. able to be developed for their functions. I can see some real problems where if a subdivision of government, a special purpose government in particular, comes up with a tremendous budget; for example, if some SID would want to build a golf course, Lord forbid, and they would need an awful lot more money to be able to do that. They think they have enough valuation to justify that based on their special district. But if somebody else would say, well, that wouldn't be fair to the other special districts, in fact, that you in fact compete with, then we won't allow this to happen. One little example of how I can see where someone carrying out that responsibility other than the county board could be and could cause some interesting problems.
PRESIDENT ROBAK: Thank you, Senator. Senator Kristensen, to speak to the Beutler amendment. Senator Kristensen.
SENATOR KRISTENSEN: Thank you, Madam President, and members of the Legislature. Senator Beutler, after just reading it, and I think I understand your intent. I just want to make sure what we're doing. When you talk about a resolution passed by at least three different types of political subdivisions, are those types referring to the other already listed groups that are in the Warner amendment which would be the service unit, the community college, the hospital district, the airport authority, the fire districts, et cetera? Or would it be an expanded. list from that group that's already listed there?
PRESIDENT ROBAK: Senator Beutler.
SENATOR BEUTLER: Senator, to be honest with you, it meant... I intended it to mean any political subdivision that could be affected by a county's decision.
SENATOR KRISTENSEN: Okay, so ... and here's the reason I ask, and it's not mischievous, it's just I want to make sure that ...
SENATOR BEUTLER: Yeah.
SENATOR KRISTENSEN: ...when we go to explain this, I understand it. If I have three cemetery districts, you know, our little
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county cemeteries, could they all vote together to cause this to Occur, or would they be different types?
SENATOR BEUTLER: They would not be different types.
SENATOR KRISTENSEN: Okay.
SENATOR BEUTLER: One of them could participate ...
SENATOR KRISTENSEN: Okay.
SENATOR BEUTLER: ... in such an activity.
SENATOR KRISTENSEN: And that's helpful.
SENATOR BEUTLER: Okay.
SENATOR KRISTENSEN: So ... but you could get, like the cemetery together with the county museum and the ag society, and have the meeting?
SENATOR BEUTLER: Theoretically, yes.
SENATOR KRISTENSEN: Okay. And that's the reason I guess I want to flush out what the types are. Your intent is that everybody that has some property tax dependence could have the opportunity to call this council together? Now whether they showed up or not is another issue.
SENATOR BEUTLER: Yes
SENATOR KRISTENSEN: Okay. Thank you.
PRESIDENT ROBAK: Thank you, Senator Kristensen. Senator Warner. Seeing no further lights, Senator Beutler, to close on your amendment.
SENATOR BEUTLER: Senator (sic) Robak, members of the Legislature, again all this does with respect to the discussion group... really that's what it is, the advisory group that's being created which we call a council ... under the amendment as drafted, only the county could call that council into existence. If you adopt my amendment, you will allow those different political subdivisions that are now controlled by the county to
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also, if there are three of them in different types of categories, such as a rural fire district and a school district and a city, if any combination of three want to create the council and the county has not done so, then they too can bring into existence this council which will form the discussion group for the overall expenditure of real property taxes in that particular area. And the reason for that is simply because ... especially with regard to those districts that the county ... where the county controls their levies, it's especially important, I think, that they have some mechanism or vehicle by which they can discuss at some length with the county and with all the other political subdivisions in the area what their particular problems are and what their particular needs are. So even if the county, in the end, will continue to control the levies, which they will, even with my amendment, at least they have a forum for some extended discussion on their needs. Thank you.
PRESIDENT ROBAK: Thank you, Senator Beutler. The question before the body is the adoption of the Beutler amendment to the Warner amendment to LB 1114. All those in favor vote aye; all those vote opposed vote aye. Have you all voted? Have you all voted? Please record.
CLERK: 27 ayes, 0 nays, Madam President, on the adoption of Senator Beutler's amendment to the amendment.
PRESIDENT ROBAK: The Beutler amendment is adopted. Is there anything further on the Warner amendment?
CLERK: Nothing further on, the Warner amendment.
PRESIDENT ROBAK: Return now to the discussion on the Warner amendment. Senator Wickersham.
SENATOR WICKERSHAM: Thank you, Madam President. I rant to call the body's attention. Senator Warner rightfully in his opening focused on a couple of the provisions of the amendment that you have before you. There are two other provisions that I want to call to your attention. Those are. the provisions of Section. on ... what would be numbered Section 27, and would be numbered Section 28. If you read through all of that rather dense language, you will see that what is happening is that the special levies that municipalities could impose for the support
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of police and fire pensions in first class cities are being placed expressly within the 45 cent limitation. Arguably, if we did not alter the language, the levies for those particular purposes could fall outside the 45 cent levy limitation. No intention to do that. I think that was largely a matter of oversight in the original drafting. There is other language being struck on page 36 of the amendment ... or on page 36 of what is now the E & R amendments, and that also places any required levy for the payment of judgments inside the 45 cent limitation. Those are rather technical aspects of the amendment, but they perhaps have substantive effects that may be of concern to one or more of you. The pension... in particular the pension requirements, of course, are dictated by the statutory provisions. Those are dependent on the salary levels that are paid for firefighters or policemen in first class cities. So to that extent, they are a cost to the municipalities like others that must be borne, and this simply puts those costs within the limitations that are generally imposed at the 45 cents.
PRESIDENT ROBAK: Thank you, Senator. Senator Robinson. Is there any... Senator Chambers. Sorry, Senator. Is there any further discussion of the Warner amendment? Seeing none, Senator Warner, to close. Closing is waived. The question before you is the adoption of the Warner amendment to LB 1114. All those in favor vote aye; all those opposed vote nay. Please record.
CLERK: 25 ayes, 1 nay, on the adoption of Senator Warner's amendment.
PRESIDENT ROBAK: The Warner amendment is adopted.
CLERK: The next amendment to the bill is by Senator Chambers.
PRESIDENT ROBAK: The Chair recognized Senator Chambers.
CLERK: The Chambers ... Senator, this is one that I believe you... I was going to say, you may have offered this on General File and asked to pass over at that time.
SENATOR CHAMBERS: Mr. Clerk, does it have to do with what would be considered intangibles or unearned income?
CLERK: Yes, sir, it does.
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SENATOR CHAMBERS: I want to withdraw that.
PRESIDENT ROBAK: The amendment Is withdrawn.
CLERK: Senator Beutler, AM3927.
PRESIDENT ROBAK: The Chair recognizes Senator Beutler, to open on his amendment.
SENATOR BEUTLER: AM3927, Mr. Clerk?
CLERK: Yes, sir.
SENATOR BEUTLER: Mr. Clerk, is that the one cent sales tax?
CLERK: I believe it is It says dedicate one percent of the sales tax levy.
SENATOR BEUTLER: Yes, I'll pass over that ... or withdraw it.
PRESIDENT ROBAK: The amendment is withdrawn.
CLERK: Next amendment, Senator Beutler, AM4002.
PRESIDENT ROBAK: Senator Beutler.
SENATOR BEUTLER: Which one is that, Mr. Clerk? Could you...
CLERK: Page 4, line 5, strike "five" and insert "ten".
SENATOR BEUTLER: Okay. Madam Lieutenant Governor, members of the Legislature, this amendment is ... is very simple and small, and I'm not going to take much time with it, but I think it's worthwhile. It has to do with the elections by which you can escape or ask your constituents to allow you to go beyond the levy cap. Right now in the bill the way it is, you have to have a vote of the people. I'm especially concerned about the school districts. You have to have a vote of the people to go beyond the levy cap. That means, in Lincoln, for example,- where the levy is going to drop from 1.59 down to I eventually here, they would...they're going to have to go to the people if there's no other mechanism provided. Otherwise, the school district is going to be ... destroyed is a little too strong a word, but it's
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going to deteriorate seriously. If they go to a vote of the people under the present mechanism in the bill, the vote is good for five years. Well, I think that the people ought to be able to say, that you can. exceed this levy cap as long as ... as the people say you can exceed it. But if we're going to have some kind of cap, I would like to at least have this amendment which says that when they vote, it's good for ten years, not five years. Or, if the school district wants to do anything less than ten years, nine years, eight years, if they want to do three or four years, they can do that. But what I'm hearing from the people I've talked to is that it's going to be disastrous if this happens and we don't replace revenues, but if in fact that does happen, then at least we would like to be able to ask the people to continue our school district the way it is or perhaps with some reduction of the tax levy, but not all the way down to one or one... or $1 or $1.10. And so much of school planning has to do with periods of time beyond five years. I think you can understand, if you could at least allow the people to vote on it for up to ten years of exemption, that would at least allow a decent planning period and ability to build something and know you could maintain it, ability to get teachers and know that they would be here for beyond the next four or five years. I think it would build in a lot of stability into the system if you allowed local control, a little more local control to vote to overcome the levy cap for a period longer than five years, at least up to ten years. That's all the amendment does: And I don't want to spend more time than is necessary on it, but I think it would be a helpful little piece. Thank you.
PRESIDENT ROBAK: Thank you, Senator Beutler. Senator Warner, to speak to the Beutler amendment.
SENATOR WARNER: Madam President, members of the Legislature, it seems to me we discussed this issue on General File. I indicated then, or at least it would still be my position, obviously the period of five years is ... was somewhat ... it's arbitrary. It could be any period of time. The reason it would seem to me that five years is appropriate that perhaps citizens would be more willing to vote for a five year period just because it's not so far out in the future, and have a chance to see how it goes. I don't know that it's particularly important, if it's every ten years. -I suspect that tends to be permanent in nature, and I would agree that allows for better planning
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because of a longer term, but notwithstanding that, I guess one can vote as they please. I'll probably vote for five, but I don't know that ten makes any difference, but I ... it seems to me that the five-year intervals certainly are significantly better than the annual requirements that some of the petitions have. But, you know, whatever the majority of the body felt would be ... would be fine. I think the only issue is, is a five-year interval be more likely to be approved than a ten year? Ten year would seem very permanent.
PRESIDENT ROBAK: Thank you, Senator Warner. Senator Kristensen.
SENATOR KRISTENSEN: Thank, Madam President, members of the Legislature. I want to explain to Senator Beutler and members who were interested in this, at least my thoughts on how we did this. There were certainly a group in committee that said, well, we ought to do this for, like, 20 years, or those that said, let's just do it open-ended. Okay? I think the other group that said, well, maybe we can do this for a year or two, because what you're really doing is taking it out of the hands, once the voters are doing this, to up the levy limit, they. lose control of that to a certain degree. So if the money that they voted to increase isn't going for the causes and the purposes they thought, there was an escape hatch. And so it kind of came down to, well, if you're going to do bonded indebtedness, sorts of things, long-term sorts of things, those are your, 20 to 30-year types of projects. But the safeguard there is we know the exact amount that's going to be financed. We know the specific cause, and this is just a general ability to go over the-levy. The other part was once we go over, is there a mechanism to get back out of it? This is similar to what I talked to Senator Hillman this morning about. If you didn't like the limit, could you get back out? And the five came as sort of in between a real short period of time, which wasn't worth the effort for the special election, and ten years which appeared to be a long-time to bind the taxpayers on going over the levy limit. And I don't know if there is any magic to five, but that's the reason we're at five, and for those that care about that, I guess I'm probably going to stick on five, but that's the policy choice of how we got where we were.
PRESIDENT ROBAK: Thank you, Senator Kristensen. Senator Bernard-Stevens.
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SENATOR BERNARD-STEVENS: Thank you, Madam President, members of the body. Senator Kristensen, while you're talking, I'm just going to ask a question and when you get a chance, if you can answer in a few minutes, that','- be fine. The question I'd like to know is on the five, the way the committee has it now, or way the Legislature has it now on Select File, is it the ability of the school board to put forth to the public that a levy will be increased or they would be able to increase by the vote of the board any period of time up to five years? So they could say, we're going to do this for one year, this will count for two years, or is it mandatory it has to be five?
SENATOR KRISTENSEN: No, it's up to five years.
SENATOR BERNARD-STEVENS: Okay. So the same way with Senator Beutler's bill. I mean, it could be ... it could be again two, three, five, up to ten?
SENATOR KRISTENSEN: Absolutely. And that's the argument that the people who wanted unlimited time said, look, let the localsdecide the time.
SENATOR BERNARD-STEVENS: Yeah. Thank you, Senator Kristensen. And with that, I rise to support the Beutler amendment, only because I agree with Senator Warner that five probably is a more... is a reasonable number that most people would, in fact, support if they are going to. A five-year commitment on a levy increase may ... will be more popular, certainly, than a ten. But I do think that Senator Beutler is giving to local control, the local boards, at least a possibility, an option, if they want to try to push for something that's above five, if they want to try to push for a six-year commitment or a seven. You know, I would argue if you're getting close to ten, you should be doing a bond issue at some point anyway. But if they want to try to do so, it's their option to gauge what they feel the public will support, what they'll be able to politically do, what they think is good policy. And if they want to do more than five, I think that should be their option. We still have the cap at ten. So, with that, I don't expect many...many school districts would, in fact, go to that level, but if "he school board wishes to try and wishes to do so, I think they certainly should have the ability to do so. And so I rise in support of the Beutler amendment.
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PRESIDENT ROBAK: Thank you, Senator Bernard-Stevens. Is there any further discussion on the Beutler amendment? Seeing none, Senator Beutler, to close.
SENATOR BEUTLER: Madam Lieutenant Governor, members of the Legislature, again what the amendment does is allow for a vote of the people that could take them as far as a period of ten years instead of a period of five years beyond the levy... or without the levy cap. And one of my major concerns with this whole tax package that we're doing is that it might have the effect with respect to the schools, the overall effect as it will play out of really discouraging quality education. And that's going to be Very upsetting to certain populations if... if they're not allowed to do themselves, if they are not allowed themselves to improve the quality of education in their area above what might be average. And I'm sure that each and every one of you will have some school districts in your area who are going to want to do a little more. They feel that strongly about education. And, you know, they ought to be allowed to do that without being punished financially, without being punished by the burden of excessive numbers of elections which are expensive in and of themselves. It's true that the longer they reach out beyond five years to six or to seven, probably the less likely the people are to approve it. But on the other hand, ought not that to be their choice? Ought not they to decide and put to the people whatever they think is the most sensible thing to do? And if the people reject it,. the people reject it. But at least you're not caught up in a cycle where ... where in a certain area, for example, they might want to consistently do ten cents or fifteen cents above what is the common mill levy. The people of that area just might feel that that's how much better they want to do on a consistent basis. And do they have to vote every five years to be able to do that? I think that's just a little much, and I think it's more reasonable to say, leave it to local control, because it is a vote of the people in the end. Leave it to local control and allow them to at least do it up to a ten year period. That's really all this amendment is about, and the taxpayers, to the extent that they're binding anybody or binding themselves, it ought to be their choice, and I'll belabor it no longer. Thank you.
PRESIDENT ROBAK: Thank you, Senator Beutler. Now, the question
14923
before the body is the adoption of the Beutler amendment to LB 1114. All those in favor vote aye; all those opposed vote nay. Have you all voted? Senator Beutler.
SENATOR BEUTLER: Record vote.
PRESIDENT ROBAK: Please record. Senator Beutler has requested a record vote.
CLERK: (Read record vote. See page 1796 of the Legislative Journal.) 6 ayes, 16 nays on the amendment.
PRESIDENT ROBAK: The Beutler amendment fails. Mr. Clerk.
CLERK: The next amendment I have by Senator Maurstad, Schrock and Avery, AM4131. (See page 1670 of the Legislative Journal.)
PRESIDENT ROBAK: The Chair recognizes Senator Maurstad, to open on the amendment.
SENATOR MAURSTAD: Thank you, Madam President. What I'm going to do is to try to move this along as quickly as possible. I'm going to open on AM4131. I'm not going to take all the time because I have an amendment that is filed to AM4131 that I'll just go to then, and ... because that basically changes quite a bit of the amendment and I apolotize for my clumsy way of doing this. This is the same issue that we discussed on General File. It was the first amendment that was up on LB 1114 and there, of course, was a natural reluctance to start out by making a substantive change to the committee's work, and purely appropriate for people to take a wait and see type of attitude. Since that time, of course, there have been other changes to other bills, and some changes to this bill. We got about half way to where we -needed to be on General File. I've tried to address some of the concerns that have been raised by other senators, since we were on General File, and that's why we bring it back before you. I'm hoping that everyone gave some ... some thought to this particular issue. The overall context to the basic argument of why I think we need to maintain the tiers that we have relative to municipalities is the total dollars of tax relief, property tax relief, by 1999 is estimated by the Revenue Committee to be about $240 million. So all '--he different subdivisions are taking their bucket of property tax relief and putting it into this barrel. The municipalities bucket is about
14924
16.5 million or about 7 percent of the total relief that's going to be provided by all of the components thrown together. What's concerned me is the percentage of relief by second class cities and villages are providing to the municipality's bucket, and that's $13.2 million, or -.!)out 80 percent of the relief being provided by the municipalities is coming from the second class villages...cities and villages. So with that, I think I'll close on my opening of AM4131 and request that we just go to the amendment, if I could, Mr. Speaker ... Madam President, I'm sorry.
PRESIDENT ROBAK: Mr. Clerk.
CLERK: Senator Maurstad would move to amend his amendment with AM4330. (See pages 1796-99 of the Legislative Journal.)
PRESIDENT ROBAK: Senator Maurstad, to open on the amendment to the amendment.
SENATOR MAURSTAD: Thank you, Madam President. The amendment primarily does this, and the blue chart that I've handed out provides a chart of what ... how we're proceeding to this point. The end result is that the levy lid on the metropolitan, primary, cities stays the same at 45 cents. The levy on the first class cities would not be 60 cents, as I proposed in the AM4131, it would be 50 cents, or 5 cents higher than what the bill now has it. Second class cities and villages would be at 70 cents, which is a nickel less than what I proposed in my amendment, but obviously a quarter more than what's being provided by the original bill. Now the reason why we're doing this, of course, is right now we....the villages have $1.05 levy, and they are more than the first class cities and metropolitan primary cities affected by the 45 cent levy that applies across the board. Your columns to the right indicate how the different classes are affected. As you can see, even after this amendment that's before you, AM4330, we still have 5 cities that would be over the 50 cent levy. Fifty-six of the second class cities would be over, of the 111. And of the villages, approximately 257 would still be over the 70 cent lid ... levy lid that would be provided in the amendment. I then provide for you the information of how the various classes of municipalities would be affected if LB 77 were adopted, which I'm sure everyone recalls is we're going to redistribute municipal state aid differently than what we are now. One thing that I would caution at this point in time is the assumption that has provided the fiscal impact relative to
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LB 1177 is. based upon that one-third of all of the municipalities current levy is bonded indebtedness. Now, granted, there might be some that are... that would be applicable to. But I think we would all agree that there are many that have a wide variety of bonded indebtedness as a percent of their total levy and, as a result, LB 1177 kind of gives us a glimpse of what might happen relative to the state aid. But it's not a completely accurate picture and, of course, that's because the information was not available to the Revenue Committee on how much of their... the various cities' levy is property... or bonded indebtedness because those figures currently don't have to be reported. So we go through, and that provides basically a very similar... similar study on the effects at the varying limits by the varying municipalities. The whole concern here is that we don't completely take away the options of second class cities and villages to continue to try to make a go of it. Now please understand that I recognize that for villages, the town hall concept is certainly there, and with a small number of people, you could increase the levy. My amendment doesn't take that away. That would still be ... still be allowed. What the amendment does provide for, however, is that the increase over 50 cents, by those that could go higher than 50 cents, would be the referendum efforts could be implemented if they increased their limit above 50 cents to, say, 70 cents for a village. Referendum and initiative process is applicable to municipalities, it's not to the other local political subdivisions at this time. But, in essence, what that would do is give the people a chance, provide them once again in a different way, a measure of local control in that if the governing body increased the levy, they would be able to use the referendum process to take that back to the governing board, at which time the governing board could decide to agree with the referendum issue or they could then put it on the ballot and let the voters decide. But it provides an avenue that all of these types of things wouldn't have to go to the expense of having a ballot issue. So it provides just another tool to be used relative to that. It doesn't replace what's in the current bill, but provides a little bit more flexibility. With that, I will ... I will close my opening and try to respond to any questions that might occur, and would ask, after the discussion, that you adopt the amendment to AM4131, and then adopt the main amendment.
PRESIDENT ROBAK: Thank you, Senator Maurstad. Senator Warner,
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to speak to the Maurstad amendment to the Maurstad amendment.
SENATOR WARNER: Madam President, members of the Legislature, Senator Maurstad's amendment to AM4131 that provides some, I believe, reduction in the levies that he had originally, plus an opportunity for a referendum, probably improves the basic amendment. However, I would still express concern about the amendment in total because it's setting up a totally different policy issue. And that policy issue is if you should have differential in maximum levies based on size. You could do the same argument for schools, same argument for counties where the larger ones would have a lower levy limit and the small ones a higher levy limit. I'm not sure that you want to start down that route of putting those kind of divisions across the state, because it's Just as logical to do it for schools and counties as it is for these municipalities. It seemed to me that the approach that is in LB 1114 currently does permit the opportunity for the vote. I recall Senator Coordsen's comments on General File and how the election process, certainly on the villages, those under 800 population, was a fairly simple process. For those second class cities and first class cities, it's more of a complex issue because it'd have to be a regular special election. But aside from that, it seems to me that the likelihood of voter participation in this whole concept of incentives to get people to ... willing to look at cooperative efforts, which they also have to vote on, that that ability to look at alternatives is going to be. one, do I vote yes for a higher levy or do I vote yes on a proposed merger or a proposed cooperative effort, and therefore reducing the overall cost to government. If you make it easy to keep things as they are, they probably are going to stay as they are. And again, I would be ... would vote for the amendment that Senator Maurstad has to his amendment because that is better that way, but I would still urge not to adopt the overall amendment, even as amended, because it sets this whole different policy which, you know, I...in fact, we have an amendment ... I have an amendment to apply the same thing to schools and counties, but I'm very reluctant to start down that route. What we were attempting to do is have more uniform levies throughout the state. In part the Municipal Equalization Fund was to take care of some of these smaller entities. We have talked about that. It doesn't take care of them totally, but addresses that issue, and it seems to me that that's a far better route to go than to go the route of authorizing higher levies with the option then of reducing it by
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referendum. But then you... I think you're going to lose what is so important...
PRESIDENT ROBAK: One minute.
SENATOR WARNER: ... as to encourage the cooperative efforts which will be less likely to take effect if the Maurstad amendment as amended is enacted.
PRESIDENT ROBAK: Thank you, Senator. Senator Cudaback.
SENATOR CUDABACK: Madam Speaker and members, this is a tough issue and I guess we all know it's a tough issue. I guess we were sent down here to make tough decisions. I talked to Senator Crosby a while ago and she said that she was discouraged. And I said, well, that's a sign you're doing something. So if that's a sign we're doing something, I guess we're all kind of discouraged and we're all nervous and we all know that the Revenue Committee spent a lot of time on this issue, and they...we give them heck because they didn't put out a package. Now we're giving them heck because we think the package is too tough. Well, it is a tough issue. And when I ran for this office, a person says to me, in my area. He says, I really don't care what you do down there just as long as you do something, and you remember where you come from. So I guess all these issues, whether you come from the eastern part of the state or the western part of the state, we all represent different people, and I guess that's the, bottom line. I have a lot of villages and I have a lot of smaller towns and I think we need to make sure that these smaller towns survive. And I guess I feel personally that it's pretty hard to survive on 45 cents. Now if you have a sales tax, it's a different story. I think we have a compromise here. I think the Maurstad amendment is not exactly what we all ... what we want, but it's 70 cents, and at 50 cents, I think that's a...that's a line where we can start from. And I think some of the towns maybe can survive with this going on, or with this limit. It won't help them all, as the printout states here, but the 45 cents is a bit much to swallow if you're trying to survive in some of my towns that have a $2 levy right now. A $2 levy down to a 45 cent levy, I guess, is pretty hard to even buy gas for the tractor to mow the weeds. I'm stretching it a little bit here like I usually do, but I just hope this all works out and I hope I ... I come back here next year or the next year and say... and I have to eat crow. I
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hope it works out with Senator Wehrbein ... or Senator Warner's Revenue Committee, and I hope they've got it figured out where it really does come back. State aid helps these smaller communities. I guess I'm a little light in the loafers. I really can't see that now as working, but I hope it works out and I hope I have to eat crow on this whole tax package. And if it goes as it looks like it's going to, why I guess we all hope it works out for the best. With that right now, I think I will support the Maurstad amendment for the sake of the little rural towns in Nebraska. Many of us represent them and I can't see the light of the big city but I guess, fortunately or unfortunately, I don't live in Omaha or Lincoln or even Kearney or North Platte. Thank you.
SENATOR COORDSEN PRESIDING
SENATOR COORDSEN: Thank you, Senator Cudaback. Senator Schellpeper.
SENATOR SCHELLPEPER: Thank you, Mr. Chairman and members. I also rise to support the Maurstad amendment. I think it's a very good compromise. When we discussed these bill in the Revenue Committee, there's probably no entity that had me more concerned of any political subdivision than the small towns because I think that LB 1114 affects small towns worse than any ,other entity in this state. Some people say, well, schools are affected, too. But I don't think this body is going to let schools go downhill. 11. Small towns are something that a' lot of people in this body think, well, I'm not from a small town, we really don't need small towns, but we really do. If you're from a rural area, small towns are very important to this state. Every small town has probably an over abundance of elderly people in it. Those people are not going to vote to increase their budget. They're on a fixed income, the biggest share of them, and they're not going to vote to increase a town budget. Young people will not stay in that small town. They're going to say, well, I'm not going to stay here. I'm going to a town that has a city sales tax. They have low property taxes. They have a very small property tax because they have that...that sales tax that they can raise some revenue from. A small town, a sales tax wouldn't raise anything. You wouldn't raise enough, like Senator Cudaback said, to mow the grass. There's nothing in these small towns basically any more except houses. But they're very important to this state, and when you're cutting
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down, many of them from $1.40, $1.50, to 70 cents, you're cutting them in half. I think that is a very, very good compromise. I would like to see them so that they wouldn't be affected. Their budgets, basically for small towns, are very low. If you look at what a lot of budgets are in many of our small towns, they're all under $100,000 basically, because they don't have anything there. They buy used equipment, they may have one person on the street. The county takes care of the police protection. But they're a place that people live, and they're important to this state. And I think if you're going to cut their budget to 45 cents, you're basically going to dry up many of these ... these small towns. I don't see what this ... this LB 1114 is really going to do to cut property taxes. All you're going to do is to hurt many of our small towns. Of all of the entities, once again, I think small towns will be hurt more than anybody because the way that they're actually made up with their ... the people involved, the people that live there, and the very low budgets that they currently have. So the amendment that Senator Maurstad has that goes to 70 cents for these small towns will still cut their budgets in half from where they're at right now, for many of our small towns. I think this is a very good compromise. I think it's something. that we should do. I don't think we have to worry about going down the road, that schools are going to want the same thing. The Legislature has always been good to schools in this state, I think. We've been fair to schools. Sure, they have to skimp a little bit, but we haven't left the schools where they can't survive. They've basically been able to survive. LB 1114 in its current form though...
SENATOR COORDSEN: One minute.
SENATOR SCHELLPEPER: ...would be real hard for any small school ... or small town to survive. They just will not do it because they're not structured that way. Their...the make-up of our small towns are such that the people in them are happy to live there, but the young ones ... anybody that's young will not stay there, so I would hope that you would approve the Maurstad amendment. It's a good compromise. Thank you.
SENATOR COORDSEN: Thank you, Senator Schellpeper. Senator Kristensen.
SENATOR KRISTENSEN: Thank you, Mr. President, members of the
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Legislature. I want to go back and review with you why the levy limitations are as they are in the area of municipalities, how we arrived at that, and why that's good public policy, and why some of the items that have been said today are predictable, yet I don't think entirely accurate. First of all, the average statewide levy for municipalities is a little over 41 cents. The Maurstad amendment, what he doesn't put on his sheet here is that there's another nickel included on all these so, in effect, you're taking the cities up to 50, the first class to 55, the second classes and the villages up to 75 cents because there's still that nickel available for the cooperative ventures. But what we did with that statewide average, and there will be those that will argue, well, sales tax has such a huge impact upon that, that in effect if you would take out the levy for, I think, Omaha and Lincoln, you're still going to have a community levy somewhere in the neighborhood of 55 cents. so we're very close to the statewide average, even if you take out the two largest communities to do that. But we decided on a structure, and with so many of the smaller communities...and this isn't primarily a small community versus large community because there are a number of smaller communities who easily fit within these levy limitations as well. The key is that those communities have said to themselves, look, either we have a higher valuation and we have our property up to 100 percent of market value or we just don't spend as much. There's a class of communities out there who have chosen to try to offer more services than, quite frankly, they can afford to do. And what makes these levies, particularly in the smaller communities, not as true, is that one purchase can have a huge impact on what their levy is. And Senator Schellpeper is correct. Some of the budgets are smaller, smaller total dollars. The smaller the total dollar for one purchase, whether it's a pickup or whether it's a mower or whatever it is, a street sweeper, can have a huge impact on the levy amount, but the key is expenditures. What are they spending? And the reason that then we put in LB 1177 was to assist those smaller communities that are having trouble with that. LB 1177 is a mechanism where additional monies can be put in at a later time, once we get some of these efficiencies, once we give the communities a chance to look at themselves and say, what are we going to do? But you can take a community such as a Minden or somebody else who they're going to have to scramble' and find some different ways of doing business. They're going to look at LB 1085 and see that now we've given the opportunity to do away with the sheriff's department and just have a city
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police do it all, to fit in that. Or, they can an have some other joint venture where they all work together. Instead of being on patrol at the same time, they can do it once. It's going to make those communities do that; And that's the reason that LB 1177 doesn't have a hundred percent of reimbursement right now, is that you're going to allow over the next two years the chance for people to examine how they're doing business. It is not going to be the death of small towns. They are not going to dry up because of this issue. There's a lot of other reasons people leave small towns. Some of them are that the... they feel there's no opportunity, there's bigger opportunities somewhere else, and you know that that's a natural tendency. But these limitations aren't going to have an impact on that, those tendencies are going to continue. But what this allows is the structure, and it gives us an average levy that we try to target it here, that's going to treat everybody the same. The other argument that I think is out there is if we're going...
SENATOR COORDSEN: One minute.
SENATOR KRISTENSEN: If we're going to classify by size of community, their levy limitation, what's also going to happen is probably the best way to give the aid in LB 1177 is to base that on classification as well. And then what will happen there is the larger communities will get more of that because of the size, and you won't be able to pick and choose who you're going to help get through this transitional period. So I know that it ... you've been lobbied extremely hard, extremely hard, but this is one of those issues where I think you have to keep it here on the floor of the Legislature and try to maintain the levy limitations that are across the board. They're fair. Are they difficult?. Yeah, they are. But these small towns will be able to cope with that. That's the reason we have LB 1177. That's the reason that we're eventually probably going to put more resources into that if we really are going to go wholesale and try to close down these communities. But they're going to have to look at their operations first. That's the reason ...
SENATOR COORDSEN: Time.
SENATOR KRISTENSEN: ... we look up ahead and not increase the taxes first and give it to them.
SENATOR COORDSEN: Thank you, Senator Kristensen. Senator
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Schrock.
SENATOR SCHROCK: Mr. President, members of the Legislature, if you're from Omaha and Lincoln or even Scottsbluff or Sidney where sales tax is a pretty good share of your revenue, this provision on levy limits on cities, municipalities is not a big deal because you don't have a problem. A good chunk of your revenue comes from someplace else. Superior is trying to build up a fund so they can attract industry for economic development. They're trying to build up some funds. They're assessing a sales tax for that. I'm afraid if we do this, all of a sudden, they won't have enough latitude to put money into their Economic Development Fund. And if there's one thing a town like Superior needs, and I'm sure it's like a lot of rural towns out there, they need some money to try and attract industry. Even the Governor is trying to provide some money to try and attract industry in rural Nebraska. But I believe it's done better at a local level than for the state to try and do that. I believe we need to give our rural communities a little more leeway on this. From a selfish standpoint, this doesn't affect agriculture, so it doesn't bother me, but I think... think you've got to realize a lot of those houses in rural Nebraska aren't valued very high. There's not a lot of valuation for them to tax. We don't see homes in Orleans, Nebraska like there is around the Firethorn Golf Course out here. There's not too many homes in that community valued over $25,000 or $30,000. But who's going to take care of their garbage, and who's going to take care of their water, and who's going to take care of the government services ... the city services they need? I think Senator Maurstad has brought a good amendment here. It's been in the spirit of compromise. I think it's something we should move forward, and I totally support the Maurstad amendment.
SENATOR COORDSEN: Thank you, Senator Schrock. Senator Pedersen.
SENATOR PEDERSEN: Mr. President and members of the Legislature, I stand in support of the Maurstad amendment. I represent a district that has two small towns, actually three small towns counting Gretna, that's mostly Senator Avery's district, but I do have part of Gretna, that are Class II cities--Elkhorn and Bennington. In the last year, Elkhorn annexed some areas, which included the area where I live, I used to live in an SID, and we've never had better street maintenance, better police
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coverage than what we've had since we were annexed. Them services cost money and LB 1114, as it now stands, I don't believe it's going to shut down a city the size of Elkhorn or Bennington, but it is going to cripple them and we aren't going to get the services that we're presently getting. And we aren't asking for the Cadillac of services. We're asking for just decent coverage which we have finally just recently got and are beginning to enjoy. I think the Maurstad amendment to the amendment is a good compromise bringing the amendment to a point that it will not cripple this package of bills. Most of our towns in the state of Nebraska are small towns. I represent part of Omaha too. Omaha does all right with this. But we've got to remember the small towns and, as Senator Schellpeper mentioned, the people that are on fixed incomes and, as I read this, it is not, we talk about crippling communities or small towns, I don't believe this amendment, after it's been amended again, will cripple our package of property tax relief bills. I urge your support of the amendment to the amendment and then the amendment. Thank you.
SENATOR COORDSEN: Thank you. Senator Vrtiska.
SENATOR VRTISKA: Thank you, Senator Coordsen. I also rise in support of the Maurstad amendment. Just a couple of things to add. I live in a small town and for years I kept the books and was the treasurer and clerk for that town for 75 dollars a month, mainly because they couldn't afford to spend any more. We have a man that works the street and takes care of the sewer and does a lot of those odd jobs for the town for minimum wage because the town can't afford any more and this is just typical of a lot of the communities that we're dealing with because they're really a bare bones. I think our levy for taxes in my town is about 23,000 dollars a year and you stop and figure out what you can do with that kind of money. We paved a number of streets in our town. If it hadn't been for the federal CDB block grants, we could have never done that, and even then it's difficult to match any of those dollars. In fact, we've had to back away from even finishing up some of the paving because there was not even the match money to do the job. I recognize that it is difficult to start down the road of starting to say that you're going to do this for these people and not that for those people. But I want to also include the comment that Senator Schrock made and that is that most all of the large cities that have the sales tax, you have to understand that when
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I go to those towns to buy things I leave my money there for them to take care of their infrastructure, but, unfortunately, and it's nobody's fault obviously, but unfortunately nobody comes back to my community, leave any money in sales tax, because to implement a sales tan. wouldn't generate enough money to be worth the problem. So what you have to really depend on is the tax dollars. And a number of communities that are in my district are going to be something like Senator Schellpeper said, they're going to be pretty hard hit because they're not going to be able to come up with enough money to even take care of the maintenance and upkeep of the community nevertheless. And also, we buy from the county sheriff the police service. All the towns in my county do simply because it was an easier way. Obviously, with the new regulations you couldn't afford to hire a policeman in your town if you wanted to because of the training it'd take, the cost is so high. There's just a whole list of things that happen in these small villages and small towns that's certainly going to make it awfully difficult for them to survive. I'm a person who doesn't believe in taxing people any more than you have to, but I think we're taxing them less than we have to in order to survive under the present structure that's coming out. I appreciate what the Revenue Committee's done and I know they worked hard to arrive at a solution, but I'm not sure in every case that the solution is something that people in some of these small villages can live with. So I guess I just feel that what Senator Maurstad is trying to do here will, in fact, allow some of these villages to continue. You know they're there and their homes are built there and the only way you can continue to provide any of these services, for example, taking, the snow off the street in the wintertime and mowing the park in the summertime, those kinds of services are certainly going to have to be curtailed or eliminated if we don't ... if they don't have any money to do it with and, in some cases, I can assure that that's exactly what's going to happen. Some of the things are just going to be left undone because there's isn't going to be money to do them. And I think that's real unfortunate for those people that live in those towns to not at least have some of the services ...
SENATOR COORDSEN: One minute.
SENATOR VRTISKA: ..that are certainly provided in the larger communities because they can afford it and, frankly, the small towns just can't afford it with the kind of levies that we're
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trying to place on them. I hate to say that because I don't want to have my taxes on... I live in town, I don't want my taxes raised on my home any more than anybody else, but I also would like to be able to have the streets kept in halfway decent and hopefully keep some of the lawns mowed in the park and places that probably just won't be able to be done. So, for that reason, I have to support the amendment as Senator Maurstad has brought forth. I thank you.
SENATOR COORDSEN: Thank you, Senator Vrtiska. Senator Jones.
SENATOR JONES: Mr. President and members of the body, I'm going to have to stand and support the Maurstad amendment too because my district probably, I got 49 towns in it and there's 2 of them cities that's got sales tax in the whole district and all the small towns in my district it wouldn't really do them no good to have any sales tax 'cause probably all they got in that towns is the filling station and maybe one cafe and some are just trying to hang on with whatever they got besides the grade school on a lot of them. So there's no way for them to raise any money from sales tax and, in fact, they can't buy anything there so they'll go to the towns that do have sales tax which is bigger and leave the money there. So there's no way to do it. And a lot of them small towns got a revenue check for years and I was on the township board and we always got the revenue check too and that kind of helped to do a lot of them other things or extra things that you needed done in the small villages and we really need those small villages to keep the area out there because it ... when they dry up the community dries up, so it's really important in the.... Another thing I don't think's been mentioned here but I think it's going to be covered by Senator Janssen's amendment that might take out the mandates that's coming down on the small cities. Anyway, just like water testing that they have, that's a cost and I've had a lot of complaints from my small villages that they can't even afford the water testing anymore at the rate that they're paying now, so they're really complaining about that because it's got so high, they have to test it for so many things. So that's a mandate that's not funded and they got to do that so that's another thing that I hope we can get taken care of here. But I'm going to have to stand and support it because I think it's really important to keep the small cities, because when you got 49 of them in your district, if you don't stand up and support something like this, well, there's something wrong. Thank you.
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SENATOR COORDSEN: Thank you, Senator Jones. Senator Beutler.
SENATOR BEUTLER: Senator Coordsen, members of the Legislature, I'm kind of torn on this one I cause, on the one hand, I become a little confused about what this whole package is all about, but to the extent that we're trying to develop equal paying and equal distribution of a sacrifice, I think that's what the Revenue Committee has tried very hard to do, why is it that some of the communities who are going to get ... who want this property tax relief the most and some of the senators in here who want this property tax relief the most then are coming back to us and saying, but we don't want the levy limits on our people? I mean I think that we have to be consistent about this and if we allow this amendment to go through we are not being consistent, in my opinion at least. With respect to the school districts, for example, there is not one single school district that's been allowed to escape from the levy cap. There's not one single school district that's been promised a penny of replacement revenues for the 20 to 30 percent of property tax reduction that they're going to take. Nothing has been promised to any of them this year. It seems to me that however bad you may think it is for villages and cities of the second class, it's just as bad or worse for schools. At least there's 1177 for the small cities, but there's nothing for the schools. If we're going to do something for the schools then I'm for doing something with the small towns and villages. But if we're going to do nothing for the schools. and the theory is everything waits till next year and then we'll decide what the solution is, then I think the small towns ought to wait till next year just like' the schools wait till next year if they perceive themselves to have some kind of problem. We all wait or none of us wait, we all being the various types of districts that are put in jeopardy, more or less, by this package. I see no reason to distinguish small towns from schools in how we treat them at this stage. Either we provide some relief for both or for neither. And maybe I'm not looking at that quite right and I'd be interested in Senator Maurstad's response and the response of those who are interested in this particular amendment, but I find it hard to separate in my own thinking why we would treat one type of political subdivision different from another and why, simply because of size or because somebody's hurt worse than another, we're going to make some distinction? If the average levy for cities outside of Lincoln and Omaha is somewhere around 4.5 or 5, and
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if we're asking school districts in our equalization formula, if we're not... if we're penalizing those that are... that have high levies, if we're using average levies to try to figure out what's fair, I don't know why that same sort of system is not at least equally applicable to villages and cities of the second class. But I would admit to having a lot to learn in this particular area and I would certainly be willing to listen some more. But I. hope somebody can answer those particular questions. Thank you.
SENATOR COORDSEN: Thank you, Senator Beutler. Senator Schimek.
SENATOR SCHIMEK: Yes, Mr. President, I'd like to yield my time to Senator Kristensen, please.
SENATOR COORDSEN: Senator Kristensen.
SENATOR KRISTENSEN: Thank you, Mr. President, members of the Legislature, and thank you, Senator Schimek, for the opportunity to get in line here and put a few more pieces to this puzzle. Please keep in mind that there are the following things to protect these small communities or the ones that, where they're even a little larger communities, because there are certainly some of those affected as well. But primarily with the villages that we were concerned about, that's the reason we allowed for the town hall meeting where they could vote to increase their levy at that time for this five-year period of time and that that could be done with having a minimum amount of people there, I think it's a 10 percent quorum, and then having a majority of those people vote to do that, and that's real practical because those small communities, everybody knows everybody. Everybody knows if money's being wasted or not and that's where this small town hall meeting and the vote, I think, will come in to be very practical. For the little larger communities the opportunity to increase that for at least the first five years, till they get the chance to go out and find ways to live within this, is a good relief valve. But what happens if they don't approve that vote? What's that tell you? That tells you that people didn't want the property tax, and therein lies the whole point of this debate. If we don't put those levy limits in, and I don't know of anybody on the floor that enjoys putting those levy limits on, I don't know of anybody that enjoys going out and talking to their mayor and saying, I'm sorry, we're going to put some levy limits in, or their superintendent, or their county board chair
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or whoever, we're putting those levy limits on. But if you just look and say, and the conversation goes no further, we're putting a levy limit on, everybody'd vote no. That's the reason we've got these other protections. That's the reason we've got the right to override by a fairly easy process. That's the reason we've got 1177 in there to give them some money and, basically, and there's no secret to this, that money in 1177 is coming from larger communities to assist those smaller communities and that's where the give and take on that is. And that's the reason this package and everybody will maybe pooh-pooh the package, but this isn't a matter of just seeing what can get passed. It's the fact that as we put the whole thing together, we begin to place some logs at the bottom and build up. And one of the foundations of this is the ability that we don't want to kill towns, we don't want to kill schools, we don't want to kill counties, and we want to give them ways to, one, survive, but we also want to make some way they're going to change. They're not going to change without a reason to change. We all know that. We've given them a lot of opportunity. It's a difficult thing to put levy limits on but I think you all know that it's probably the best thing to do at this point in time and it's also two years back. They're going to have a period of two years in which to find ways to live under 'this. Then they're going to have the opportunity to also exceed that and, in the meantime, we're going to try to find ways to make the property tax system a little leaner, a little meaner. But if you don't do the levy limits, and I assume what happens if I give some leeway here to the communities the schools will have the exact same argument and it's going to be very difficult for you to look at them and say, sorry, we like the cities better than we do the schools.. And then you're going to have to do the same thing for the counties...
SENATOR COORDSEN: One minute.
SENATOR KRISTENSEN: ... and then, by the time you're all done, you do those three, you don't have any levy limits and we're back to where we begin. And that's the dilemma we had and that's the reason we put in the levy limit. And 1, again, I don't know that anybody in the Revenue Committee enjoys doing that, but we. know full well if we're going to begin this process we've got to start somewhere and fashion a reasonable levy limit to begin with, freeze the spending as best we can until those limits come in, allow people to make some efficiencies, allow 14939 them to change structures, allow them to examine themselves, then we begin to look at replacement revenues if it's necessary, not the other way around. So I'd hope that you'd see fit to do as you did on General File, keep these levy limits and tell the small towns and the other communities that are affected by this when they talk to you, look, there are ways around this, there are ways to live within this, but part of the burden is on you, and part of the burden is to examine how we do business and for a lot of these it may be as simple as not making an expenditure or as simple as having...
SENATOR COORDSEN: Time.
SENATOR KRISTENSEN: ... a town hall meeting.
SENATOR COORDSEN: Senator Cudaback.
SENATOR CUDABACK: Mr. Speaker, members, I'd like to ask Senator Kristensen a question, please, if lie will yield.
SENATOR COORDSEN: Senator Kristensen, would you respond to a question, please?
SENATOR KRISTENSEN: Yes, Senator Cudaback.
SENATOR CUDABACK: Either you or Senator Warner. Maybe he knows more about this than you do. I don't know, but...
SENATOR KRISTENSEN: He knows a lot more about everything than I do.
SENATOR CUDABACK: Okay.
SENATOR KRISTENSEN: You probably know more about everything than I do actually.
SENATOR CUDABACK: No, I'll pass on that one. I know this, when I read this I don't always understand what I'm reading, so it's better to get it from the horse's mouth rather than from the way I read it. If a village is at, 85 cents, right, if a village is at 85 cents or a town's at 85 cents and they're-forced to go to 45 cents, that's a different of 40 cents. Correct?
SENATOR KRISTENSEN: That's right.
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SENATOR CUDABACK: Okay. If, under LB or the 1177, how much of that difference, of that 40 cents .... I know you can't... it's kind of a guesstimate, but how much do you think that will be replaced by 1177 if such is passed, or is there any goal or... ?
SENATOR KRISTENSEN: It's not done in that mechanism. It's done in a formula, so I can't tell you, but basically what happens is if they are... if they're a community that has a higher, a much higher average levy and then we look at their average, what they've done over the past for the expenditure parts of that, they're probably going to get more of that, but there's not a number out there. In other words, we're not saying, look, we're going to replace 50 percent of it, because it varies from town to town.
SENATOR CUDABACK: So...
SENATOR KRISTENSEN: Could I ... No, that's all right. Go ahead.
SENATOR CUDABACK: So some might receive 20 percent of what that difference of 40 percent... of the 40 cents, some might receive 10 percent, 30 percent or whatever.
SENATOR KRISTENSEN: Some may receive 80 percent too . Some wouldn't get any, but it depends, you know, and that's where we'll talk on that issue later, but that's how that works out.
SENATOR CUDABACK: Okay. Now, the villages probably won't be in as tough a shape as some of the larger communities because they can't have a ... and I do like that where the people can come to the meeting and voice their concerns and perhaps go over the limit. Is there any chance that we can put that same formula or the same criteria together to work in the three or four thousand population city, or have you thought about that?
SENATOR KRISTENSEN: We did, other than just mechanically it's harder to do. I misspoke and I want to correct that, as just you and I are speaking, that when I talked about the village having a town hall meeting, that's each year they do that when they have their meeting and not for the five years at one meeting, but that opportunity's still out there. The only problem you've got is the larger communities, you begin to have
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quorum problem and all those other things.
SENATOR CUDABACK: But I just wondered if we could put like a 5 percent of the last vote or whatever just to make sure that...'cause it is easier to do it at a meeting if you have 30, 40, 50 people there rather than, you know, a regular vote, whatever. I just wondered if you gave that any thought or....
SENATOR KRISTENSEN: Well, yes, we have. The other danger is that if you reduce that quorum number down too far then you've got a small ... you know, there's a temptation for small ... a small number of people and if there's not good notice the smaller the entity, for example, the smaller the village, that word's going to get around pretty quick.
SENATOR CUDABACK: That's good, isn't it? I mean...
SENATOR KRISTENSEN: Absolutely, that's good. That's ... as you go to a larger community, though, it's tougher to get notice to people. It's tougher, you know, to notify everybody and there's a larger opportunity for people to come in.
SENATOR CUDABACK: Yeah. I thank you. If you want the rest of my time, you can have it. Just explain further your ....
SENATOR KRISTENSEN: 1, Mr. President, I think that Senator Cudaback yielded me the rest of my time, but I'm not sure.
SENATOR COORDSEN: You have a minute if you want it, if that's what all of the motions were about.
SENATOR KRISTENSEN: I think... I ... Senator Cudaback's head's shaking and I hear it ...
SENATOR CUDABACK: I did.
SENATOR KRISTENSEN: ... so it must be correct. Thank you. The other thing that, Senator Cudaback, as we begin to look at how you're going to treat the smaller entities, I mean our biggest problem is there's some entities that are doing things out there that you really can't imagine. I mean, some own nursing homes, the community. Some have various other things out there and they're doing a lot of things. A number of these communities also, when they'll come to talk to you, will say, I've got a
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real high levy. But you also got to rememer that you're taking out bonded indebtedness out of this as well and so that will have some skew onto that figure. And each community, as people be ... as you begin to examine their budget, you'll find different things in there and that's what will skew their levy up very high. In terms of an operation, quite frankly, most of those operational things fall in that 40 to 50 cent level and that's where we're at right now. We're sitting with 1114 at 45 cents ...
SENATOR COORDSEN: Time.
SENATOR KRISTENSEN: with the additional nickel to go up.
SENATOR COORDSEN: Thank you, Senator Kristensen. Senator Hartnett.
SENATOR HARTNETT: Mr. Chairman, members of the body, I think Senator Kristensen and Warner, this is part of a process. We're not talking about these lids, you know, like tomorrow, like we snap our fingers. They're two years down the road. And I really think that cities along with school districts have to look at what they're doing. Can they save money? A few years ago I had a bill in Urban Affairs Committee that allows cities to have, and small communities have, civil service protection for the police chief, you know. Do we need, you know, a chief of police in Riverdale, you know? But I think we really have to... this...if we do this, we're starting down a slippery, slippery slope. We can do it. You know, the schools have an argument. We're two years away and I think what we're sending a message to the political subdivisions, look at yourself; is there a way that you can save your money? And I disagree very strongly with you, Senator Schellpeper. You know, we take dare of the schools, we don't take care of the cities. I don't ... I think we've done a pretty good job over the years of taking care of the cities. Probably the cities will disagree and so forth. If Senator Vrtiska was here I was going to ask him, because I hear that, you know, their levy is very high. They have a city administrator plus an assistant administrator for a very, very small school with ... I mean very ... school, very small city. So that's what I think we're trying to do, is have the cities look at their spending patterns. Can they do it better? There is also the vote. If they really can make a good case, they can take it to the people and say, this is what we're going to lose
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and it's like a cartoon I saw one time, you know, cut my ... cut a program but don't cut my program, and that's really .... I think that we have to. It's a process. It doesn't go in, in two years. There is the ... a bill that takes some of the...adds some aid to the smaller cities. There's also the... if that passes after the...if the constitutional amendment passes, Legislature passes, the people, the changing the levies on automobiles to a fee rather than a property tax and that adds money to the cities and so I think they do all right, in the end do all right. So I think that, even though you've had some pressure from people to say we need this in the small cities, I think the small cities and the communities have to really look at themselves, even the large cities, as far as their spending is concerned and that is the purpose of the revenue package. Thank you.
SENATOR COORDSEN: Thank you, Senator Hartnett. Senator Fisher.
SENATOR FISHER: Mr. President and members, I find this debate rather, oh, what do I want to say, very conflicting in your thoughts. As I look through and look through some of my neighboring towns, Grand Island's very fortunate. We generate a lot of sales and income tax. Leading sales in that area, in fact, number two in Nebraska, so we don't have a problem. But I look at our neighbor cities around, our towns and villages, and they would be impacted with a great deal. I think that's rather... I don't think the Revenue Committee intended to do that and I think Senator Maurstad comes up with a pretty good compromise. I think it's a perfect example of one size doesn't fit all. One size doesn't fit all. Circumstances are different in some of these smaller towns, different communities, and I think we have to look deep and I think we have to look at the big picture here. I think we ought to look at all of Nebraska, not only just your individual cities. And it'd be very easy for me to say, okay, fine, it's not a problem, but it's a problem for us, all of us in Nebraska, all of us in this body. So I think it's important to take a look at it and I think Senator Maurstad did a good job of making a compromise. And we still have the flexibility. There are still going to be some of these that are affected still exceed it far more and they're going to have to go to their special town hall meetings and exceed if they're going to continue to have the ... provide the services that they had in the past and the services that they want. But look at it. Look at it very closely and remember, one size
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doesn't fit all. There's quite a bit of disparity from a metropolitan to the small villages. And let me tell you, we have a lot of small villages in Nebraska and we depend on them and they have a livelihood and they have services to provide. I doubt very seriously if they waste or spend any of that money foolishly, but that's what they want and I think that we should control it, yes, no question about it. But this amendment does give us the flexibility to look at it for a different size, a different prospectus than some of us that are fortunate to not be involved with that. So I'm going to vote for... support Senator Maurstad's amendment. And if Senator Kristensen wants some more time, be my guest.
SENATOR COORDSEN: Senator Kristensen.
SENATOR KRISTENSEN: Senator Fisher, Senator Cudaback and I were ... was just visiting about expanding that area of the vote and I don't know, we haven't discussed that matter, whether you want to extend it on to a people that have a community of a thousand or whatever. As you get larger, obviously, it's tougher to get a quorum, it's harder to do that mechanically and do those things. But I suppose at this point in time, and I don't know when our question's going to get called on the Maurstad amendment, but I assume that a number of people would be willing to vote for the amendment to the amendment. The real issue is the amendment to the bill and, as we go around, just remember this is not an issue about one size fits all either. This is a matter of levy limits across the board. We're not telling those people what they have to cut. We're telling them we're giving them the flexibility to do that. But it's a matter of fairness at this point in time and I would hope that you'd keep that in mind. I'd hope that you can vote to accept the amendment to the amendment and then vote no on the amendment itself. Thank you.
SENATOR COORDSEN: Thank you, Senator Kristensen. Senator Kristensen, your light is next. Okay. Senator Bernard-Stevens. The question has been called. Do I see five, six, seven, eight hands? The question before the body is, shall debate cease? All in favor vote aye, those opposed nay. We're voting on ceasing debate. Record, Mr. Clerk.
CLERK: 25 ayes, 0 nays, Mr. President, to cease debate.
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SENATOR COORDSEN: Debate has ceased. Senator Maurstad, to close on your amendment to the amendment.
SENATOR MAURSTAD: Thank you, Mr. President. I appreciated the discussion that went on. I'm going to try to address some of the concerns as quickly as I can. I want everybody to remember that the status quo right now relative to this issue is that we currently have different levies for different classes of cities, so this amendment actually keeps us with the status quo. There isn't any question that this issue is going to be decided on the floor based on its merits. The only change or what we're looking at right now and what I want people to think about, is the 70 cent limit for second class cities and villages is a 35 cent decrease from what they currently have the ability to levy. At 50 cents on the first class cities, it's still a 37.5 cent decrease in what they're current ability is. So I think that it's easy to see that we're not talking about letting them off, letting them off the hook. You know, I ... some of the discussion revolved around schools. I understand that. As I said before, municipalities aren't special, quite the contrary. In fact, if you look at the facts that state aid to municipalities haven't increased since 1978, not at all. Let's look at what the increase in the school levy or school state aid has been since that point in time. The MIRF funds were added a few years ago, a additional four and a half million dollars; two years later needed some funds, million and a half or a third of those funds that were originally appropriated were taken away. Rightfully so, municipalities are down on the totem pole relative to priority. I don't think there's any question that if it comes to providing resources for the schools and providing them for the municipalities, I, along with a majority of the senators in the Chamber, would certainly provide funds for the kids first, for the schools. I mean that's why state aid hasn't increased since 1978 for municipalities. The 1177, there was some comment ... a comment that most of this funds are coming at the expense of Omaha and Lincoln. You know, about two and a half million dollars or possibly a little more than that certainly comes from there, but it's less than one cent of their levy to make tip that difference. You know, I had an amendment that would have decreased Lincoln and Omaha to 40 cents, 5 cents, and I mean I'm sure you recognize what the reaction was ... was to that. So I hope that people understand that we're saying we're willing to take a 35 cent, a 37.5 percent reduction in what'. our levy capacity is, but give us a fighting chance. My last
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comment is one of the protections given for the villages was this ... was the town hall meeting, 10 percent, then a majority. That's great, but in itself recognizes that we have a problem here. That's in essence why I believe they've made it so easy to increase the levy is because there's an understanding that they're going to need that flexibility of being able to increase over 45 cents. I don't think anybody believes that they're going to be able to continue even close to how they are now at 45 cents. Somebody mentioned they need to look at their spending. Well, I'm saying that those smaller communities that don't have the city sales tax only have property taxes with no increase in state aid, they've been cutting and cutting. I mean they already are running on half the cylinders that they ought to be.
SPEAKER WITHEM PRESIDING
SPEAKER WITHEM: One minute.
SENATOR MAURSTAD: With that, I will give the balance of my time to Senator Schellpeper.
SPEAKER WITHEM: Senator Schellpeper.
SENATOR SCHELLPEPER: Mr. Speaker and members, the problem with LB 1114 is that we're trying to put all of our towns in this one, same bracket. Whether you're Omaha, Norfolk, Stanton, Pilger, every town goes in to the same 45 cent bracket. The city of Norfolk has nine cent levy because they have a sales tax, everybody goes there to shop. The city of Pilger has $1.30 levy 'cause they have nothing there. There are only about 300 people and they need to have...be treated differently than the towns that have a city sales tax. Schools can use property tax, the small, to get their revenue and the schools all use property tax.
SPEAKER WITHEM: Time.
SENATOR SCHELLPEPER: I support the Maurstad amendment.
SPEAKER WITHEM: The item before the body now is the adoption of the Maurstad amendment to AM4131. All of those in favor vote yes; all opposed vote nay. We are voting on the adoption of the Maurstad amendment to the Maurstad amendment. All of those in
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favor vote aye, opposed vote nay. Those of you off the floor but can still hear the voice from in here, if you could come back and cast the vote it'd be appreciated. Yes, Senator.
SENATOR MAURSTAD: I'll take a call of the house and accept call-in votes.
SPEAKER WITHEM: Question before the house is, shall the house go under call? All of those in favor vote aye, opposed vote nay. Record.
CLERK: 25 ayes, 0 nays to place the house under call.
SPEAKER WITHEM: House is under call. We are voting on the Maurstad amendment. Call-in votes have been authorized, members.
CLERK: Senator Bromm voting yes. Senator Landis voting yes.
SPEAKER WITHEM: Record.
CLERK: 26 ayes, 6 nays on the amendment.
SPEAKER WITHEM: Amendment is adopted. The call is raised.
CLERK: Senator Warner would move to amend Senator Maurstad's amendment. Pull it?
SPEAKER WITHEM: It is withdrawn. Mr. Clerk.
CLERK: Back to Senator Maurstad's amendment as amended.
SPEAKER WITHEM: Senator Warner, for discussion on the Maurstad amendment.
SENATOR WARNER:- Mr. President, members of the Legislature, I rise to oppose the amendment now for a number of reasons. Number one, the situation is reversed now. With the amendment that was adopted, why, people can circulate a petition and ask for a lower levy whereas, as the bill stood, the governing board would have to go out and ask for a vote for a higher levy, which is significantly different. But that's not the real issue. The real issue to me are two things. One, it's been pointed cut that many of these small towns have retired, difficult to pay.
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That's what homestead exemption is about. By the way, you could say this is an issue of the state budget as well 'cause as you increase those levies you increase the reimbursement from .homestead exemption, which increases the state appropriations. So the state has something at stake that these entities try to find ways to be more cost-effective where they can be. It would seem to me that once you put the levies higher, as proposed here, then you begin to lose one of the incentives and then perhaps even in a significant way you start to lose one of the incentives in order to find cooperative programs where those levies could be reduced. There's been reference made to the bonded indebtedness, which is an exception. The numbers that were used that were handed out was from the certificate of taxis (sic) levied ... taxes levied. It was not an estimate. I think 35 of the cities were actually checked specifically, and a bill that Senator Hartnett had, Urban Affairs Committee had a few days ago which required the separation of those bond and operating levies in the future will make it much easier to determine. But, in any event, the numbers that are used I think are probably as accurate as can be found. Senator Hartnett indicated also, you know, this is two years off. We have the study resolution and it has the same, LR 206 concept in it, same committees involved and is it (sic) anticipated that obviously as this progresses along, as we have ... was provided in a earlier amendment with the various councils working together, finding ways that they may initiate some cost saving ways of providing local services, that we're going to have amendments, suggestions as we meet in '97 and '98, or at least those of you who are here, and all of these kinds of issues then can be addressed with a factual situation. But the thing that I think is most important is that people need to first not look for ways to have a higher levy or maintain the higher levy, but first look for ways that those costs can be restricted or, hopefully, even reduced. And as you up those levies you lose that incentive. Obviously, it's not likely under the process that's in the amendment now where 15 percent of the people has to petition to request an election for a lower vote. It's not likely that they're going to know that they could have a lower levy if some cooperative programs were done, because there's no incentive to even go out and look for them. I would urge that you not adopt the amendment, that you keep the process that is in the bill. It does have the escape clause. It's two years off but it does have the escape clause ...
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SPEAKER WITHEM: One minute.
SENATOR WARNER: ...of a vote. Certainly homestead exemption takes care of many of the smaller ones, but to the extent that you make the levies higher you increase the cost of homestead exemption when, again, mergers may be or cooperative programs may well be the way to reduce that cost. Multiple reasons, I would urge the body not adopt the Maurstad amendment as amended.
SPEAKER WITHEM: Thanks, Senator Warner. Senator Maurstad.
SENATOR MAURSTAD: Thank you, Mr. President, and I hope that we can continue to move forward and adopt the amendment. The... as I've stated before, I agree with a great deal of what Senator Warner has indicated. I believe that even at these levies that small cities and villages, the towns in our state, are still going to have to look at ways to merge, ways to consolidate, ways to provide joint delivery of services when we're taking. I think that will continue to be imperative that they look at doing that. I want to make sure that I wasn't misunderstood relative to LB 1177. 1 didn't ... I understand that those are the best numbers that are available and they, maybe through random process, were able to and are very comfortable with the fact that it is representative of what will occur. But, as he indicated, as Senator Warner indicated, right now we don't have that data available and that's why the assumption had to be made. And so all I'm pointing out is that it may be very accurate; it may not be; it may be close. But I just wanted to make sure people were aware that it's not absolute. The issue with the referendum, the governing board would have to adopt an ordinance or resolution to increase the levy over... over 50 cents. Then, at that point, it would be treated like any other municipal issue in which the citizens have the referendum right. They would have to provide petitions for 15 percent of the votes. These are the same small towns that only need to get 10 percent into a building on a particular night at a particular location. It's only 5 percent in addition to that and they don't have the necessarily leave the coffee table or the coffee house or wherever the y might run into somebody that's carrying a petition to get the additional 5 percent. So I think that it's relatively easy to generate the 15 percent signatures. Even in the size of town 'as Beatrice, about 12,500 people, they've had three referendum issues in the past couple years where they were able to generate enough signatures on a petition, but that's
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only the first step. It then goes back to the governing board and the governing board, depending upon the number of signatures, depending upon the issue, can decide to accept the referendum at a public meeting. They can agree we'll move it back to what the referendum indicates. Or they can have an election either, a special election or have it on the election with general or primary, at primary time. You know, the costs of these elections, I was going to ask Senator Pedersen to visit a little bit. I think he indicated this before. There are some circumstances where certainly the cost of the elections to, if they chose to do that in either the referendum situation or as previously provided under the bill, those are costly. In fact, they might be more costly than what the difference in the levy would raise. And so I think that we need to keep that in mind in providing this other avenue for people to express their will at the local level. I'm not going to get into the other... the other arguments that were made on the amendment 'cause they're essentially the same now.
SPEAKER WITHEM: One minute.
SENATOR MAURSTAD: So, with that, I would yield the balance of my time, Mr. President.
SPEAKER WITHEM: Senator Wickersham.
SENATOR WICKERSHAM: Thank you, Mr. President. I'm standing in opposition to Senator Maurstad's proposal for a couple of reasons. One, this debate,. Senator Maurstad, is not about the status quo, at least not in the broad scope. I view your amendment as an attempt to preserve the status quo, and maybe that is an unfair characterization. If it is, I'm sure you'll tell me about it, but that's my perception, that your amendment is an attempt to hold the status quo. The status quo is not what I'm hearing we need to preserve and, in fact, what I constantly sense and hear is that it is time to make significant changes. The opportunity for change that is presented in 1114, as it now stands before you, may not be perfect, but it is not the status quo and it is not intended to be the status quo. it is intended to produce change. Change is always discomforting. We don't even like to change our own rules at the start of a session because it's uncomfortable for us. We don't know what the new rule will do. We don't know how we'll behave as a collective body. We don't know how we'll respond. We don't
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know how we'll get through the session if we change the rules, but we do. We both change and we get by and we accomplish our purposes. It is not time to maintain the status quo. I was somewhat interested in Senator Maurstad's comments that the cities had not received any additional state aid since 1978. 1 haven't been in the Legislature since 1978, but I've been here long enough to know that we provide a variety of kinds of state aid, what I would characterize as state aid, to municipalities. They have access to the sales tax. They have access to keno. They get the bingo tax, they get gas tax. They have a fund that is expressly set aside and I acknowledge that it never did what it was supposed to. It didn't do that for the cities and it didn't do it for the counties to replace the revenues that at one time would have been raised by personal property tax. They have access to MIRF and I'm probably leaving out a bunch of them. Senator Hartnett, I think the last time we discussed this issue, cataloged some of the resources that are available to cities and municipalities. Those resources are vastly different than the resources that are available to other political subdivisions in the state. Some of them are in the same counties, have access to gas tax. Counties have access to property tax. Schools have access to property tax and a much larger state aid pool. You can work out some of the other differences if you want. Other political subdivisions don't have access to those kinds of revenue sources. It isn't unusual that we don't have a large pool of direct state aid dollars that we appropriate each year for municipalities. We've allowed them access 'to other resources, resources that we have denied to other political subdivisions. I have listened to Senator Schellpaper and others as they're describing the plight of small communities in their district. I live in a small community.. It's under 300 people. All of the streets are paved. We have a sewer system that is in very good condition. We have a city water system that is not even chlorinated because the water that we use is pure enough and clean enough that we don't have to do that. That city would be affected by LB 1114. It has a levy that is in excess of 45 cents. But I am confident that that small...
SPEAKER WITHEM: One minute.
SENATOR WICKERSHAM: ... that small community that I live in will be able to meet the constraints of 1114. Now, I have other communities in my district that I am not so confident about
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because they have very large expenditures for public safety, police, and I understand their problem. They have no other way to cover their police costs above and beyond property tax revenues and maybe some of the other revenue sources. I'm not sure that they can do it because of their specialized needs, but I know that, unless we set a broad scale policy that is in 1114 and try to make policy only for the two communities or maybe the three communities in my district that I think might have some trouble meeting the constraints of 1114, that we will do nothing and nothing is not the answer in today's environment. I oppose Senator Maurstad's amendment.
SPEAKER WITHEM: Senator Beutler. Do I see five hands? I do. The question before the body now then is, shall debate cease on the pending Maurstad amendment? All of those in favor vote aye, opposed vote nay. Record.
CLERK: 26 ayes, 0 nays to cease debate.
SPEAKER WITHEM: Debate is ceased. Senator Maurstad, you may close on your pending amendment.
SENATOR MAURSTAD: (Microphone not activated)...allude to earlier was brought out because I was ... and maybe I misinterpreted a comment, but I felt that there was some indication that if we went to what I'm proposing it would be different than what we have now, when in effect what we're going to is different and certainly is not the status quo. I was just trying to answer the argument that we shouldn't do what I'm proposing because it was in some way or another something unusual , and I might have misinterpreted that. I don't disagree with Senator Wickersham's points. As usual, he makes excellent arguments. The issue, though, is some can access the tools that the Legislature has provided them and some can't because of their size. And I think that the charts, in effect, bear that out in why you have a lot fewer first class cities that are affected, and primary and metropolitan of course are not, in comparison to the smaller ones. I want to focus everybody back once again to the...what I think is something that we're trying to address and that is 80 percent of the property tax relief that's going into the big barrel from municipalities,, 80 percent of that is coming from second class cities and villages and I don't believe that 1177 will completely fulfill that difference. I believe that the future, we can look at the past and get an indication of what
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the future will hold and that future and the past would tell us that municipalities are down the line in the pecking order, as I indicated before, which I understand the reason why, but I think it's important that we acknowledge that. I think this would be an appropriate change. It certainly, I don't believe, dismantles LB 1114. The schools, of course, with their tiers address this into a certain extent, however, differently, because in effect we're comparing apples to oranges when we compare cities and towns and schools. There's a wider diversity in the school system, for example, state aid program, of those schools that are the exact same size. There's a lot narrower band with municipalities and villages. So I would hope that those that supported the amendment to the amendment will be able to continue to support the amendment. I think it will be good public policy. The smaller towns will still have to make cuts. They'll still have to look at merger and consolidation, joint delivery of services. They're still going to share the pain and would ask for the adoption of the amendment.
SPEAKER WITHEM: You've heard the closing. The question before the body is the adoption of the Maurstad amendment. All of those in favor vote aye; those opposed vote nay.
SENATOR MAURSTAD: (Microphone not activated)...for a call of the house and roll call vote.
SPEAKER WITHEM: Question before the body is, shall the house go under call? All of those in favor vote aye, opposed vote nay. Record.
CLERK: 25 ayes, 0 nays, to place the house under call.
SPEAKER WITHEM: House is under call. Members not excused please return to the Chamber. Unauthorized parties leave the floor. Members in the Chamber please check and make sure that you have recorded your presence. Senator Schimek, could you check in, please. Senator Beutler. Senator Wesely. Senator Bromm, could you check in, please. Senator Lindsay. Senator Maurstad, how do you, when Senator Lindsay's here, how do you want to proceed? Senator Lindsay is entering the Chamber. Mr. Clerk, proceed to call the roll, please.
CLERK: (Roll call vote taken. See page 1800 of the Legislative Journal.) 18 ayes, 12 nays on the amendment.
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SPEAKER WITHEM: Amendment is net adopted. The call is raised. Would announce that the agenda calls for us, at 7:00 p.m... to move to consideration of LB 1189. We will do so. Mr. Clerk, any items for the record?
CLERK: Yes, Mr. President, I do. Senator Withem, amendments to 1368 and to 1375 to be printed. That's all that I have,
Mr. President. (Journal shows an amendment by Senator Lindsay to LB 681. See pages 1801-04 of the Legislative Journal.)
SPEAKER WITHEM: Thank you, Mr. Clerk. We will turn to LB 1189. Mr. Clerk, can you tell us what the first motion pending on LB 1189.
CLERK: Mr. President, with respect to 1189, the next amendment I have to the bill is by Senator Lindsay. Senator Lindsay, 4155, Senator.
SPEAKER WITHEM: Mr. Clerk.
CLERK: Mr. President, I have a priority motion. Failed to recognize it. Apologize to the Senator. Senator Bernard-Stevens would move to reconsider the amendment considered last evening from Senator Coordsen, AM4114. (See pages 1561 and 1739-40 of the Legislative Journal.)
SPEAKER WITHEM: Senator Bernard-Stevens, to open on your motion to reconsider.
SENATOR BERNARD-STEVENS: Thank you, Mr. Speaker, and thank you, Mr. Clerk, for .... It made no difference. We would get to it one way or another, Patrick. Members of the body, this is not a motion that if you support will stop the automation process, and I want to emphasize that from the very beginning. A motion ... what I'm asking to do is to reconsider the Coordsen amendment which allowed for, I think it was,- 79,000 dollars of General Fund dollars. If you vote to reconsider, obviously, I would hope then that we would not do the Coordsen amendment. With that, let me be very clear what I'm trying to do here. I am personally am in favor of the automation project. I want to go forward. What I would rather do, and I've had some discussions with Senator Coordsen and others on it, is I would rather, as we're talking about the property tax situation, as
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