Debate Transcripts
LB 1114 (1996)
Select File
April 3, 1996
... capable of transacting business, I would propose to sign and do sign Legislative Bills 43, 700e, 70OAe, 1050e, and 1050Ae. Mr. Clerk, any items for the record?
CLERK: Not at this time, Mr. President, thank you.
SPEAKER WITHEM: LB 1114.
CLERK: (LB) 1114, Mr. President, has been discussed on Select File. The next amendment I have to the bill is by Senator Vrtiska. Senator, 4148 in front of me. (See page 1614 of the Legislative Journal.)
CLERK: Senator Vrtiska.
SENATOR VRTISKA: Thank you, Mr. Speaker and members of the body. My amendment to 1114 is a simple amendment. Mainly what it does is requires the Revenue Committee to study the issues of replacement revenue and submit a report to the Legislature by next session. I offered this amendment in a ... to somehow give assurance to those portion of the public who are concerned about-, the Legislature's commitment to provide some form of replacement revenue in the future. It does not lock us into any specific form of replacement revenues, but simply details that the ... there will be a study male to determine whether or not it's proper to address the concerns of some of those under this legislation who have some questions and let them understand that we do intend to take a look at that. Now I understand that Senator Warner has introduced a interim study resolution on this issue and I guess I'd like to ask Senator Warner about his intentions on his idea of a study and get some of his thoughts as whether or not the language in this amendment is consistent with the ... his intentions at this time. So if I could ask Senator Warner those questions, Mr. Speaker.
SPEAKER WITHEM: Senator Warner.
SENATOR WARNER: Mr. President, members of the Legislature, Senator Vrtiska, my intentions are honorable.
SENATOR VRTISKA: Well, I understand that.
SENATOR WARNER: I ... the ... as you know, there has been introduced a continuation of what was the LR 206 Committee that
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involved the eight different committees, all of whom would have an involvement, and I don't remember what the new number of that resolution is. I assume it will be approved by the Exec Board and will be put into effect and obviously one aspect of that whole issue is the revenue issue. It would...just as an opinion, the concept in the whole group of bills in part is that people are going to look for ways to be more cost efficient and I'm not, personally, interested in looking for alternative revenue, not knowing what amount, not knowing, you know, what areas of government that have become as efficient as they can until some of this process is over. But, like some who have thought this is all that is needed, I've never said that. I've always said that there will be some alternative revenue needed at the end and I believe that to be true and there isn't any doubt in my mind that those alternatives are going to be explored with what we have in. I would have a problem with the amendment, only to the extent that I don't believe it's necessary to have a statutory authorization where we already have in place the interim study that involves all the committees and not just Revenue Committee.
SENATOR VRTISKA: Well, Senator Warner, if I might, I guess the only purpose, and I've discussed this a little with you prior, the only purpose that I can understand for the amendment is to make ... send a message out, and I agree with you that we need to look for the efficiencies and the ways to reduce spending as much as we can. But, on the other hand, in those particular situation, I guess I felt like it was maybe important to send a message out that we are not just doing this and then walking away from it but we were, in fact, going to continue to study the problem. This does not direct in any way that the Legislature, in fact, make up funds but only asks that they do a study to determine whether there's the necessity and whether in fact this would provide any measure of ... I suppose you could say good will among the people to say that we are, in fact, understand some of the problems and are going to at least take a look at what could be done to those who are the most severely affected. And I don't want to push this amendment if you're ... if you have a great deal of objections to it. I just felt like it was something that sort of sends a message out there that we, even though we have felt necessary to pass this package, and I do believe in the process we're going in, I'm just trying to make a suggestion that perhaps it would ease the minds of some of the people to know that we were at least
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looking and that they would have an opportunity to come in and express themselves as to what they think might be a possible way in certain instances to alleviate some of their problems. So I guess I'll leave the discussion, turn the suggestion back to you and if you have a strong opposition and feel there's something you can do that's :as well or better then I will withdraw my amendment and I'll leave that discussion, that decision up to you. Senator Warner.
SPEAKER WITHEM: Senator Warner.
SENATOR WARNER: Mr. President, members of the Legislature, thank you, Senator Vrtiska. I would oppose putting the amendment in, but it's a much broader issue than just that. As you know, there is a number of things that are going on. I've indicated a continuation of the old LR 206 Committee in which at least the. eight committees, if not more would have a direct jurisdictional responsibility, are going to be involved. There is another process that is also going to be involved which is looking at all the various mandates of local government. That, I believe, is a special committee, as it is proposed under the direction of the Executive Board, as I recall. And it isn't ... my point being is that the issue is not only one of additional revenue. Of equal importance is the other things that can be done that can relieve some of the costs to local .government, and I would be concerned if the only thing that we're going to emphasize in the legislation is alternative revenue when the other aspects, which are also included in the study resolutions, are much broader, recognizing that it is a combination of things. Some of those ... I don't think that one...one mandate. has been adopted yet, but it's pending and I don't know of any objection to it and that could have been done by a resolution too, except that the time period is past for that. But I ... you know, It's one of these 'amendments doesn't hurt anything, but I think it may, in some respects, give an emphasis to one portion of the issue rather than the whole issue, which is not just revenue, it's things that we need to do to reduce their cost, things that we need to do to make it more cost efficient, things that we can do to reduce some obligated expenses because of statutes or rules and regs. I would anticipate in case of schools that the Department of. Education, excuse me,, the State Board of Education has offered to make efforts and I think we need to under ... for subdivisions need to realize this is a multiple approach of areas that might reduce
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the cost to taxpayers for governmental services.
SENATOR VRTISKA: Well, I think what I ' m going to do is leave the amendment here for a little bit to see if there's other people who would like to speak to it to get some idea what their thinking is and then decide what I should do with it. So, for the present time, I'm going to leave the amendment up and see if there's any discussion develops around it. Mr. Speaker..
SPEAKER WITHEM: Yes, sir, Senator Vrtiska.
SENATOR VRTISKA: I'm going to leave this amendment in place for a little while to see if there's any other discussion that develops around it, and if there doesn't seem to be any interest or feels that what Senator Warner has talked about is in fact sufficient then I'll pull it, but otherwise I'd like to hear if there's any discussion on whether in fact this could be of any value in the minds of some people. Thank you.
SPEAKER WITHEM: Senator Vrtiska, I hate to be the bearer of bad news. There are no lights on. You're recognized to close.
SENATOR VRTISKA: Well, obviously, there's nobody very interested in whether or not this amendment is a part of it and I guess ... and, to be fair about it, Senator Warner does have some amendments in his bill that will, in fact, probably do, I would hope, about the same thing that I'm attempting to do and so, not to hold the thing up, I will withdraw the amendment.
SPEAKER WITHEM: The amend.... You're withdrawing the amendment?
SENATOR VRTISKA: I will withdraw the amendment.
SPEAKER WITHEM: The amendment is withdrawn. Mr. Clerk.
CLERK: Mr. President, the next amendment I have is by Senator Maurstad, but I have a note from Senator Maurstad he would ... wanted to withdraw.
SPEAKER WITHEM: It is withdrawn.
CLERK: Mr. President, the next amendment I have is by Senator Schellpeper. Senator, AM4264. (See page 1716 of the Legislative
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Journal.)
SENATOR SCHELLPEPER- Yes, Mr. Speaker...
SPEAKER WITHEM: Senator Schellpeper.
SENATOR SCHELLPEPER: ..and members, this is more of a technical amendment. It deals with county ag societies. I had a meeting Sunday afternoon with about 30 counties and they decided that ... well, currently, in the budget they are outside of the county budget and, according to the way the bill is, they would be part of the county budget lid, which would be the 30 cents. Since they have their own separate budget, they're outside the county levy, they're under their own lid laws, they have their own levy and everything, they want to be in the 15 *cent levy limit. They're considered a...kind of a quasi-governmental subdivision. They've been in existence since I think 1860 or 1870. They want to be with the fire districts, the hospital boards, the library boards, the cemetery boards, and things like that. In visiting with Jack Mills, he said he thinks this is probably a better place for them to be rather than under the county lid because currently they're not under the county lid, so this would put them on with that 15 cent levy limit. Also, in their ... when they're elected currently, they're elected by just their boards. If you're a board member, you can vote on their board. And I told Jack Mills that next year I want to come back in and put a bill in that would make them elected by a countywide basis and I think that's where they have to be. Currently, they're not and there isn't time this year to get that all done 'cause they have to be elected by districts and everything. But I want to do that next year and I assured him that I would do that. But this amendment will put them where they want to be, is in that 15 cents. And we're ... they are currently so it's nothing different to where they're at right now. I'd be glad to answer any questions.
SPEAKER WITHEM: Senator Warner.
SENATOR WARNER: Mr. President, members of the Legislature, I'd rise to support Senator Schellpeper's amendment. one of the subdivisions that is...maybe is, maybe isn't, but in any event it's still within the 50 cent maximum levy as it is now. Fact that they would be included in the 15 cent doesn't give them any more flexibility than if they were in the 30 cent probably. In
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any event, it's okay. I would be support of the amendment as a clarification, if nothing more, that clearly these ag societies that operate county fairs would be considered in that 15 cent variety of subdivisions rather within the county and that would leave no question which area they're involved. So it's probably, as much of a clarification as it is anything.
SPEAKER WITHEM: Senator Schellpeper, do you have a closing?
SENATOR SCHELLPEPER: Yes, Mr. Speaker, just one comment, that this does not change anything with the budgets. They still have to go through the same process and, as Senator Warner stated, it does, not allow them to have any more authority and their budget have to be approved by the county board and the bill, 1085, before us said that, it shall be approved or, yeah, shall be approved by the county board, not may be approved, so I think it's just a clarification. I move for the adoption of the amendment. Thank you.
SPEAKER WITHEM: Question before the body is, shall the Schellpeper amendment be adopted? All of those in favor should vote aye; those opposed should vote no. Have you all voted? Record.
CLERK: 25 ayes, 0 nays, Mr. President, on the adoption of Senator Schellpeper's amendment.
SPEAKER WITHEM: The Schellpeper amendment is adopted. Mr. Clerk, anything for the record?
CLERK: Mr. President, a reminder the Executive Board will be meeting in Room 1113 at noon, Exec Board at noon. A new resolution, Senator Robak offers LR 467. Communication from the Governor to the Clerk. (Read communication re; 414, 414A, 1044, and 1044A.) And Senator Wehrbein has amendments to 1290 to be printed. That's all that I have, Mr. President. (See pages 1843-44 of the Legislative Journal.)
SPEAKER WITHEM: Senator Kristensen.
SENATOR KRISTENSEN: Thank you, Mr. President. I move we recess till 1:30 p.m.
SPEAKER WITHEM: All of those in favor say aye. opposed? We
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are recessed.
RECESS
SPEAKER WITHEM PRESIDING
SPEAKER WITHEM: Good afternoon, ladies and gentlemen. The Legislature is about to reconvene, and I would invite the members back to the Chamber to record their presence so we can acquire a quorum and continue with our debate on LB 1114.
PRESIDENT ROBAK PRESIDING
PRESIDENT ROBAK: Thank you, Mr. Clerk. We return to Select File and LB 1114.
ASSISTANT CLERK: Madam President, the first amendment I have is from Senator Beutler. But I have a note that he wishes to substitute and offer 4334. (Amendment is on page 1806 of the Legislative Journal.)
PRESIDENT ROBAK: Seeing no objection, it is so ordered. While we're waiting for-the Senator to return to his seat, Senator Bernard-Stevens announces that there are seven eighth graders here from Brady School (introduced others from the city as well).. They are in the north balcony. Will you stand and be recognized,. please. Senator Kristensen announces that there are 18 fourth graders here from the Axtell schools. (Introduced teacher as well.) They are also in the north balcony. Will you stand and be recognized, please. Senator Wesely and Senator Landis announce that there are 31 fifth and sixth graders here from St. Patrick's School in Lincoln. (Introduced teachers.) Will you stand and be recognized. And there are four students, (introduced students) from Fremont with their teachers (introduced). They are under the north balcony. They are from Lincoln Elementary in Fremont. Will you stand and be .recognized, please. Welcome to the Nebraska Legislature. Senator Beutler.
SENATOR BEUTLER: Madam Lieutenant Governor, members of the
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Legislature, this in all probability will be the last amendment that I will attempt on 1114. It's a very important amendment, it's a very most important amendment that I've offered. It is in the Journal, I believe. If it's not, it really doesn't matter because the concept is very simple. It basically says that the sales tax will be raised from five to five and one-half percent, which will raise approximately $80 million, and that $80 million, other than what goes ... other than motor vehicle trailer and semitrailer sales, will be dedicated for school aid purposes. So that this particular package, which is defective, in my opinion, and unnecessarily cautious, in my opinion, for some very convoluted political reasons, would at least have added to it for the protection of the schools who, in some cases, may be losing as much as 30 percent of their property tax revenues, is adding a measure of replacement revenue, not for the entire amount, but for a portion of which perhaps comes to a ,third or a fourth of the amount of money that will be lost. I wanted to take a moment and just read a little piece to you of a book called Summer Meditations. It's by a fellow named Vaclav Havel, who many of you will recognize as the President of the Czech Republic. It's about politics, morality and civility and about his transition from private citizen to the political life, and has some things in it, I think, that are worth thinking about. He says near the beginning of the book, despite the political distress I face every day, I am still deeply convinced that politics is not essentially a disreputable business. And to the extent that it is , it is only disreputable people who make it so. I would concede that it can, more than other spheres of human activity, tempt one to disreputable practices and that it therefore places higher demands on people.- But it is simply not true that a politician must lie or intrigue. That is utter nonsense spread about by people who, for whatever reasons, wish to discourage others from taking an interest in public affairs. Of course in politics, as elsewhere in life, it is impossible and pointless to say everything at once... all at once to just anyone. But that does not mean having to lie. All you need is tact, the proper instincts and good judgment. One surprising experience -from high politics is this, I have discovered that good judgment is more useful than a postgraduate degree in political science. It is largely a matter of form, knowing how long to speak, when to begin and when to finish; how to say something politely that your opposite number may not want to hear; how to say things always that ... what is most... how to say always what is most significant at a given moment and not to
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speak of what is not important or relevant; how to insist on your own position without offending; how to create the kind of friendly atmosphere that makes complex negotiations easier; how to keep a conservation going without prying or without being aloof; how to balance serious political themes with lighter, more relaxing topics; how to. plan your official journeys judiciously and to know when it is more appropriate not to go someplace; when to be open and when reticent and to what degree. But more than that it means having a certain instinct for the time, the atmosphere of the time, the mood of people, the nature of their worries, their frame of mind. That, too, can perhaps be more useful than sociological surveys. An education in political science, law, economics, history and culture is an invaluable asset to any politician, but I have been persuaded again and again that it is not the most essential element. Qualities like fellow feeling, the ability to talk to others, insight, the capacity to grasp quickly not only problems, but also human character, the ability to make contact, a sense of moderation, all of these are immensely more important in politics. I am not saying, heaven forbid, that I, myself, am endowed with these qualities, not at all, only Senator Chambers is. (Laughter) To sum up, if your heart is in the right place and you have good taste, good judgment that is, not only will you pass muster in politics, but you are destined for it. if you are modest and do not lust after power, not only are you suited to politics, you absolutely belong there. The sine qua non of a politician is not the ability to lie; he need only be sensitive and know when, what, to whom, and how to say what he has to say.. It is not true that a person of principle does not belong in politics. It is enough for his principles to be leavened with patience, deliberation, a sense of proportion and an understanding of others. It is not true that only the unfeeling cynic, the vain, the brash and the vulgar can succeed in politics. Such people, it is true, are drawn to politics, .but in the end decorum and good judgment will always count for more., And so you say what has any of this to do with a half cent sales tax. And I read this to you, I guess, because if I cannot shake you out of the mood that you're in, there will be no votes for this. And the mood that you're in has to do with convoluted game of anticipating what certain petitions out there mean, and who might sign them, and what might be done, and how we're going to manipulate the people into not signing those petitions, and going along With this package which we will bet all our marbles we can straighten out in the next two years.
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And I say to you that there's something in what he says here and in the implicit trust that he has in people generally, that I share generally, that I think we should all share generally, and that the people in the context of this given situation, given a little time, will understand that every solution, everything we're doing here with this whole package implies replacement revenues, there will be replacement revenues. There are tactics and there are strategies, but I want to argue with you today that the direct thing to do, the fair thing to do, the wise thing to do is to level with the people, to put with this package a half a cent sales tax, at least, that goes into effect January of '99, and to proceed on the basis of trust with the people and not on the basis of trying to manipulate this situation. If we do, what we have to make up in the next two years will be too large a thing, and the schools will not be held harmless; they will be hurt seriously, possibly very seriously. That's a risk I do not think I want to take. And this bill will be the hardest that I've had to deal with in several years. Thank you.
PRESIDENT ROBAK: Thank you, Senator Beutler. Senator Avery announces that the following guests are here today, .(introduced guests from Gretna). They are fourth and fifth graders with their sponsors. They're sitting under the south balcony. Will you all stand and be recognized, please. Welcome to the Legislature. Senator Warner.
SENATOR WARNER: Madam President, members of the Legislature, perhaps I would like to perhaps philosophize a bit on this issue as well. There's a one-liner that was given to me, John Kelly (phonetic) used to be an assistant to Governor Morrison, he gave me several that I like that I've used, but one that I remember well: You deal with things the way they are, not as you wish they were. And in part ... and I'll talk about the property tax issue, in part that's what we're doing, 'cause there is the perception, and it's not just in Nebraska, it's across the country, that government somehow can be more efficient, that government is doing things it doesn't need to do, a whole series of those kinds 'of perceptions, perhaps some real, some perception. But part of the concept here is that whether it's real or perception, and perceptions are much more difficult to deal with.- But whether it is either, we're not going to start down the road that we've done and been criticized time and time before, and I would defend what we've done before, but that you
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increase one tax to reduce property tax and it's a temporary situation. This we hear constantly. Fact that I'm not... I have no interest in this legislation because of petitions.* That's not a motivation. It is true that if we do nothing, I suspect petitions may gain some acceleration, may not.. I don't know. But what I do believe is that there is a belief that we need to be looking at restructuring how we provide local services, that a we need to be looking for ways to be more cost efficient. That no longer is the answer, one, that many of the bills have been introduced in recent years where we increased one tax to reduce another, those are not the answers now, nor is it only a tax issue. It's also the issue we just talked about somewhat this morning with the constitutional amendment that is in process, hopefully, of being enacted and placed on the ballot. But it's the issue of trying to encourage cooperative efforts, it's .intended and will be an amendment attached to (LB) 299, when we get to that, that will be looking at the various mandates that we have on local government, and things that perhaps will be eased. We had receipt of a letter from the State Board of Education along the same lines, where they wanted to look at mandates that they have to rules and regs that might ease the cost of local government in that case schools, or we're not just talking schools, but all of this is designed for a process over a couple of years. And there are those who will tell you that's overly optimistic, and perhaps it is, but I don't think so. I have a lot more faith in the public than perhaps some. And my faith is if there is a process in place where they see that their local governments, as well as the state, is looking for ways to try to. be more cost effective, to avoid unnecessary expenses, to emphasize those priorities that we know are there, 'that then you build a confidence.
PRESIDENT ROBAK: One minute.
SENATOR WARNER: If it takes additional alternative taxes you build a confidence that that will be acceptable, but it's not now. And I would have a concern if this is attached here, I suspect it will be vetoed, obviously would not be overridden, and that's ... will be the end of the process, and maybe that's what some would like and let fate be whatever it is outside this body, and that's fine. But this is laying out a two-year process. The implementation of a study resolution, which will involve a number of legislative committees again looking at this whole broad scope is what's envisioned, and I guess it can fail.
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it won't fail nearly as bad as to do nothing. that will fail even more. And so I would urge that you not adopt this amendment. True, there may need -co be some ...
PRESIDENT ROBAK: Time.
SENATOR WARNER: ... but there I s no way you can justify at this point until there is a more cost-effective, efficient operation, at least perceived as well as real.
PRESIDENT ROBAK: Thank you, Senator Warner. There are 25 adult UNL French students here. (Introduced their sponsor.) They are all visiting in the north balcony. Will you all stand and be recognized, please. And Senator Hilgert announces that Kathleen Gast is here from Omaha. 'Kathleen is sitting under the south balcony. Will you stand and be recognized, please. Welcome to the Legislature. Senator Crosby, your light is next.
SENATOR CROSBY: Thank you, Madam President and members. And I'm glad that I'm not in the French class, 'cause that's one class I had a lot of trouble with. I can remember, "je vasem (phonetic) beaucoup." Can you? Yes, of course. We can all remember that one. So right now we're not talking about love though. We're talking about people who have deep-seated hate of paying taxes. I That's what we're talking about. And I've said this before, I'll say it again, we have to pay taxes, that's our dues for living in a free society. But I will agree that each entity, subdivision, or whatever can and should always look at their budgets and see if they might do better and more efficiently with fewer dollars. But I did have a conference, I've had conferences with my school board and with teachers and with constituents, and one constituent in particular, who is of course very close to the public schools because he happens to be a school board member, but he's a very good one, he's against, 299 and 1114, both; thinks it's Proposition 13 from California all over again, which, in many ways, it is. But Lincoln Public Schools' budget just ... so many of you like to put things in the record, I'll put this in the record. Lincoln Public Schools' budget, in round figures, $170 million; 35 million of that goes for special ed, and there's no way to control nor limit that amount. So you have 135 million left for the budget, other than special ed; 110 million goes for teachers' salaries, that does not include administration. So we have about 25 million left. He thinks, his estimate and what the board has been working
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with, they think they're going to lose about $50 million on 1114. So they're going to be $25 million in the hole. So that half cent sales tax sounds awfully good. I'm pleased that Senator Beutler brought the amendment so-we at least can ... we must face up to it that eventually we are going to have to figure out some way, after we pass these bills, and I assume they're going to pass, they've come this far, I don't know why they would stumble and fall now. But to start with in Lincoln, now that's my school, so that's what I'm talking about, in Lincoln teachers can't strike but they can go to CIR. And we don't compare our teachers' salaries to people... to teachers in western Nebraska. They're compared to the suburbs ... suburban schools in Kansas City, or Des Moines, or Omaha, that kind of comparison. The school board feels they have very little control over teachers' salaries. The other thing that will happen, and they really believe this will ... I think it may have happened already in some instances, there are... they'll hire fewer teachers, so there would be more students in each class. Now 25 students is what everyone thinks is a good number, not too many, not too few. Some people who went to school a long time ago think, well, why not 40.or SO in a class. Well, part of the problem, and a big part of the problem here in Lincoln especially is that 35 years ago there were about three-tenths of 1 percent special needs children in the Lincoln Public Schools. Now we have at least 25 percent special needs children. In a class of 40, 10 will be ... have special needs. It takes one teacher to manage six special needs children alone. So the teachers end up, in a way, just being baby-sitters.
PRESIDENT ROBAK: One minute.
SENATOR CROSBY: And their salaries are not affected because of their contracts and the way the. contracts work for each individual teacher and for the teachers as a whole. One last little number that I think is interesting, our superintendent makes around 100 000, that's another round figure. Thirty-two thousand students in four other schools in Lancaster County, they cobine, they serve 5,000, and the combined cost for those superintendents is about 250,000. So when you talk about consolidation, it isn't just out in the small areas that we need to do that. We could have a sizable savings overnight if we could bring those 'schools into one school district. I agree with him on all of these things, but I also have so many taxpayers. My survey, which the surveys that you do by mail are
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not scientific, but they do give you a reading of what people are ...
PRESIDENT ROBAK: Time.
SENATOR CROSBY: ... thinking about. And most of them say raise the sales or income tax. Thank you.
PRESIDENT ROBAK: Thank you, Senator Crosby. Senator Schimek.
SENATOR SCHIMEK: Thank you, Madam President, members of the body. it must be Lincoln's day at the microphone, I don't know. But I am also rising to speak in favor of the Beutler amendment. And there are a number of reasons for that, but I guess probably the most important reason is I recently met, just last week, late with one of the ,ieighborhoods in my district. And they are extremely concerned and scared about their school. And they are trying to follow what's going on around here, and I don't think they could possibly have a full grasp of it, because it's awfully difficult even when you're here on the floor to follow all the nuances of these bills. But they get the general picture of what 299 and 1114 do. And, you know, their...practical their first question was, why don't you find some replacement revenues? Why are you waiting all that time? And I tried to explain the rationale that I thought the Revenue Committee had, and that is that basically get people into the situation where they really have to be concerned and have to think about what services they could cut, or what mergers they could have, or what services they could share. But I don't think that... I don't think they bought that. I think they think' it's part of our responsibility to find some of those replacement revenues. And I don't think there's any question on the part of those people who were at the meeting that we can do things, that we can cut services, that we can cut budgets, that we can do some mergers. I don't think they are questioning the desire to find some ways to do that. The second thing I want to mention to you is that I'm probably worried ... I'm just as worried, in some ways, about those petitions as anybody else is. But I can't ... I don't think I can base my vote in here on what might happen on those petition drives. I have to base my vote on what I think is the best policy for the state of Nebraska. And, you know, I'm not sure that the public will support any of these petition drives either, once they find out what the essence of the petitions are, what they will mean in terms of
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cuts in services and reductions in property taxes. I'm not sure I think they're going to support any of those petitions either, once they get on the ballot, if they get on the ballot. I think everybody is talking about wanting property tax reduction, but they don't just mean any property tax reduction. They want it to be reasonable and they want to retain their services. I don't think people want their services cut. They want them trimmed maybe, but not cut. Thirdly, I'm not certain that once we start down this road that it's going to be easy to get off this road. And, you know, one of the pieces of mail that I received last week that illustrates this point, I think, was from the Lincoln Chamber of Commerce who said this doesn't go far enough, that we ought... the spending limit should be extended to include state government expenditures, never mind that we may have cuts from the federal government and we may have to provide more aid to the local subdivisions, but we ought to be included in this; secondly, the spending limits, including those on state expenditures, should be extended indefinitely rather than ending after two years.
PRESIDENT ROBAK: One minute.
SENATOR SCHIMEK: The tax rate cap should be extended to include sales and income taxes. And an exception .... Fourthly, an exception to spending limits should be allowed for population growth, inflation and emergencies, which of course we've already done to some degree. That scares me! They think we should go even further. 'Maybe, Senator Warner, we're on the right path and we're right about in the middle, I don't know. But I'm afraid of what might happen once we start down that path. I think LB 299 is tough, especially in the second year, but I think I could vote to support that. But I'm not sure that I could support LB 1144, although I know we have a little time in which the people can take a vote, but I think it's awfully drastic. And I think that a lot of entities like the Lincoln Public Schools have already taken steps to do some of the things like cut budgets, talk about mergers ....
PRESIDENT ROBAK: Time.
SENATOR SCHIMEK: ... talk about sharing services. Thank you.
PRESIDENT ROBAK: Thank you, Senator Schimek Senator Beutler.
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SENATOR BEUTLER: Madam Lieutenant Governor, members of the Legislature, I'm glad that Senator Schimek talked about the Lincoln Chamber of Commerce letter, which has been passed out to you, only because ... not to be necessarily critical of it, but only to point out to you what this chamber of commerce, what probably every chamber of commerce in the state will propose, what the State Chamber of Commerce will propose. I'm trying to point out to you how very difficult, and I think she was trying to point out to you how very difficult this situation is that we are assuming for the future. Just think about the numbers for a minute. If we have $250 million of school money to be made up, how much of it do we make up? How much of it do we say will come about by savings, will have savings in a certain amount, will force some efficiencies? Although, school consolidation is the main efficiency, and we're not doing anything about that at this point. Let's say 60 percent we're going to replace. Is there anybody here that thinks they can do... get better than 40 percent efficiency out of that figure? I think realistically we all realize we've got to replace at least 60 percent, that's a very conservative figure, that's $150 million. The half a cent sales tax that's being suggested to you today, I think I misspoke earlier and said it was $80 million, it's really only $70 million. So that means out of a minimum amount that you would want to replace, this isn't even half of that. That means if we do nothing now, all of that we have to do in one of the next two years in order to save the schools. Well, I guess that makes it easier for the 24 or 25 that are up for election this time around, they won't have to make that decision at the critical point in time before their election. Makes it pretty difficult for those who are up for election next time to vote for that whole pile of change all at once. It's going to be traumatic. Seems to me it might make a little sense for us to share the pain and do some of it this time so that all of it next time is not solely borne by those up for election next time. In any event, my main point is it's a huge hunk for all at once. And the chambers of commerce are not only saying we do not want you to raise income tax, we do not want you to raise sales tax, we do not want you to expand the sales base or the sales tax base to include services, we want you to keep on expenditure lids. Furthermore, furthermore, and here's...here's the thing to really consider, here's the* thing to really consider, furthermore, they announce in this letter, we're going on the attack, we want a cap on state expenditures, we want a cap on state expenditures and we want it now. Well, my friends,
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if we're defending state expenditures, or if they're successful in capping state expenditures, how is it that you're going to help the schools a year or two from now? What source will you use? What tools will you have? Perhaps my argument should be you better do it now, you may not even have the...
PRESIDENT ROBAK: One minute.
SENATOR BEUTLER: ...tools in two years. we may be thinking more... if today we're thinking of how to ... how to save these different institutions that we're concerned about, maybe before we're able to come to the solution on this problem we're already involved in how to preserve state government, I think it's time we stopped having this defensive attitude and go on the attack ourselves and say government hasn't been so bad in Nebraska, in fact it's been pretty good. In fact the expenditure level, state and local government taken together, since 1970 has not changed; it has not been an additional burden on the people. The low income have a problem. Fixed income have a problem with property taxes. The farmers have a problem with property taxes. But this whole thing is getting out of hand. We have good government in Nebraska.
PRESIDENT ROBAK: Time.
SENATOR BEUTLER: We have good schools.
PRESIDENT ROBAK: Thank you, Senator Beutler. Senator Chambers, followed by Senators Warner, Wehrbein, Crosby, Kristensen, Bromm, Robinson, Bernard-Stevens, and Schimek.
SENATOR CHAMBERS: Madam President, members of the Legislature, I'm opposed to Senator Beutler's amendment. I'm opposed to increases in the sales tax for any purposes. We all know that it is a regressive tax, but in this particular incident ... instance it's being set aside for a specific purpose. The approach that's being taken by the Legislature this session, and Senator Beutler touched on it, is because this is the year of politics, which is the term that I use over and over. And we had these petitions, copies of them, handed around by Senator Abboud'. and for many of the senators that's the only reason we're doing what we're doing this year. I don't want to see any of these bills pass. If the people think that there can be better government by way of their circulating and adopting
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changes to the constitution by way of petition, they ought to be given what they want for a change. Let them have what they want. Sometimes a crisis has to be reached and passed. That's what old Abraham Lincoln said. He and I are about the same age now, so I feel that I can kind of make that comment. But in reality the Legislature is always jumping and scrambling every time somebody says that they're going to circulate a petition. Let them circulate it, let them put a restriction on what the state can spend, and then we will live under that restriction, and they will come to understand the significance and meaning of it. If we forever treat the public like juveniles, always try to protect them from themselves, then the Legislature is never going to be able to function as a policymaking body in the way that it should. I don't personally think these petitions are going to go anywhere, but what if they do? Suppose the Legislature does all the things that we have been doing, passing laws that we don't feel adequately address the problem, but hoping that it's enough to forestall these petitions, and the petitions pass anyway, they get enough signatures. They put the propositions on the ballot and the people vote for them. All of this time that has been spent by the Legislature is wasted. I think it's wasted anyway. These bills are just smoke screens; they're designed to give the impression and appearance that something is being done when it's not. Too many times when education is discussed, and Senator Beutler's amendment would dedicate some money for that purpose, what is envisioned by most people is increased salaries for teachers, increased benefits, maybe you'll talk eventually about more schools, more items and objects, but very little is said about what the children actually learn in the schools. I think instead of talking about a competency test statewide for the students, if you want to really hear a cry from the banshees, we should talk about a competency test for teachers statewide. And I wouldn't be unreasonable. I would do the same thing that one of the southern states did. I would say that the level of competency involved in this test is the eighth grade level and, even saying that the test is at eighth grade level, we would have an outcry.. I got a circular, and I'm sure all the rest of you did, from the teachers union, the NSEA or OS ... maybe it's the Omaha branch. And they misspelled canvass. They were talking about canvassing something or other in the sense of examining or totaling the number of votes, and they spelled it one S, that relates to this type of fabric. So if those whose union represents the teachers will put out a publication, I'm sure intended primarily for
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teachers,...
PRESIDENT ROBAK: One minute.
SENATOR CHAMBERS: ... and they cannot spell, that gives us an idea, Senator Jensen, about what is happening in the classroom, that it's not up to what it ought to be. I'm going to put my light on again because I want to do, after having made these comments, if the question is not called, what Senator Beutler and Senator Warner did, and what I like to do, that's philosophize. But in honor of everybody else who is in the Chamber, I want to say that I hope you listen very carefully to the discussion and know that what we're talking about is raising the sales tax by a half cent. And I hope we defeat that.
PRESIDENT ROBAK: Thank you, Senator Chambers. Senator Warner.
SENATOR WARNER: Madam President, members of the Legislature, I might comment on two or three things. Reference has been made to one of the letters I guess Senator Beutler had passed out, and the reference, of course, talks about all taxes, apparently from the Lincoln Chamber. It would be my interpretation of this letter that it represents nothing different than what I was talking about earlier, and that is that there is a perception, real or perceived, need to become more cost efficient. The government is costing too much, and they're expressing this with limitations, with cautions. I also don't believe that you would find the state chamber in support of a program that would be deleterious to the educational system. They know, as well as all the rest of us know, that you got to have, quality of education. But what they are expecting, not just out of schools, now what they are expecting out of local governments and state government is that we're going to be more careful in controlling the costs and that's all it is. Before we start to look at more revenue, we have satisfied, to the extent that we can with the help of people across the state, that. we have satisfied that the most effective, efficient changes that can be done have in fact been met. That's the issue.. In fact to assume that that can be accomplished in two years is probably pretty optimistic. But I also believe if it was four years it would still be the last two years that most of it would happen.. So it's going to be a concentrated effort, and it can be. if the various associations, certainly the Association of County Officials have indicated a very ... a very real willingness to go
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about and attempt to look at these things and implement, and I would imagine the other associations, if this package of ... group of bills is enacted, perhaps will join with that group. Or if you read, for example, the position that was taken by the natural resource districts at their convention, as a matter of policy, it was consistent with the same thing. They wanted to look for ways to become more cost effective and efficient, and they were willing to look at many alternatives. That's all we're asking people to do, it's not a big deal. Just sit down and take some time, in an organized fashion. The structure is here for several entities to get together, what can we do together, what can we do cooperatively, what can we do to be more cost. effective, what can we do to be more cost efficient? That's what we're talking about. And I can't imagine the public is not in full support of that. In fact that's what I hear all the time, just in casual conversations, except this is going to try and structure it. And once that is explored and accomplished to the extent-it can then obviously would be the time, if necessary, to look at alternative revenues. But I don't believe that is going to be a successful route if we start at that position. And if we start at that position nothing is going to happen of just increasing revenue, and the situation will continue to fester and fester until it becomes ...
PRESIDENT ROBAK: One minute.
SENATOR WARNER: ...irreversible in terms of harm that might be done.
PRESIDENT ROBAK: Thank you, Senator. Senator Wehrbein.
SENATOR WEHRBEIN: Yes, Madam Speaker, members. First of all, I rise in opposition to the sales tax. Frankly speaking to this issue, I think it's not necessary at this time, we may well get to that in time. But at this point I think, in spite of what some say, and I know it's difficult for me to say, I think we need to keep the pressure on. I passed out yesterday, thought it was going to be appropriate for the time on this particular bill, but it's an article in the World-Herald, last Thursday. Has probably gotten buried in the papers on your desk. But the title is "Kansas City Spent on Schools But Failed". And I won't. go into it, I have other copies, if you'd like to see it. But in essence, and I know everything in it has ... there's some spin on it, perhaps, that needs to be looked at with a grain of salt.
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But in essence, you know the Kansas City schools were taken over several years ago, I think more than ten, by the court system because of inadequacies in the system. Since that time they've spent $1,600,000,000--our one-year budget in Nebraska from General Fund, almost. And apparently they have not solved many of, their problems. And I'll let you read the article to see where they spent their money. But that's really the point of what I'm thinking. I feel we have to keep the pressure on. I'm careful in what I'm going to say because I don't want to necessarily make a general statement and blanket everyone, because there certainly are some good, strong districts out there doing whatever they have to do and perhaps more. But on the other hand, I have to say that I'm also disappointed in the attitude in many of the schools, as expressed in letters and otherwise, that I have received and the attitude toward this particular thing. Seems to me in an entrepreneurial spirit, and that's the best description that I can come up with, without quantifying it or qualifying it ... quantifying it anymore, is the fact that instead of saying, like I think many in business were,,that there's an obstacle...yes, we're going to cooperate; yes, we're going to do what we can. Give us a couple years to see what we can do.. We guarantee you that we will have better students and better teachers and they will come out with higher test scores in the next few years. Regardless of what you throw at us, we are going to go around it, we are going to go under it, we are going to go over it. Whatever the obstacle is we in the school system are going to do a better job and, no matter what happens, we are going to do that. But instead' I've heard many say the sky is falling, the sky is falling, you can't do it, you can't do it, we can't do it, we can't do it. Certainly very few businesses would survive in the climate that we've had in the last 100 years in this country, let alone the last ten, or even right now, with the attitude... if they didn't have the right attitude, they failed. So I think this is just one area that we need to apply some common sense and let those districts that are already perfect, then we'll recognize that and take care of it. But there are some that obviously have some ways to go. And as I look back on it, too, I remember good teachers, and I remember not so good teachers. Perhaps that's a polite word, but certainly some teachers are more effective than others, whether it's at the college level, the high school level, or the elementary level. *And I think we're going to have to start approaching that ... ideas that way and recognize that and say that some are more effective. And some perhaps .... I'm
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not an expert in education so I'm going to be very careful, but it seems to me some are more effective teachers in certain numbers of students than others. And I think we're going to have to start looking at areas like that. We're going to have to start looking at areas of supervis... of curriculums and some other things that I don't know anything about, but I know there are professionals that do. And certainly we all know individual school districts are better than others. What makes them that? I know there are people that can identify those things. So I simply think at this time throwing more money at the situation and say we're going to bail you out once again is not the answer at this time. I fully believe we'll be back here in a year or two...
PRESIDENT ROBAK: One minute.
SENATOR WEHRBEIN: ... and try to provide some solutions, although at this point I don't know exactly what there will be, especially if the state itself is going to be under a lid or a cap in addition to all the other things that we're going to have to do. But certainly I think it has to start with an improved attitude, a can-do attitude that we are going to' improve education in Nebraska, that kids are going to be first, and we're going to have a system that's more efficient; and start with that premise, rather then say, woe is me, we're going to have to have more money, and more time, and more effort to ever solve our problem. I just think we're starting on the wrong end of our attitude.
PRESIDENT ROBAK: Thank you, Senator. Senator Crosby.
SENATOR CROSBY: Thank you, Madam President. And, yes, I did read the article yesterday from the Kansas City... I don't know what newspaper, but about the Kansas City school system. And that certainly was an eye-opener on the... to all of us, and I think a lot of us knew it, but it was a really good article that proves that just throwing money at the school system doesn't make it a good school system. And I agree on that entirely. I'm not going to vote for the half cent sales tax. What I hope I made clear is that I'm glad Chris had the courage to bring the amendment so we could talk about it, because I think in two years or more we are going to have to face the fact that, not just for schools, but other ... other needs and services, we may have to... we may have to face a raise in sales tax because of
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fewer federal funds and services ... people who need services. A lot of them aren't going to go away just because we don't have the money to take care of their needs, they aren't going to go away, they're going to be there. So the counties, or the state, or the city, someone is going to have to come up with that money. But the other thing I just wanted to say two, quick more things. The other thing about 1114 and these is the reason I think a lot of the school districts feel threatened is they feel that they're going to give up local control, that the state is going to mandate the lids, and they're going to have to ... eventually the state's going to tell them what to teach and so on. Well, we do some of that now. But I do think we have to be careful of that. I will agree with them on that, that I think we have* to be careful. And I don't know if the money that we're going to... if property... if property taxes go down, if property taxes go down I don't know how they're going to make up the difference in what they see, the money that they think they need to have. And people who complain about property taxes, once more I remind everybody who might be listening, the state of Nebraska does not levy a property tax, we do not levy taxes on your real estate, that is all local. And the reason I bring that up is 'cause I do have a letter, I'm going to give the other side of it, from a constituent. She wrote a really good letter I think. She moved to Lincoln not too long ago from another state. She moved to Nebraska. And where she lived before she felt like she had all the services and so on that we give, but at one-third of the taxes. So she doesn't understand why it is that the schools, and she talked to a younger person who has somebody in the Lincoln Public Schools, that the schools supply pencils, paper, books and so on for no fees. That's come over the years, I don't know when that started. When 1 was a kid we took everything to school with us. We brought our paper and pencils and so on, and we-did have a book rental, even in the public schools you had to pay a book rental. So there are, you see there are always ways that a budget can be looked at and at least try to come up with some way for the budget to be used in a more efficient way. But I would guess that a lot of parents who may be complaining right now about their property taxes being too high would start complaining if they had to buy all those things and send them along with their children to school. So it's six of one and half a dozen of the other. And she just doesn't understand that ... understand where it all came from. I'm going to try to find some information for her because she does raise some questions that I haven't had raised before.
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But her letter is not unique. There are so many people who feel threatened, that they've worked all their lives and they've got their home and their taxes are maybe...she says her taxes are $150 a month, so you can multiply as quickly as I can, you see how much she's paying, it's probably not an enormous home or anything. But ...
PRESIDENT ROBAK: One minute.
SENATOR CROSBY: ... $100 of that per month goes to the school system, and that's the way it is. I don't know how it is in other school districts, but 60, 65 percent of our tax money that we pay on our real estate taxes goes to the school system. And we are proud of our schools in Lincoln. We do have good schools. My children grew up in a smaller town, went to a school system that had very little money, and they all learned to read, write, do math for a lot less money than it costs now, but again that was 30 years ago, that's a different age. And we have to look at what the schools are up against and what the federal government has mandated to the states, and what the states have mandated to the schools to do. So I'm going to support 1114. I have terrible reservations about 299; 299, 1 think, is worse than 1114 on the impact. And I won't support the sales tax, I wish we could. But the other...
PRESIDENT ROBAK: Time.
SENATOR CROSBY: ... the other half of the sales tax is we have to be concerned about... so we send it back to the schools. But who decides who gets how much of it? Thank you.
PRESIDENT ROBAK: Thank you, Senator Crosby. Senator Kristensen.
SENATOR KRISTENSEN: Thank you, Madam President, members of the Legislature. I rise to oppose the Beutler amendment for the following reasons. As you begin to talk to people about property taxation and what the problems are, and the coffee shop conclusion usually is for those who feel the property tax is a crisis just raise those sales and income taxes, and our property taxes are going to go down. I shake my head, I say, well, it isn't quite that simple. Well, sure it is, they say; all you got to do is raise that sales tax; everybody likes to pay it anyway, and they pay it a little bit; it's one of those taxes
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it's easy to do. And if you've got a little time that day you say, well, no, hold it, here's what really happens. -If you don't have time, you go, yeah, that sounds like a pretty good policy, and off you go. works fine in the coffee shop; that doesn't ... that doesn't work fine when you're beginning to do policy, and here's why. What guarantee do you have that that sales tax increase that everyone is going to pay is going to directly reduce your property tax? None, you do not. People's anticipation, if you're going to raise that sales tax or the income tax, are that there's some guarantee of a direct relationship of reduction of property tax. We're not to that point yet. That day is yet to come. It will come, but we're not there. yet. And. besides, you're only going to get one chance, in my opinion, to make a substantial shift in taxes, if it's going to occur, and you're going to do that after some of the restructuring has occurred, after they've had a chance to examine themselves and not before. If you do the change now, if you do the half cent sales tax increase you're done. This is the last opportunity I think you'll ever have to make any shift from sales and income taxes to property taxes. It won't do what we want it to do, it won't be a guarantee, and all you do is put more money into that system without getting into some of the efficiencies, and without taking into account some of the other items that this package offers. And so I know that that's a popular coffee shop topic, it's certainly one that ... it seems so simple, and yet it's so very, very hard, and there's so much ,more to it. And besides the half cent will not make a substantial ... at all a substantial change in the property tax in the state of Nebraska if you're only going to raise $77 million and you're talking about well over a billion and a quarter of property taxes in this state. It just-will not have the impact, and then you've raised the taxes. And actually their property taxes remain the same, their sales tax has gone up, and we've accomplished nothing. So I would rise to oppose that. The other frustration I have as I read one of the letters that I generally ignore most of the letters I get from the lobby, but this one goes ... and I don't think it can go without passing. One of the groups who strongly supports the petition drive says, my goodness, this package doesn't provide ... it caps property tax for schools, but it doesn't address the issue of replacement revenues, that's left for another day; we believe that we must not wait for another day. What does their petition do? What does that petition do? It says, we don't have the answer, let the Legislature do it. Come on. We're getting close to the
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end. It's time to start to make the decision to do what we need to do. And I think that the issue probably needs an airing where people can understand that it isn't so simple just to raise the half cent sales tax and solve the property tax problems, it's much more complicated than that. And I hope that you defeat the amendment. Thank you.
PRESIDENT ROBAK: Thank you, Senator Kristensen. Senator Bromm.
SENATOR BROMM: Thank you, Madam President. Fellow senators, I have a question, and if this has already been stated I apologize. Senator Beutler, if he would yield to a question . Senator Beutler, is the intent of your amendment that the additional sales tax money will be distributed as it is collected on an annual basis through the Equalization Fund, or is it being... is it being held till '99 for replacement of revenue, or what ... how would that work from a functional standpoint?
PRESIDENT ROBAK: Senator Beutler.
SENATOR BEUTLER: Senator, the tax does not go into effect until January 1st of '99, so it goes ...
SENATOR BROMM: Yeah, that's when...
SENATOR BEUTLER: So it goes into effect the same time that the levy cap goes into effect.
SENATOR BROMM: Okay.
SENATOR BEUTLER: So that the very real reduction in property taxes, which is forced by the levy cap, is responded to by a very modest response, a very partial response in terms of replacement revenues that would start to be generated at that time.
SENATOR BROMM: So the revenue would be available for distribution roughly... start to be available later '99 ...
SENATOR BEUTLER: Yeah, later in '99.
SENATOR BROMM: Okay, thank you. I didn't understand ... didn't understand that. Here's...here's, I guess, a question and a
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problem that I have in trying to decide how to deal with this, I have a very... a very real feeling that we do need to do some serious self-examination and restructuring of government in Nebraska, not picking on any one particular phase of government. But it comes back, to the fact that we do have a rather small population, we do have a rather extensive array of governmental agencies and services for the size of state we are. And not picking on local government necessarily anymore than state, if we're going to get this thing turned around we have to look at all facets of government in a more self-examining way than we have to date. With that objective in mind, the next two years, I think, are essential for looking at what we need to change, and for looking at how we're going to replace this revenue. I'm concerned.... I support replacing a good share of the revenue, I know we're going to have to. And I will probably support doing it in the area of sales tax, in one fashion or another, whether it be broadening the base, or raising the rate, or some combination thereof. If we do this, a half cent raise on the present base, and we raise 70 or 80 million dollars, there are going to be many who will feel that we have done all we're going to have to do, or all that we are going to do, and I don't think that's realistic. I don't think we can get down to where we only have to replace 70 or 80 million dollars. So if that's the case and this doesn't go into effect until 1999, and also taking Senator Warner and the Revenue Committee at their word, which has certainly been valid to this point, I believe that a more significant amount of revenue will need to be generated and that a more in-depth look at how we generate that revenue....
PRESIDENT ROBAK: One minute.
SENATOR BROMM: ... as well as how it's distributed needs to be done over the next ... over the interim and during the next year. And as a practical matter I don't think there's anybody on this floor that thinks the Governor will sign the bill with the sales tax increase. I mean he said he wouldn't; he said it many, many times. So I don't know why we would think any differently. Yes, if we put him in the position of vetoing it, we've done something, but have we done something for our schools, our towns, our villages by doing it in that fashion? I don't think SO. And if the package fails then I don't think I'm going to be able to go home and say that I really did my best to get something done down here on property tax. So, for those reasons and others that I probably won't have time to go into just at
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this moment, I ...
PRESIDENT ROBAK: Time.
SENATOR BROMM: ...I do have to oppose the Beutler amendment. Thank you.
PRESIDENT ROBAK: Thank you, Senator Bromm. Senator Bernard-Stevens.
SENATOR BERNARD-STEVENS: Thank you, Madam President, members of the body. Senator Bromm, just... I'm not going to ask a question, but to pick up on some of the comments that you ... that you have just stated, I think you need to go to the next step, and that is even. if we did not attach Senator Beutler's amendment for the half cent sales tax, or tax on services, or whatever it be, even if we didn't attach it to this bill, Senator Bromm, and we just had it on its own, and we passed the bill saying this is what we're going to do, raise these... shift taxes over to this area in order to help relieve the burden of the loss of services to schools and other political subdivisions, the bill would still be vetoed. I mean, that's the point, the bill would still be vetoed, and that's the point that is why I'm not supporting this bill, I'm not supporting 299. Because if you look at our political leadership on both sides of ... both political parties, it's not a shot at any one particular party at all, is that their position is, for the most part, we don't want tax shifts. And that will be the same if you're in the elections this year, and that will be the same if you're in the elections two years from now. And I disagree with Senator Warner on the state chamber. I don't think... I don't read their view his way at all. I take them at what they say. I think their intent is consistent with what they have done over the last few years. And their consistent viewpoint over the last few years has been, for the tax base to grow, we need to have more jobs and employment, we need to do that through a combination of tax breaks. We also need to do it through a combination of lowering taxes to entice businesses to come. And I think their viewpoint will be the same two years from now, as it is now, and that is if you raise taxes, when you compare our tax rate to those of the other states it will hurt businesses, businesses may leave, they'll go to other states, and consequently we'll be economically worse off. And they'll still be against the tax increase, period. But then I had some
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questions that the chamber needs to think about as well. Because if we can't go to a tax shift at some point, two years down the line, or even this time, and I intend to support the Beutler amendment, if we can't go to a tax shift, then we do it by cutting spending at this level. I wonder whether they're going to support that? One of the first amendments I think we should do in cutting the spending would certainly be on a lot of the job training on DED, the monies that we've given. We'll have to go to where the money is. If you're going to find 100 to 150 million dollars you got to go to where the money is. The money is in social programs, University of Nebraska. Let's go ahead and cut then higher education. And I suspect the argument would be, gee, we can't do that because that's the life blood, for the most part, of a state; we need higher education and strong research in order to attract businesses. So, members of the Legislature, the debate today is not going to be any different two years from now. And the argument that some senators have put forward, that you have to let the pain develop before you have any cure available,. otherwise it won't be effective, is nonsense, because Senator Beutler's bill does not ... the tax would not even begin until two years later when the tax caps are put on. In other words, school districts would have no choice but to make the cuts because they don't know, they're not going to receive any dollars until the next time around. They have to make the serious decisions, they would have to make them. This would not blunt that whatsoever.
PRESIDENT ROBAK: One minute.
SENATOR BERNARD-STEVENS: Senator Beutler, I think, had an interesting idea, and again counter to a couple things Senator Bromm stated, and that is if we're willing to say that two years from now we'll try to get 120, 200 million dollars, this time at least half of us can vote to do about half of it now, and the other half, when they're not up for reelection, if they want to, can vote for the other half. But if we're not even willing to do half of it or less than half this time around, when it won't even take effect until two years later, are we going to have any real desire on the body's part to increase, in two years from now, a tax base? And I don't believe there will be. I think Senator Abboud's (sic) idea will ...
PRESIDENT ROBAK: Time.
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SENATOR BERNARD-STEVENS: .-..will not necessarily pass today, but I'm glad he introduced it. I ... Senator Beutler, excuse me, Senator Beutler. Senator Beutler's will not... amendment will not pass today, but I certainly intend to support it.
PRESIDENT ROBAK: Thank you, Senator. Senator Schimek.
SENATOR SCHIMEK: Yes, Madam President, members of the body. I don't intend to take long, I just wanted to finish the remarks that I started before. And, you know, I was talking about LB 299 just briefly because I think it is ... it is not as tough as LB 1144, although in the second year it won't be easy. But I think that LB 1144 is too tough. Now I would like to share with you just some facts and figures before I go ahead to talk about Senator Beutler's proposal here, and go back to the idea of the petitions that are in the process of being circulated and maybe filed and... or that have been filed and that may qualify and that people may be voting on. I want to just refresh your memories and go back to the years from 1960 through 1964, and during that period of time there were 63 petitions filed in Nebraska. And some of those were referendums, but most of them were constitutional amendments, almost all of them were. Of those 63, only 19 actually qualified for the ballot, and of those 19 only 7 actually passed. Now, to me that says that the electorate is fairly discriminating; that the electorate usually goes to the polls informed and makes wise decisions. Now we may not always agree with them, but they don't just pass anything that gets on the ballot. And I guess ... I guess I had to point that out because I don't think that we ought to be influenced by what's going on out there in the petitions. I do think people want property tax relief, I don't disagree with that. The survey I sent out recently, that's the number one priority. But what kind of relief do they want and at what expense? I think that's the question. Senator Chambers, I agree with you, sales tax isn't the best replacement. And if I truly thought this had an opportunity of getting adopted on this bill I probably would have to say, well, let's amend that and make it income tax. But I'm being realistic here. I think there needs to be a replacement is all I'm trying to say when I got up to talk about Senator Beutler's proposal here. When I sent out that survey to 11,000 people in my district and asked them what kind of services that they would be willing to be cut, they were willing to see cut if their property taxes were reduced, I got a handful of responses. They don't have any clue as to what services we
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could cut. It's all generalities. And I mean it's not that...that I think they're ill-informed, I think they're very well informed. But it's hard to cut those services when you get right down to it. I just would encourage you to vote for this particular measure if you* think that there needs to be some replacement revenue. And, with that, I would relinquish the rest of my time.
SPEAKER WITHEM PRESIDING
SPEAKER WITHEM: Senator Jensen.
SENATOR JENSEN: Thank you, Mr. Speaker, members of the body. I did pass out a few minutes ago a paper actually that I passed out last year and, really, things haven't changed. Nebraska is one of the high, highest tax states in the nation. And just to refresh your memory, we are 13th from the highest in total tax. Now this was done by the... actually by Money Magazine, in 1995. But if you. were a family of four with an income of $80,000, your income tax, sales ... property... sales tax, property tax and gasoline tax, and by the way we've raised, as of April 1st, our gasoline tax another 2 cents, but your actual taxes in Nebraska would be $8,600. Turn the paper over. And if you made the same $80,000 in another state it would tell you what your ... what the difference would be in take-home pay, the dollars in your pocket would be, in Iowa $890, all the way down to Wyoming, where it would be $5,500 more spending dollars in your pocket that you'd take home. We really are about in the middle, generally, in taxes ... in sales taxes among our... in the nation. However, we do have a couple states that are lower than we are to our south, and of course to our north, in South Dakota, they have no sales tax at all. But we cannot raise our sales tax anymore. We talk about border drain, I can imagine in South Sioux City those people, when they go to buy groceries, they would just cross the river into Sioux City, Iowa, and buy those. Same thing in Nebraska if we would raise our ... or in Omaha if we were to raise taxes we would see more people go over to Council Bluffs to buy that, and the same thing in all of our border towns where you would see people just cross the borders to buy their goods. I really thought that this whole session, and I've been very pro-ad of what we've done up to this time, where we've really taken a look at all of our spending and hopefully we've tried to put some limits, some levy limits on the total spending. Spending is what creates taxes. And so if we can hold down taxes, we can
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hopefully hold down... if we can hold down spending, we can hold down our taxes. But here just about the time where I think we're just about there, that we've made great progress, we're slowly turning, the faucet off on spending, then we reach over here and we turn the faucet off ... or turn the faucet on, on increasing sales tax to create more revenue so that we can spend more money again. It's just a vicious cycle and it's time to stop, take a look, control our spending, bring our taxes into line, then I think we will see true economic growth in Nebraska, and we'll have a broadened tax base. Then we can, hopefully, reduce taxes, have... clear across the board, and that's where we need to be clear across the board. We don't need to shift taxes from property taxes to sales tax or income tax. Let's hold the line, let's take a look at it, let's see if we can live with less. Certainly we have businesses all across Nebraska that have had to do that, that have had to tighten their belts and to create some efficiencies all businesses had. It's time for government to do the same thing. What are we doing with insurance costs? We've done the same thing there with managed care, and I think that we have, for the first time now, seen a decrease in our medical Costs ...
SPEAKER WITHEM: One minute.
SENATOR JENSEN: ... and in our insurance. Now is not the time to look for more ways to tax, now is the time to look for ways to cut taxes, to cut spending and then grow Nebraska. Thank you for your time.
SPEAKER WITHEM: Senator Beutler.
SENATOR BEUTLER: Senator Withem, members of the Legislature, it's interesting how we want to argue things both ways. I mean Senator Kristensen says at one time, well, this isn't all that much money, we're going to have to do a lot more, so there's no use doing this because it's not that much money. And yet at the same time the proponents are turning around and saying, well, if you do this there's no incentive for efficiency. Well, if it's not very much money, why isn't the huge incentive for efficiency still there? I mean they want to argue it both ways. I hone that's clear to people. And I hope it's also clear to people that we're not talking about one or the other, a search for efficiency versus putting in some replacement revenues. All this is talking about is a minimal safety net. We're talking
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about tax I reductions that unless...if we put this package into place we re talking about property tax reductions of $250 million. Those are real. Those are substantial. Not every homeowner is going to realize a proportionate share of the reduction, but overall $250 million of reduction, 20 percent of property taxes will disappear. This replacement tax that we're talking about today is only $70 million, somewhere between a third and a fourth of replacement revenue if you just wanted to keep taxes at the current level. Even if you adopt this amendment you're reducing overall taxes significantly, and you're not going to take away the incentive for efficiency because there's still a huge amount of money out there that will be of concern to the school districts. And it strikes me as somewhat ironic that we talk about the drive for efficiency and how we're really going to get efficiency, and when I had the little amendment on school consolidation I couldn't even get you to tell them they had to have a hearing and a cost estimate on consolidation. Couldn't even get you to tell them to go through a little process to be sure they had analyzed the situation for consolidation. I mean if we're not willing to do that much, and consolidation is the big efficiency in the school area, what makes you think that next year or the year after you're going to be willing to do the one big thing that needs to be done in terms of efficiency? I mean you don't really believe that without consolidation you're going to get any significant efficiency, do you? I mean do you believe the school administration out there, if we do it right, is going to result in a 20, 30 percent reduction in the school budget? That's patently ridiculous. And the politics of it, if we put this in here the Governor will veto it. Maybe he will; maybe he won't. If he does, we can override the veto. Why wouldn't you override the veto if you believe in it? Why would you back off just because one other individual has a different opinion than you do? I never have quite understood that. But in any event, if you think that he will veto it this time and we will be forced to look at an override, if he will veto a $70 million measure, and you say this is too small, we need to do it right in a year or two, what we really need is $150 million measure, what's the next Governor going to do with that? You think it's going to be easier for. the next Governor to deal with $150 million? I suggest to you that there is no doubt but that there will be a gubernatorial veto of that, which you will have to override.
SPEAKER WITHEM: One minute.
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SENATOR BEUTLER: The discussion today is a harbinger of things to come. The increase in the sales tax is far and away the most popular choice of Nebraskans in terms of replacement revenues. And yet already on the one hand the chamber of commerce and business groups are going to fight that. On the other hand the same thing is going to be fought by Senator Chambers and Senator Schimek and others who do not feel that a sales tax is an appropriately scaled type of taxation, so it's attack from the right, it's attack from the left. There are-going to have to be negotiations. I'm just afraid that in the end you will never be able to do the job in one fell swoop. And perhaps that ... therein lies the whole difference in everything that we're doing here. One person's judgment versus another as ...
SPEAKER WITHEM: Time. Senator Chambers.
SENATOR CHAMBERS: (Laughter) That was the would be ventriloquist, Mr. Speaker, and not me.
SPEAKER WITHEM: I wasn't paying any attention to you anyway, Senator, so....
SENATOR CHAMBERS: Thank you. And that goes to the ventriloquist. (Laughter) I have something here with Jensen, number 20, in the top, right-hand corner, speaking of taxes, and it talks about a family of four earning roughly, as Senator Jensen said, $80,000. Senator Jensen, the types of family this is based on, this family of 'four, it's the bread winner, which would be you, a dog, cat, and a canary. That there. family of four making $80,000, this doesn't really apply in Nebraska. But let me say something or ask a question. Senator Beutler, which do you think would bring more money.... ? Oh, I don't... oh, Senator Warner, I'll ask you. Which would bring more money, and just a rough estimate, and if you can't tell me that's all right, removing all sales tax exemptions, with the exception of food, or raising the sales tax by a half percent?
SENATOR WARNER: Removing all exemptions.
SENATOR CHAMBERS: I'm asking Senator Warner.
SPEAKER WITHEM: Senator Warner, would you respond?
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SENATOR WARNER: Yes, removing all exemptions.
SENATOR CHAMBERS: Thank you. And I don't hear anybody, even those areas that say raise the sales tax, get rid of property tax, saying get rid of all exemptions. You know why? Because they don't want to pay property tax and they don't want to pay sales tax because they're getting exemptions, too. So again it's not quite as simple as it might sound. The sales tax is something like a piece of Swiss cheese--it's cut through, it's shot through with all of these holes and openings. Senator Beutler almost made me laugh, as the little boy did, or girl, who saw Santa Claus, I laughed when I saw him, in spite of myself. He said, what if the Governor vetoes it, all we have to do is override it. Where is that ... where is that young scalawag, Senator Beutler with the nerve to say that? (Laugh) He was here yesterday. He saw a display of the courage of these senators. We took a vote, and before the bulbs on the vote board got cool, where we voted to do something, Senator ... what's his name up there? Senator Withem stood up and said, undo what you did. The bulbs on the voting board hadn't even gotten cold yet. And you know what these courageous people that Senator Beutler says will stand up to the Governor did? What would happen if I took a Teflon skillet, maybe they call it a frying pan, a Teflon griddle and poured 49 grease-covered soybeans on it and I tilted it upright? Would those soybeans, grease-covered, stick to a Teflon skillet? No. And these senators fell away from that vote quicker than those soybeans would fall off that griddle. Senator Beutler thinks they'll cast a vote and stick in the face of a veto? Those soybeans covered with grease will stick to a Teflon skillet sooner. Now here's what I want to ask, because we know that we could raise more money by removing sales tax exemptions. I want to ask Senator Jensen... oh, Senator Jensen... Senator Jensen, I see a lefty that you're talking to. But, Senator Wesely, I'd like to ask the "righty" to whom you're talking, which is Senator Jensen. I like to see the left and the right working together, but I don't think the left and the right know what each other is doing, 'cause you're both smiling, so it's obvious you're not communicating. (Laughter) Senator Jensen, you had mentioned something about just when it seems we're about to do something then it kind of. falls apart and we don't do it. Was that roughly what you said?
SENATOR JENSEN: Yes.
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SENATOR CHAMBERS: And you were speaking with reference to (interrupted) ...
SPEAKER WITHEM: One minute.
SENATOR CHAMBERS: ...looking at spending as well as everything else. Thank you, that's what I thought. I have just enough time to mention this old guy from Greek mythology named, I-think it was Sisyphus, and he was supposed to push this rock up a hill. And he's almost get to the top of the hill and there would be somebody like Senator Jensen up there laughing, and they'd tickle him under the arm with a feather, and when he dropped his arms the boulder would roll back down the hill. Held never quite make it to the top. One reason we don't quite make it to the top is because everybody wants somebody else to pay, and there are those in here who represent those special interest groups which do not want to pay, and usually they* have the most power, and that's why we will never put a tax on Senator Jensen's intangibles. He wants everybody else to pay taxes, but he doesn't want him, his dog, his cat and canary to pay any at all.
SPEAKER WITHEM: Would like to recognize a guest of Senator Fisher's. Under the north balcony we have Bob Meyer from Grand Island. Mr. Meyer, would you stand and be recognized, please. Senator Pirsch.
SENATOR PIRSCH: I'm sorry, members of the body, and thank you, Speaker Withem. I have to put my 2 cents, half cents in right now! I think we should remember what we started out-to do, and everybody has talked about this since I've been in this body, and that is to address the property tax problem. People are paying too much property tax. We're not in proper balance. And LB, 1114, as originally proposed, and I read from the fiscal note the initial levy limits in this bill could reduce property taxes by an estimated 323.9 million, which is a 20 percent reduction statewide. This could be offset by 53.6 million of tax revenues which could be generated under the levy allowance for Interlocal Cooperation Act agreements, yielding a net reduction of 270.3 million dollars, or 17 percent. And this impact may vary between subdivisions. Well, that was the first fiscal note in January of this year. In March it was amended. And now it says the impact on local subdivisions from LB 1114, the initial levy
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limits in this bill could reduce property taxes by an estimated 290.8 million dollars, which is an 18.4 percent reduction statewide. We lost a little in this time between January and March in debating and amending this bill. And this could be offset by 50.8 million dollars of tax revenues which could be generated under the levy allowance for the Interlocal Cooperation Act agreements, remember, that would add to the property tax, yielding a net reduction of 240.1 million dollars, or 15.1 percent, the 15.1 percent being actually the net reduction for property taxes and, again, it would depend. Now, it goes on to say, on this new fiscal note, "It has been the Legislature's intent that all revenue associated the enactment of LB 1059," in 1990, and you all can remember that act that was supposed to reduce property taxes. And at that time we raised sales taxes 25 percent, another whole penny, income tax 17 percent, significant amount, and all of this to go back to the subdivision of education and to relieve the property tax burden of education on our property. Because less property taxes can be deducted, and I think that's important to remember, it says that you can deduct property taxes currently on your income tax, but if you reduce the property tax because 'Less property taxes can be deducted from...
SPEAKER WITHEM: One minute.
SENATOR PIRSCH: ... state income taxes under the provisions of LB 1114, it's estimated that the state General Fund income tax revenues could increase by an estimated $12.94 million, of, which approximately by $1.9 million could be used for school aid, consistent with legislative intent. LB 1114 has more ramifications than I think we even think about when we consider it on this floor, much less the general public. But I definitely know the general public knows the instant impact and ramifications of another half cent of sales tax. And, believe me, they want through that in 1990, and they don't want to go through it again.
SPEAKER WITHEM: Time. Senator Witek. The question has been called. Do I see five hands? I do. Question before the body is, shall debate now cease? All of those in favor vote aye, opposed vote nay. Record.
CLERK: 25 ayes, 0 nays to cease debate, Mr. President.
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SPEAKER WITHEM: Senator Beutler, to close on your amendment.
SENATOR BEUTLER: Senator Withem, members of the Legislature, it's really sad that in such a critical situation as this .there's not more sense of balance about things. And it's really sad that in this particular situation the education lobby, which most of the time, in speaking for the schools and for itself, speaks for the interest of children, are in such confusion and disarray at this particular critical moment. And I think part of the problem is simply the fact that the heroes of education in this particular Legislature are all on the side that have made a tactical decision, which says we are abandoning you temporarily because we must do this in order to save you in the long term. In order to get to the place of low property taxes and quality education, we have to take this enormous risk. And we have to pass through this valley or this canyon where maybe we'll get through and maybe we won't. And all I'm arguing to you today is that certainly the better part of judgment, in my opinion, is not to take this major risk, not to do it all or nothing, but rather to inject a measure of sanity into this chancy situation, just a small measure of sanity, just an indication to all those who have children out there that, yes, we probably will come through in the end, not without requiring some serious sacrifices and some serious efforts towards efficiency, but we're not going to destroy your schools. it's only a partial measure, only a third to a fourth of the revenues that are being reduced, that's all it is. It's not efficiency or taxes. We all know we have to have both replacement revenues and efficiencies. And instead of the burden being borne entirely in two years or one year, let's be reasonable people, let's be thoughtful people, let's take a chunk of it now so that the measures that must be done in the ensuing year or two are not so dramatic, not so huge. I'm just afraid that if we leave it all for then that not even Senator Landis could mediate a desirable solution to the problem. It's going to be too big and the schools are going to be hurt. And I'm not willing to take that chance myself without some measure of good will, without some indication from this Legislature today that we're on a course that looks to a balance and that looks both towards quality education and towards reduced property taxes. I wonder what all of the education people out there will be thinking ...
SPEAKER WITHEM: One minute.
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SENATOR BEUTLER: ...about that petition the NSEA-Farm Bureau petition, when they see what we've done and there's no replacement revenue, and they look at that petition and say, well, at least this guarantees us a quality education. Does that encourage people to sign petitions? Might encourage me. Wouldn't encourage me. I guess I trust us more than that. But they trust us not at all. They might very well ... this might very well increase the number of signatures on that petition and have the very opposite effect of what this whole scenario, this whole game, this whole package is supposed to be about. I hope you see fit to adopt the amendment. Thank you.
SPEAKER WITHEM: Time. The question before the body now then is the adoption of the Beutler amendment. All of those in favor vote aye, all opposed vote nay. You may both have record votes. Have you all voted? Record vote has been requested. Mr. Clerk, record.
CLERK: (Read record vote as found on pages 1845-46 of the Legislative Journal.) 10 ayes, 27 nays on the amendment.
SPEAKER WITHEM: The amendment is not agreed to. Next item.
CLERK: Mr. President, the next amendment is by Senator Janssen, found on page 1806 of the Journal. (AM4295)
SPEAKER WITHEM: Senator Janssen.
SENATOR JANSSEN: Mr. Speaker, members of the bodyl are we on 4295, Mr. Clerk?
CLERK: Yes, sir, we are.
SENATOR JANSSEN: All right. This is an amendment that would address a number of concerns that could arise in the implementation of levy limits established in 1114. School districts, specifically to remove two expenditures from those levy limitations on school districts. Both. the amounts included from the levy limits are things which some school districts have previously committed to provide. One of those is early retirement incentives, payments which the individual school district has already agreed to pay to teachers through an agreement of the teachers and the districts, and the amounts which would be required to be paid by the school district under
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LB 1050, in situations where there is a reorganization of school districts in which a retirement incentive plan would be used to make payments to the teachers who elect to use the fund, since a reduction in force is necessary due to reorganization. Beside the fact that early retirement incentive payments may be required, they are also... it is also a necessary tool to give to the district. They allow a teacher who is ready to stop teaching to take these early retirement benefits, and it would allow the school to hire a younger teacher at a lesser cost to that district. This would allow the school to reduce their costs. This is especially necessary since for many of the school districts salaries are the biggest portion of their budget, as we all know, from 70 to, in some cases,. 90 percent. The next portion of it is the special building funds and sinking funds. These funds can be used for the construction, expansion, or alteration of school buildings. The sinking funds are regulated by the existing statutes and must be, used for the purposes set out in those statutes and only those purposes, and the levy cannot exceed the amount listed in the statute, which I think the limit is 14 cents: acquiring sites for school buildings; purchasing existing buildings; and the erection, alteration of equipment and furnishings in school buildings and additions to those buildings. Yes, that's right. Under Section 79-547.04 the amount levied for this fund cannot exceed 14 cents on each 100 dollars of valuation. The July 19, 1996, date is used since that will be when the other bills which are passed in this section will become effective. The school district could not use the funds for projects which commence after this date. Many districts have already committed a certain amount of these funds, and if the district isn't allowed to continue to contribute to these funds then they could be placed behind on planned improvements or obligations which they have already entered into in these funds. All political subdivisions, it would remove the amount levied for the purpose of paying judgments obtained against a political subdivision. This takes into account a situation which is beyond the control of the political subdivision. A county, city, school district, so forth could, or any political subdivision could find itself placed in a bad position if it is already up against the levy limit and the court passes a judgment which would require the political subdivision to pay immediately. I think these. are some of the things that we are going to find could happen to school districts, already has happened to them. I know that judgments can be worked out through the State Treasurer, in some
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fashion, to be paid. But that is always up to the State Treasure to do that, I mean he can say yes, or he possibly could say no on, a request for.... And I might go over that just a little bit. In general, claims filed against a political subdivision must be allowed by the Tort Claims Act or other designated statute. The act says that the claims are allowed and how the claims are handled. In Section 13-918, the section dealing with payments for the judgments against subdivisions, that is the section it's allowed in. The procedure for paying the funds if the subdivision has insufficient funds, the funds are available to pay the judgment, then the governing body must include sufficient funds in the budget for the next year. But there again if they are up against that lid how are they going to accumulate those funds? And the State Treasurer decides if they should receive the loan by looking at three factors, determining the validity of the judgment, the inability of the subdivision, the period of time which it takes the subdivision to repay the loan. And if the Treasurer determines the loan is proper, then the loan shall be made to the subdivision with a 1.5 percent per annum interest. The State Treasurer determines how much the subdivision must repay each year and the subdivision must budget and levy a sufficient amount to meet this obligation until a loan is repaid. But if that district is up against its levy limit then how can they levy over that to repay those loans" So I ask you to take a good look at 1114 and see what could happen in some of these situations. I believe it is necessary that we pass this amendment for the sake of those districts who find themselves in-the uneasy situation as I have described and are up against ... between a rock and a hard spot, let's call it that. I think this would help them. Matter of fact, I know it would. We set out the early retirement to try to get the initiative going on school reorganization, reduction in forces ... in the policies that are set out. Why, early retirement can be a valuable tool in lowering those parts of the budget which are the highest, which is salary. I know there are arguments that the older teachers are the best teachers, but we all know that when we get to a certain age we sometimes get complacent, and I believe that happens with teachers also. And if they want to retire, the school has the policy in effect to do this. I believe we should give them some help to get that done. So I ask for your advancement of 1114. Thank you, Mr. Speaker.
SPEAKER WITHEM: Thank you, Senator Janssen. I would like to
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make an announcement to the members one more time to remind them of what we said earlier today regarding.... And I think we probably have a time in mind now. When there's a convenient break, a few minutes either side of seven o'clock, we will quit doing what we're doing for a few moments and move to the Select File list and deal with those bills that are clean, don't have amendments. So you ought to be aware of that. There have been three more of those added to the list as it existed this morning. They are LB 952, LR 27CA, and LB 29, and of course LB 29A with that. And there's a list up here at the Clerk's desk. If you want to take a look and see what that list is, you'll be able to see that. With that, Chair would recognize Senator Warner to speak on the Janssen amendment.
SENATOR WARNER: Mr. President, members of the Legislature, I believe I have an amendment up to the amendment, Mr. Clerk.
SPEAKER WITHEM: I'm sorry, Mr. Clerk, I understand you have amendments to this amendment.
CLERK: I do. Senator Warner, your first amendment to Senator Janssen's amendment is one that reads on page (sic) 6, strike "July 1911, insert "April 1". (FA611 is found on page 1846 of the Legislative Journal.)
SENATOR WARNER: Yeah. Mr. President, members of the Legislature, you had the amendment either handed out or in the book. This portion of the amendment deals with the authorization for a Special Building ding Fund or sinking fund established for projects commenced prior to July 19th of '96 for construction and so forth. And this would change the date to April 1. And the reason for doing this, I have a concern that the date there that projects could be commenced that are not planned, merely to get in under the time frame. I assume, Senator Janssen, that you selected July 19th because that would have been 90 days after the session, and from that point would be logical. But, by the same token, if we're looking for some ... perhaps some mergers or some of those kind of programs, I could see where some building project might be commenced under this without adequate planning, merely to perhaps stymie the possibility of some more efficient organization, not necessarily that but could be otherwise as well. But I think if the purl-lose is to recognize some thing that's underway that's planned that is on its way to being completed, why, then perhaps this portion
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of the amendment would be okay. So for that.... But I would ask that the body adopt the April 1st date so it does commence with the (inaudible) projects in anticipation of the date that were not otherwise planned to occur.
SPEAKER WITHEM: Thank you, Senator Warner. We are now debating the Warner amendment to the Janssen amendment. Senator Robinson, did you wish to speak to the Warner amendment?
SENATOR ROBINSON: Mr. President, members of the body, I stand to support the Warner amendment and likewise the amendment submitted by Senator Janssen. So I presume that, if Senator Warner changed that date, that he supports that amendment. Would that be correct, Senator Warner?
SENATOR WARNER: That portion of the...
SENATOR ROBINSON: Right.
SENATOR WARNER: -amendment. I have another amendment that ...
SENATOR ROBINSON: On the lower part?
SENATOR WARNER: No, upper part.
SENATOR ROBINSON: Okay, okay, thank you.
SENATOR CROSBY PRESIDING
SENATOR CROSBY- Thank you, Senator Robinson. I'm sorry, we were changing here. Senator Kristensen.
SENATOR KRISTENSEN: Thank you, Madam President, members of the Legislature. Senator Janssen, I need to make sure I understand, and I want to focus on the center part. There are three parts, for members who are following along, to this amendment. One is that you exclude from those levy limitations sums to be paid by a school district when you have an exchange for voluntary terminations. The second part though deals with Special Building Funds and sinking funds established for projects commenced prior to July 19th of '96. Senator Janssen, I want to make sure I understand what we're doing with the sinking -funds. When you say the words, sinking funds established for projects commenced prior to July 19th, are we talking about a fund that
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has been established prior to July 19th, or are we talking about a project that has got plans, that has really, you know, actual progress has been made on a specific project and you're going to pay for that out of money that's already existing in a sinking fund?
SENATOR CROSBY: Senator Janssen, will you respond?
SENATOR JANSSEN: Yes, Senator Kristensen, the purpose for a sinking fund is usually, or a sinking fund or building fund, they use different words there, all meaning the same thing, but a specific project that they are starting. So I would imagine if that fund was there it is for that project, when that project is completed then they would not be able to start another one. You understand what I mean? if that levy is put in there for the purpose of ADA accessible renovations, an addition onto a classroom, for instance, they have got that established already- And if they have started that, they should be allowed to complete it.
SENATOR KRISTENSEN: If they have a special sinking fund established where there's no specific project, but they're just putting money away for some project they may do in the future, let's say-they want to do an auditorium addition to the school, for example, and they've got the sinking fund established with no real plans, it's just that some day, if we ever get enough money, we'd like to spend it here. Would that be one that would be outside of the limitations?
SENATOR JANSSEN: I don't believe so, Senator Kristensen.
SENATOR KRISTENSEN: Okay.
SENATOR JANSSEN: I believe this would be ... and Senator Warner is trying to get at that with April 1st, it must be started prior to that. I remember three years ago when ... during the second or third special session some funding was taken away from some of the schools that had started projects, and they weren't allowed to complete them, there were funds available for them. We came back the next year and addressed those situations and got them back in again because if you've started this project, or the fund, I believe you should be able to...
SENATOR KRISTENSEN: Right.
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SENATOR JANSSEN: And, you know, you've got ... theoretically, you got two years here to get this accomplished.
SENATOR KRISTENSEN: And the key to that is that the words "commenced prior to July 19th", refers not to the commencing or the creating of the sinking fund, but goes and refers to the projects.
SENATOR JANSSEN: For projects commenced prior to.
SENATOR KRISTENSEN: Right, and that's a real important distinction because between now and whether it's the July 19th date, unless we adopt the Warner amendment, you could have a variety of people that will go out, we'll have a lot of special meetings, we'll get a lot of ...
SENATOR CROSBY: One minute.
SENATOR KRISTENSEN: ... funds created, and people just get that fund created just as a safety valve. That's the reason I'm comfortable with the Warner amendment to stop a series of special meetings and a lot of posting of special notices for special meetings to establish sinking funds between now and the operative date. And you've been very helpful in describing what your intent was with that. And I would, at this point in time, support the Warner amendment, but thank you for your explanation because I think that gives us some direction as well, that we're looking at those people as of today, for all practical purposes, that have a sinking fund, have money in there, have projects on the way that they're going to use that for. This shouldn't be a safety valve to get around the levy limitations by just creating a sinking fund under the guise of having a project some day.
SENATOR JANSSEN: That was not the intent.
SENATOR KRISTENSEN: Okay, thank you very much.
SENATOR JANSSEN: The intent is for those people who already have something started.
SENATOR CROSBY: Time.
SENATOR KRISTENSEN: That's very helpful. Thank you.
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SENATOR CROSBY: Thank you, Senator Kristensen. Before the next speaker, I very quickly like to call the Legislature's attention to the north balcony where Senator Cudaback has some fourth graders and visitors from Pershing Elementary School in Lexington, and. with them are their teachers. (Introduced teachers.) Would you all stand and be welcomed by your Legislature. Mr. Clerk, do you have items for the record?
CLERK:. Madam President, Senator Brashear has amendments to LB 1368 to be printed, and to LB 1264 to be printed. Senator Lynch would like to have a meeting of the Building Maintenance Committee in Room 2022 at four o'clock; Building Maintenance, four o'clock in Room 2022. (Journal also shows explanation of vote by Senator Will regarding LB 1050.) That's all that I had, Madam President. (See pages 1846-47 of the Legislative Journal.)
SENATOR CROSBY: Thank you, Mr. Clerk. Senator Landis.
SENATOR LANDIS: On the Janssen amendment, not on the Warner amendment to the amendment.
SENATOR CROSBY: Oh, thank you. Senator Wickersham. Senator Wickersham. You're waiving. All right. Senator Janssen.
SENATOR JANSSEN: Thank you, Madam President, members of the body. The reason that July 19th was established in this amendment was because that is the effective date that the bills will take effect. I have no problem with the April 1st date in there because most schools have a special fund started already for a project they are working on, so I have no problem with that amendment.
SENATOR CROSBY: Thank you, Senator Janssen. No further speakers. Senator Warner. You waive closing? The question is the adoption of the Warner amendment to the Janssen amendment. All in favor vote aye, opposed no. We're voting on the Warner amendment. Have you all voted? Record, please.
CLERK: 26 ayes, 0 nays, Madam President, on adoption of Senator Warner's amendment.
SENATOR CROSBY: The amendment is adopted. Mr. Clerk.
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CLERK: Senator Warner would move to amend Senator Janssen's amendment. (Read FA612, found on page 1847 of the Legislative Journal.)
SENATOR CROSBY: Senator Warner, on your amendment.
SENATOR WARNER: Madam President, members of the Legislature, this amendment is offered in part perhaps for discussion on this particular portion. What the amendment does, it strikes, if you have the amendment before you, it strikes the words beginning in line 2 "amounts levied to pay for sums agreed to be paid by a school district to a. certificated employee in exchange for a voluntary termination employment". And the concern rests with... certainly this concept is not a new concept that has been used, but it was always. my impression that in that process usually they were replacing those people with lesser period of time, lower salary. It was always my impression it was done to reduce the cost of operations rather than an increased cost. Now there may be something that I'm not quite clear on. But in order to more clearly understand why that would cause an increase in the budget I'm offering an amendment just to strike that part of the exception for these voluntary terminations of employment. And again the basis for it, and Senator Janssen, I'll be glad to give you the balance of my opening to talk about it, but it seemed to me that these concepts was always in anticipation of reducing the costs of operation rather than an increase. And, with that, Senator Janssen, if you'd like to further talk about it, you may.
SENATOR CROSBY: Thank you, Senator Warner. On the Warner amendment I still have some lights. Senator Landis, did you ... no. Senator Wickersham, on this amendment?
SENATOR WICKERSHAM: Thank you, Madam President. And I want to acknowledge that I worked with Senator Janssen in developing part of the language._ I know that as he spoke in the introduction for this amendment that Senator Janssen made a reference to early retirement benefits. And, Senator, I'm not going to chastise you for making reference to retirement payments. What he's talking about really isn't retirement payments; they're in essence buying out contracts. And when I first saw Senator Janssen's amendment I thought that that was a good idea, that that was legitimately something that we should
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have outside of the lid because it was an encouragement to perform some cost reductions. in the school programs. But I should have given it a couple more minutes of thought and then the light would have come on for me, as I believe it did for Senator Warner that if indeed this effort by a school district to buy the contracts of highly compensated individuals and rehire or replace them with less well compensated individuals was effective, that there ought to be a net savings to the district, and that indeed in that case there would be no need to exceed the limitation. That... if that is the objective then I believe that Senator Janssen's amendment is not needed. And it is that second part of the analysis, it is the realization that the objective of the buy outs is indeed a cost saving, which is the part that may not be so intuitive, as your immediate response to we need to spend money to reduce costs. But if you really have been successful in spending money to reduce costs, you don't need to go outside the lid. And I would support Senator Warner's amendment.
SENATOR CROSBY: Thank you, Senator Wickersham. Senator Warner. He waives off. Senator Janssen.
SENATOR JANSSEN: Thank you, Madam President, members of the body. We all know that there are areas when schools are put on a levy limit, they are going to have to try to find cost-saving measures. This could mean a variety of things that they are going to sacrifice, as well as counties, townships, any other governmental subdivision. I don't know how people are going to' perceive this. It could mean losing a glee club. It could mean losing a teacher for a classroom, extra students in classrooms and so on. And I think by using the early retirement benefit this way it could ease the burden on some of the other things within that school that they are going to have to cut or eliminate in portions of it. We are so used to having the small class sizes, plenty of teachers, you know, to go around. Sure, we all like our activities and so on and so forth. I would imagine these are some of the areas that schools are going to look at to eliminate first, and that is probably where it's going to bite the hardest in smaller communities, especially is when you lose some of the activities the schools have. I'm not advocating that we need those. The education is the first thing. But there are areas in education that I think you're going to see some reductions in, hopefully not eliminations of some of the areas that we do not have to provide but are very
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essential. And I think that if they could use these, about every school has a different type of early retirement, some don't have any, some have none at all. Maybe this would open it up that they would look at this, especially in mergers of schools, which we are advocating. You have to get some of these schools together, that means reduction in force. Who's going to get hit when you have reduction in force? The way most of the policies are is that low man on the totem pole is going to have to go, the more expensive one stays there. So I do see a way that you can keep providing a quality education in most schools by using this type of tool in early retirement. Schools have different policies. One school board... school administrator I talked to the other day said we pay them 20 percent of their salary on a buy out or a retirement, if you want to call it buy or retirement, plus their insurance. So if you figure both ends against the middle there you're still going to save, you're saving some dollars by hiring another teacher. But it may be a small amount, but that small amount could be used to provide maybe an extra teacher to get... so you wouldn't have to have class sizes of 45 or 50 kids. And in some cases it's going to come down to that, folks,...
SENATOR CROSBY: One minute.
SENATOR JANSSEN: ...you're going to have some large class sizes, and that's not good. So I under... and I appreciate Senator Warner's concerns, but I believe I'm going to have to oppose this amendment he has because I think it is very important we sot out ... we allow people to...schools to do this with their early retirement. I believe ... I don't believe we should hold it as a hammer over their head. Thank you.
SENATOR CROSBY: Thank you, Senator Janssen. Senator Robinson.
SENATOR ROBINSON: Madam President, members of the body, I stand to oppose the last part of the Warner amendment. We're putting schools on spending limits. It's interesting that Millard, or excuse me, not Millard, but Ralston has cut a number of teachers. What did the superintendent of schools from Ralston. say? I have to cut the beginning level teachers. They could have probably kept two teachers if they would have had an older teacher that would take early retirement. And if you take that money that's going to be spent on early retirement, if it's not going to be under the lid, I question whether schools will do
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it. They're going to have to use that money, they're going to have to use that money to keep their schools going. I think this is one of the best amendments that we've had because it is going to help the schools get by. And I think everything that Senator Janssen said is true. --se have to give them some tools, and I think this is a small one. And I think we should defeat the last part ... the Warner amendment and retain it in the Janssen amendment. Thank you.
SENATOR CROSBY: Thank you, Senator Robinson. Senator Kristensen.
SENATOR KRISTENSEN: Thank you, Madam President, members of the Legislature. And I don't see Senator Wickersham here. I think what Senator Wickersham was describing goes like this, and that we...when we first looked at this amendment, obviously, thought it had some real attractiveness to it. And Senator Wickersham explains to me, and I'm going to try to put it in my terms because I'm not the retirement guru, I'm sorry, I can't do it. But it goes something like this, that if a school has the opportunity to make some changes in its staff and faculty that it could buy out teachers who are nearer to retirement and pay them some sum. Generally, what happens, and that's where Senator Robinson goes, is that you going to have some expenditure to buy them out early. What the second part of the story is, and I think Senator Wickersham was trying to explain, is that those teachers are going to be replaced by different teachers who have a different salary levy, which will probably be lower. So there will be a savings in the salary that you're going to pay the new staff person a lower salary than the person that took early retirement. And the difference in their salary is what's used to fund the purchase of the early retirement for the other teacher. And I think that's what Senator Wickersham was saying, in fact that they could handle that within the lid because they're going to pay the replacement teacher less than they are the teacher that they bought out early retirement. And I guess that's what I'm struggling with, Senator Janssen, too, is after listening to Senator Wickersham's explanation of should that be within or without of the levy limit. And Senator Robinson referred to this as a spending limitation. I think this is a good opportunity to take and remind people LB 1114 is not a spending limitation bill, it's a limit on levies, in other words, the ability to raise money, not the spending. That's the next bill, and that bill is for the transition period of going
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from what we have today, which I is for everyone but counties we have no levy limitations and we're going to put those in, phase it over a period of time. So I just.... I know Senator Robinson knew that, it was just that it's an easy one to talk. And I've made the mistake, too, quite frankly. senator Robinson, I just wanted to make sure everybody understands this bill is not about expenditure; this bill is entirely about the ability to raise revenue. And, with that, I guess I'm still at this point... there are other things in the amendment that are very good, Senator Janssen, and I want to take my opportunity $cause I don't know if I'll get a chance to talk on them. But the part ... the third part of the Janssen amendment goes towards that's not paid by liability insurance coverage of a political subdivision. And that goes to the Oakland School District case, if I 'remember right. Is that...? Senator Janssen's head is shaking. I can't hear Senator Janssen's head like I could Senator Cudaback's head shake, but I (laughter)...for the record he's saying it's that type of scenario, in other words, where you get sued, you have a large judgment. We've done a couple things to address that situation in the state. one is we've put a political subdivision tort claim cap. In other words, there's only so much the judgment can do. That allowed schools to better handle those insurance premiums. The other case there -was the insurance company went under. And we've made some changes in terms -of the school districts' and the subdivisions' ability. Some have gone for self-insurance; others have found different companies with different rates and different types of reinsurance and coverages. So we've lessened that exposure. There's still probably going to be some of that exposure. And I would assume, Senator Janssen,_
SENATOR BERNARD-STEVENS PRESIDING
SENATOR BERNARD-STEVENS: One minute.
SENATOR KRISTENSEN: ... that this would include their deductible that they'd pay as a result of that judgment because some of them are going to have a deductible. Those are certainly unplanned. I don't know that there's any major exposures in there. But to the extent that that's outside of the levy limit at least I know for sure I'm supporting that part because I think that's a good one. I'm comfortable with the second part now that we've got there with regards to the sinking funds. The
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first part I don't know where we're headed with that yet, -but I wanted to make sure the body understood Senator Wickersham's discussion that this may be... the ability for early retirement is actually maybe a cost-savings measure and wouldn't be an expenditure that would put a stress on the levy, and thus it shouldn't be outside the lid. Thank you, Mr. President.
SENATOR BERNARD-STEVENS: Thank you, Senator Kristensen. Senator Landis. I don't see Senator Landis. Senator Witek. Question has been called. Do I see five hands? I do see five hands. The question is, shall debate case? All those in favor vote aye, opposed vote nay. Senator Warner, did you wish recognition?
SENATOR WARNER: I was going to save some time and withdraw the amendment.
SENATOR BERNARD-STEVENS: The Chair had not actually asked the Clerk to record or to begin the vote so, Senator Witek, if that's acceptable? Senator Warner, we'll recognize you at this point for the purpose of...
SENATOR WARNER: Mr. President, as I indicated in the opening, it was to generate more discussion on this specific proposal. And having listened to it, I would withdraw the amendment.
SENATOR BERNARD-STEVENS: The amendment is withdrawn. Is there any further discussion on the Janssen amendment? Senator Robinson. Senator Robinson, on the Janssen amendment.
SENATOR ROBINSON: Mr. President, members of the body, I would, since Senator Warner withdrew the amendment, I would ask everyone to support the Janssen amendment. Thank you.
SENATOR BERNARD-STEVENS: Thank you, Senator Robinson. Senator Stuhr.
SENATOR STUHR: Yes, Mr. President and members of the Legislature, I stand in support also of Senator Janssen's amendment. I had a number of schools that contacted me about the sinking fund and their concern, so I definitely would support that. Also I would just like to add that it was stated earlier today that I think attitude is the most important thing in this whole process, that we're all going to have to work
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together, administrators, teachers, and I think this amendment does address certain parts. I don't think in the world that we live in today there is job security in a lot of areas. And I think that we have to challenge our administrators and teachers to look at the idea of tenure and see how we might address that. So, I do support the amendment. Thank you.
SENATOR BERNARD-STEVENS: Thank you, Senator Stuhr. Senator Pirsch.
SENATOR PIRSCH: Thank you, Senator Bernard-Stevens. I would have a question for Senator Warner, if he would yield.
SENATOR BERNARD-STEVENS: Senator Warner, would you yield. to a question?
SENATOR PIRSCH: Senator Warner, we have adjusted the fiscal note at least once since we started this bill.
SENATOR WARNER: Pardon?
SENATOR BERNARD-STEVENS: I don't think he can hear you, Senator Pirsch.
SENATOR PIRSCH: We have adjusted the fiscal note on 1114 at least once since we started. Would this also change the impact on the percentage of reduction in property tax statewide?
SENATOR WARNER: My assumption, Senator Pirsch, is that over time it would go the other direction, it would be less expensive. I think what Senator Janssen is trying to get to there may be an initial extra cost, but as ... follow Senator Wickersham's suggestion, in a very short period of time you're going to have a reduced cost. So in that sense, over time I would say it would reduce costs. But this is allowing for that initial additional cost that you might...
SENATOR PIRSCH: Then in that sense ...
SENATOR WARNER: ... have because the lower salary wouldn't (inaudible) ...
SENATOR PIRSCH: ...over the long run they would retire some of these more expensive teachers and ...
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SENATOR WARNER: Well,...
SENATOR PIRSCH: ...have lower salaries?
SENATOR WARNER: ... I don't want to say we're going to retire the more expensive teachers. I have a belief that they are probably in many cases the best. But as I read it, it says voluntary retirement.- And I don't object to someone who voluntarily wants to retire early. If this was compulsory, I would be opposed to it very strenuously.
SENATOR PIRSCH: That would probably.... In fact, that's what corporations are doing now, I think, in a lot of cases. So I agree that I think the voluntary is a protection there. Thank you.
SENATOR BERNARD-STEVENS: Thank you, Senator Pirsch. Senator
Janssen, there are no further lights. Would you wish to close?
SENATOR JANSSEN: Thank you, Mr. President, members of the body. I think we've had a good discussion. Appreciate Senator Warner's input, Senator Kristensen's, Senator Wickersham. I hope that you can support the amendment to 1114. Thank you.
SENATOR BERNARD-STEVENS: You've heard the closing. The question is, shall the Janssen amendment be adopted? All those in favor vote aye, opposed vote nay. Record, Mr. Clerk.
ASSISTANT CLERK: 26 ayes, 0 nay s on the adoption of Senator Janssen's amendment.
SENATOR BERNARD-STEVENS: The amendment is adopted. Mr. Clerk, are there further amendments?
ASSISTANT CLERK: Next amendment is offered by Senators Warner and Wickersham. It's Amendment 4364. 1 think copies have been distributed. (See page 1848 of the Legislative Journal.)
SENATOR BERNARD-STEVENS: Senator Janssen, you're recognized to.... Excuse me, Senator Warner, you're recognized to open on your amendment, or Senator Kristensen, if you wish. Senator Warner, it's back to you.
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SENATOR WARNER: Okay. Mr. President, members of the Legislature, this is a harmonizing amendment. There are a variety of sections of law that were left out that required or rather permitted rather certain exceptions for different levies for a variety of purposes and we thought we'd, staff wise at least, Bill Drafting thought they had picked up of all and found a few others and so it includes that, plus there is additional language in the event that there is some section that we didn't, pick up that should have been amended. On the last page of your handout is the... indicates that, notwithstanding the other provisions of law, the only exceptions to the limits are those that are provided for specifically in this act, or in Sections 1, 2, 3, and with the adoption of that amendment it at least will avoid a conflict if one should result some time in the future where there's some section of law that we didn't pull out in order to properly amend, if it was to authorize the levy over and above whatever limitations that the entity had. So I'd ask that the amendment be adopted as it's strictly a harmonizing amendment.
SENATOR BERNARD-STEVENS: Senator Warner, was that the conclusion of your opening? Is there any... there'd be no further lights. Closing is waived. The question is, shall the Warner amendment be adopted? All those in favor vote aye, opposed vote nay. Have you all voted? Record, Mr. Clerk.
CLERK: 25 ayes 0 nays, Mr. President, on the adoption of the amendment as offered by Senator Warner.
SENATOR BERNARD-STEVENS: The amendment is adopted. Mr. Clerk.
CLERK: I have nothing further on the bill, Mr. President.
SENATOR BERNARD-STEVENS: Move to discussion on the advancement of the bill. Senator Wesely.
SENATOR WESELY: Thank you, Madam (sic) ... Mr. President, members of the Legislature. We are about to vote on the advancement of LB 1114 on to Final Reading. I have not participated a great deal in the debate on the issue. I know there have been a number of amendments. People have had a chance to discuss this measure in great detail. I, for one, want to stand and for the record indicate that I continue to support the eventual passage of LB 1114 because of the previous experience that I've had in
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an attempt to try and make some changes in our school districts. LB 1234, a bill to reorganize our schools to try and bring greater efficiency, was unable to advance with strong opposition from the education community, and it was an indication to me that we are not seriously looking at major change structurally in our governmental subdivisions. I believe fundamentally that we have too many governmental subdivisions. Mostly among them would be our school districts and if we are ever to achieve the efficiencies that people want in government in this state we are going to have to eventually reconcile these subdivisions and whether or not the local control that they bring are worth the inefficiency that they bring as well to the delivery of services. That is the trade-offs that we will have to eventually consider as we pursue implementation of the. legislation in this property tax package. There is some good to be achieved through the pressures applied by lids, by forcing people to examine carefully their structure by the relationships that they have, the opportunities they have to reorganize themselves. That is the positive side of reorganization. That is the positive side of levy limits on property taxes. There is, however, a negative side. It's that negative side of these proposals that concern me greatly. If we ultimately pass this legislation and then do not see a reaction by the subdivisions and then move forward and implement what we're talking about, I see some serious consequences for our schools, for our services that have, I think, built a quality of life in Nebraska second to none. We always rank very high in any city or state figures in terms of the kind of lifestyles that we have in our state. We have good schools. We have good education. We are relatively safe compared to other states. We have some opportunity economically. We have, I think over all, a pretty good road system. We have many other things to be thankful for. That didn't happen by chance. It took money. It took taxes in many cases to make that possible. Now to apply pressure and then not recognize that we may have to revisit and we will have to revisit next year and the following year and every year afterwards, not to apply too much pressure but to apply the proper amount of pressure. In medical terms, we all know that there are times in which we must apply pressure to heal wounds to bleeding and to stop that. Other times, you apply too much pressure and the consequence is very, very bad on the health of the individual involved. So pressure can be good. It can lead to change that can be constructive. Pressure can be bad. it can lead to consequences we can't even imagine at this time. So
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I, for one, am rising to acknowledge I will support LB 1114 off of Select File, think about it further, but the only reason I'm doing so is because I do think that it will send a message that we want the subdivisions of government in this state to begin to seriously examine things that they have not seriously considered in the past. But in the end, I acknowledge the arguments that Senator Beutler has made and I think Senator Bernard-Stevens has made that these sort of lids, that these sort of limitations on local governments will have severe consequences to the quality of life that we have, to the quality of education that we have, quality of public services that we have, and all of these are intertwined. So I will reflect on this further, but I do see at this time a desire to move forward, but if we think that this ends the process to me...
SENATOR BERNARD STEVENS: One minute.
SENATOR WESELY: (inaudible) again., it begins the effort. A lot of discussion at the local level will have to occur. A lot of discussion town by town, school district by school district, city by city, county by county will have to occur as to what in fact is a proper level of taxation in services across the state of Nebraska. I think this discussion is healthy. I would prefer it to the discussion we're now having with petition circulators sticking something in front of somebody's face and saying, you want lower property taxes, sign the petition. it's not exactly a dialogue that leads to constructive solutions. I don't think those petitions in fact lead to *construction solutions. They would put us in a straitjacket, a constitutional straitjacket at that, and so I oppose those constitutional amendments. This is statutory. It gives us a chance to be flexible. I think we'll need to be flexible because I think the limitations will be too severe and the impact too negative on the state ultimately, but nevertheless I, for one, am attempting to work to apply pressure to see change ...
SENATOR BERNARD-STEVENS: Time.
SENATOR WESELY: ..and I would support LB 1114 for that reason. Thank you.
SENATOR BERNARD-STEVENS: Thank you, Senator Wesely. Senator
Warner, followed by Senator Schrock, Schellpeper, and Robinson.
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Senator Warner waives off. Senator Schrock.
SENATOR SCHROCK: Mr. President, members of the Legislature, I've not spoken out much on 1114. I don't intend to take much of your time today. I was one of two senators who voted against LB, 1114 on General File. I will continue to vote against 1114 because I believe it takes away the budgeting authority of our local governmental subdivisions. If we elect our school boards, our city councilmen, our county supervisors or commissioners and we don't like the way they're spending money, we have the responsibility as taxpayers of that local governmental subdivisions to put the pressure on them at that level. if we're going to take away their budget authority it appears to me like we just as well do away with those boards and send an administrator out from Lincoln. Seems kind of hypocritical to me that we're all ... everyone in here's saying, federal government, get off of our back, but now we're trying to run our local government from Lincoln. That's the reason I've been voting against 1114, will continue to do so. May not make a lot of sense, but I'm for property tax relief as much as the next person, but I think we're kind of adding fuel to the fire out there. I, too, would probably rather not see some of these constitutional amendments pass, but, as a citizen, they're looking at lot better to me than they did before we started the session.
SENATOR BERNARD-STEVENS: Thank you, Senator Schrock. Senator Schellpeper.
SENATOR SCHELLPEPER: Mr. Chairman and members, I also rise to oppose LB 1114. 1 was the only senator in the Revenue Committee that did not support the bill out of the committee and basically the reason that I did not is because it treats everybody, all of the towns, the same and I don't think you can do that. I think you have to treat them differently. I've made that comment yesterday. We argued about it and it's still something that I think is going to kill our small towns and our small schools and I don't think it's something that has to be done. I think that if we're going to move down this road we need to put some type funding into it so that at least the small towns can say we can maybe cut a-little bit. But you can't cut three-fourths of your levy, your budget. It just can't be done. You can't cut that much out of your budget. So I think that this bill, it sounds good. I think it sends the wrong message to the people in this
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state. They think that we're really doing something. We're not doing a thing to the large counties, to the large cities. All we're doing is we're damaging the small, the rural areas of this state and we don't have to do that if we would put some funding in. I know some people, some of the other senators say, trust us, we'll put the money in there once they cut their budgets. How far down do they have to cut? Do they have to go all the way down till everybody leaves town till they have no more services and then we'll gradually build them back up again maybe? I don't think that's the way it should be done so I'm going to oppose LB 1114. 1 know it's the cornerstone of the entire package, but I just don't think that this is the right way to have property tax relief in this state. Thank you.
SENATOR BERNARD-STEVENS: Thank you, Senator Schellpeper. Senator Robinson.
SENATOR ROBINSON: Mr. President, members of the body, what happens if noth...if we don't do anything? Why don't we just forget all about all the bills and not do a thing? What will happen? I don't know. Maybe nothing will happen, but just Bay what would happen if the Jaksha amendment and the Farm Bureau and the teachers union amendments got on? Boy, wouldn't we have a beautiful time down here next year? Really would have a great time. Right now, we pay taxes till the ... I think it's the middle of May. That's the problem and I think it's like Senator Warner said, we're not going to desecrate the schools. If we pass 1114 and there aren't any constitutional amendments, we will come back in here and take a good look at 1114. You know it and I know it. I think people are getting scared and I don't think they have any reason to get scared, but there's a reason people are concerned about property taxes. Property taxes for K-12 schools from '85 to '95 went up 354 million. Special education went up 69 million, 137 percent. State aid went up 226 percent, 287 million dollars. How about property tax... ? I mentioned the K-12 property taxes. Counties went up 53 percent. Tech schools and ESUs went up 93 percent; NRDs, 95 percent; fire districts, 77 percent; miscellaneous districts, 70 percent. That's the reason that people are upset. We've probably been spending too much money. Can we be more efficient? I think in every level we could probably be more efficient. -Now the people that run those organizations say no, but I think they- can be more efficient. I think we can be more efficient in K-12 education, but if we don't look at how much we're spending we're
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making a mistake because that's the reason we're looking at these bills today. You go out and talk to individuals that don't have anything to do with government. Ask them what they think. Naturally you're going to ... you know the old line you're going to get from people that are involved in government. I don't blame them. I'd Bay the same thing. How many complaints have you got from people that are not involved with government? I haven't got any. I've had very... I can't think of one. Now, I've had complaints from people that are involved with government, but not one from the people out there that are working outside of government. And you talk to most of them on an individual basis and they said we ... they'll tell you we should do something. We should be more efficient, but I go back to what Senator Warner said in the World-Herald that if you think we're going to desecrate the schools, it isn't...we've never done it and we're not going to do it and it will never happen. Thank you.
SENATOR BERNARD-STEVENS: Thank you, Senator Robinson. Senator Warner, you're recognized to close.
SENATOR WARNER: Thank you, Mr. President, members of the Legislature. I appreciate the comments that have been made. I'm appreciative also, as I know all the Revenue Committee is, of the discussion it's had and amendments that have been offered. I think we have a better bill now than we did when it came opt of committee, but 1114 still retains what was that fundamental goal and that was to develop a atmosphere over these next two years where local governments are looking at spending, they're looking at ways for cooperative efforts there. When we get to another bill we're going to be looking at mandates. We're going to also have in place, followed up on Senator Robinson's comments, the same concept that we had that led to the development of a number of bills this session with a variety of committees involved of the Legislature in the... in the interim, and I think that this can be a good first step. it's obviously going to depend upon the cooperation of a lot of people, but I also believe there's a lot of people who are ready to do exactly that; that they want quality of service, they want to feel comfortable that it's being provided in a cost-efficient manner, and whether it's real or perceived it's almost immaterial. The important thing is we need to build confidence in government and I think this process can help accomplish that goal and that, Mr. President, I'd ask that
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LB 1114 be advanced to Final Reading or, excuse me, E & R for engrossment, I guess.
SENATOR BERNARD-STEVENS: Thank you, Senator Warner. Senator Maurstad. Senator Maurstad?
SENATOR MAURSTAD: Mr. President, I dutifully, respectfully ask to advance LB 1114 to E & R for engrossment.
SENATOR BERNARD-STEVENS: You've heard the motion. Is there any discussion? Chair seeing none, all those in favor say aye. Board vote's been requested. All those in favor of advancing 1114 to E & R for engrossing vote aye, opposed vote nay. Record, Mr. Clerk.
CLERK: 26 ayes, 7 nays, Mr. President, on the advancement of 1114.
SENATOR BERNARD-STEVENS: The bill is advanced. Mr. Clerk, are there any items for the record?
CLERK: Not at this time, Mr. President. Thank you.
SENATOR BERNARD-STEVENS: Next item on the agenda then.
CLERK: LB 299. Senator Maurstad, I have Enrollment and Review .amendments first of all, Senator.
SENATOR BERNARD-STEVENS: Senator Maurstad.
SENATOR MAURSTAD: Mr. President, I'd move to adopt the E R amendments to LB 299.
SENATOR BERNARD-STEVENS: You've heard the motion. All those in favor say aye. Opposed? The ayes have it, the amendments are adopted.
CLERK: Mr. President, the first amendment I have to the bill by Senator Warner. Senator, I have a note ... oh, I'm sorry. AM4281, Senator, is the first amendment I have. (See page 1807 of the Legislative Journal.)
SENATOR BERNARD-STEVENS: Senator Warner.
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