LB 989, General File, March 5, 1998

Debate Transcripts

LB 989 (1998)

General File

March 5, 1998

SENATOR BOHLKE: Mr. Speaker and members, I thank you for the attention and what I think has been a very good discussion. I think it was helpful to have the division so that we could take each of the divisions and discuss them separately. I think it gave everyone an opportunity to have a better understanding of the bill and the separate parts to it. When I started out, I said that I look forward to a bill where I did not have to hand out a printout. We did not have to look down and see how this was going to play for one school district or another school district, but we really had an opportunity to discuss programs that we thought would raise the quality of education in our schools across the state, and give schools the opportunity to apply, if they wish, for those funds from the lottery fund, and then have a great deal of flexibility to spend that money on innovative things for their district. It is one of the few times that government does that, I think, that returns that, gives that funding or resource to a school district, and says, you've made good decisions, and an long as it fits under the umbrella of continuing of purchasing something that is innovative for your district, it's a recognition of the curriculum and that their commitment to offering programs to develop a quality education. I ... I think we've had a good discussion on a number of issues, from mentoring to statewide testing, certainly to the experienced teacher in the classroom, a number of issues, dropout rates, those things that are really important to education, and certainly important items in our public schools today. I think it's been a very, very good discussion. I thank you for your attention, and that concludes my closing.

SENATOR VRTISKA PRESIDING

SENATOR VRTISKA: Thank you, Senator Bohlke. We'll vote on the advancement of LB 1228. All in favor vote aye, those opposed vote nay. Record.

CLERK: 32 ayes, 3 nays on the advancement of LB 1228.

SENATOR VRTISKA: LB 1228 advances. Mr. Clerk.

CLERK: Mr. President, LB 989, a bill originally introduced by Senator Coordsen. (Read title.). The bill was introduced on

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January 8 of this year, at that time referred to the Revenue Committee. The bill was advanced to General File. I do have committee amendments and amendments to committee amendments pending, Mr. President.

SENATOR VRTISKA: Senator Coordsen, to open on your bill.

SENATOR COORDSEN: Thank you, Mr. President, members of the body. LB 989 is a bill that I introduced on behalf of the Governor and a bill that I supported; we talked about it in quite some time, designed to limit the amount of valuation increases that any unit of local government could access in any given year. As is typical with bills of this type, the Revenue Committee debated it within its own structure for a number of ... number of Executive Sessions. The results are a committee amendment that is the bill. And I believe that the committee chair ... are you going to explain the ... go through the committee amendment' Okay, so at this time, Mr. President, with that introduction, I would say that the committee amendment is the bill as it exists at this time. And I would defer to the Chair of the Revenue Committee to open on the committee amendments. Thank you.

SENATOR VRTISKA: Thank you, Senator Coordsen. Senator Wickersham, on the committee amendments. (See Standing Committee amendment, AM3370, printed separately and referred to on page 847 of the Legislative Journal.)

SENATOR WICKERSHAM Thank you, Mr. President, members of the body. LB 989 is build ... or I should say, builds upon the concepts that we had in LB 299. This is a lid on local government expenditures. It is a lid on counties, on schools, on NRDs, on ESUs. It is a limit on community colleges, it is a limitation on the expenditures of all those components of local government. As I've indicated, it builds on concepts that we introduced as a Legislature in LB 299 in 1996, as a way of preparing for the levy limitations in 1114. The limit on the schools is a General Fund operating expense limitation, and includes all costs, except the Building Fund. And, of course, the Building Fund is not limited tinder the provisions of this particular bill. The limitation in 989 is built around the concept called restricted funds. And restricted funds are the

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total of tax revenues and state aid. Now there's a small exception to that, and it is for keno funds that come from an existing keno operation, provided they don't exceed the revenues from the past three averages. Now an addition to the concept of restricted funds in this particular bill is the addition of monies that are received from the Municipal Equalization Fund that we created prior to this year, and the motor vehicle fees that art now going to be flowing out to the local political subdivisions as a result of 271. The limitation that in imposed in LB 989 is 2.5 percent, but an important consideration for this Legislature is that we're expressly providing for a system for annual review of that limitation by reason of a required hearing at the Revenue Committee, and the possibility for adjustments each year thereafter. Arid the Revenue Committee will seek to collect economic data, cost of living data that will allow it to make a recommendation to the full Legislature. There is an exception to the growth limit ... to the limitation, and it is for growth in terms of valuation in a district. Now it has to be real growth, it can't just be growth in the valuation of existing assets, it has to be real growth. The committee is recommending that we substitute that measure as an exception to the lid for population growth, which was in 299. We're having too much trouble determining population growth, because we don't have census data available, except on a ten-year basis, and it is sometimes difficult, because the census data isn't broken down in the same fashion that our current political subdivision boundaries are broken down. We think a good proxy for population is simply increases in valuation due to actions other than the 'growth in value of assets. We would include in this growth component a value that comes to a municipality by reason of annexation. Capital improvements are provided for in the bill. If you'll recall, in LB 299, we made an exception for capital improvements. That is continued but restricted. Equipment purchases would no longer be eligible for the capital improvement exclusion, but it does maintain an exception for real estate or improvements to real estate. And that exception will work out for, in particular, one kind of political subdivision, and that is NRDs. NRDs make extensive investments in improvements to real estate, and real estate itself, as a part of their water projects, terracing projects and other projects. It is appropriate that that exception in particular work for them for those very, very

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long-term investments that have to be funded over time. There is also an exception that allows all local governments to increase their budgets of restricted funds tip to 4 percent, to create or increase the sinking fund for equipment purchases. So we're going to allow a period so that sinking funds can be developed for equipment purchases. Sinking funds, the monies that go into sinking funds, in general, are restricted funds, they have to come from restricted funds. But when there is a distribution or a pay-out from a sinking fund, that is not considered to be a disbursement from restricted funds. And I think that's an important provision for many of the political subdivisions. There is an exclusion in the bill for Activities that are carried out pursuant to an interlocal agreement. if you'll recall, 299 had that same exclusion, but it would have sunsetted at the end of two years. The committee amendments would extend that exception. There is an exception that allows local governments to exceed the 2.5 percent limitation by 1 percent upon a three-fourths majority vote of the governing body. That was the same structure that was allowed in LB 299. There is also the safety valve of local votes that is allowed in the committee amendments. And the local votes that are allowed are of the same character and of the same process as those that are allowed for exceeding the levy limitations of LB 1114. Of primary interest to you may be the provisions for what amount to town hall meetings for the miscellaneous subdivisions. Those eligible miscellaneous subdivisions can have -a town hall meeting, they can vote to exceed the levy limitations of 1114, and at the same time vote to exceed the levy limitations of ... or the spending limitations of 299. That is, we believe, an important safety valve and is an important component of local important control and local discretion. In the committee proposal, like the current structure of LB 299, unused budget authority may be carried over. There were restrictions on carry-over budget authority that were contained in the green copy of the bill. The committee is recommending that those restrictions not be adopted. There is a change ... we're also adding a section that takes into account the Municipal Equalization Fund distribution, providing, as we have done ... I think it's comparable to the school funding area, that we're not going to provide state aid, which drives the local property tax levy for a municipality below the minimum effort level of that particular program. And Senator Coordsen, I believe, has an amendment that will

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immediately follow that affects that provision, moving that from the 40 cents stated in the committee amendment, to 35 cents, which we believe is a number that will prevent placing municipalities on kind of a roller coaster that they might otherwise be on, due to the interaction between LB 299 and the Municipal Equalization Fund. The limitation for schools, there is an allowable growth range that is from 3 to ... would be lowered from 3.5 to 5.5 to a range beginning with the base limitation to 2 percent greater, so that would be 4.5 percent. And we changed and deleted a number of references and language in the existing statutes that pertain to Class II and Class VI districts. Again, there is an exception provided for schools by the same process that would be provided for other political subdivisions, that is a 1 percent exception predicated on a three-fourths majority vote of the governing body. And again, as with other political subdivisions,...

SENATOR VRTISKA: One minute.

SENATOR WICKERSHAM: ... there's a process for the continuing review of the allowed percentage of growth. There are provisions in the bill that strike ... the amendment that strike green copy provisions that would have limited increases in expenditures due to student growth, the recommendation of the committee is that those not be adopted. Community colleges, I might note, also have a different. method of computing growth that is based on their students, other than the valuation method that we would recommend to you for the other political subdivisions. With that, I'd be happy to try to respond to any questions that members of the body might have. We've handed out a very short summary sheet which we hope hits the highlights of the committee amendment, but they could very well generate questions or issues that you believe should be discussed.

SENATOR VRTISKA: Thank you, Senator Wickersham. Mr. Clerk, is there an amendment?

CLERK: Yes, sir, there are, Mr. President. Senator Kristensen had the first filed, 3396, but I have a note you want to withdraw that, Senator.

SPEAKER KRISTENSEN: Yes, Mr. Clerk.

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CLERK: Mr. President, Senator Coordsen would move to amend. Senator, AM3472. (See page 894 of the Legislative Journal.)

SENATOR VRTISKA: Senator Coordsen.

SENATOR COORDSEN: Thank you, Mr. President, members of the body. As always happens, after a person thinks they have addressed every conceptual concern, there are things that come up that need to be fine-tuned, and I think it's important that the provisions that are contained in 3472 do be added ... are added to the committee amendments before we begin to debate those. First of all is that this amendment treats annexation in the same manner that growth in treated, and that would be found on page 1, line 12, after the first "property," would add "any increase in valuation due to annexation." What that simply means, soon as I find my handkerchief, is that if a ... any community in the state of Nebraska does annex any property, that the valuation of that property be taken into consideration for the next year's General Fund budget base valuation in the same manner that we have provided for the adjustment for population growth in the use of the ... in the use of increased valuation due to new construction and additions to additional construction. That is it would allow the community to increase their General Fund budget by 2.5 percent, or whatever was the allowable growth factor for that year. The second provision is that it would allow any interlocal agreement exception to be reworked to clarify that the time-at which an agreement was signed is not relevant. And the other thing is that all interlocal agreements stay in effect, in other words. Arid we had quite a discussion with respect to what to do with keno receipts. Keno receipts currently are a declining source of revenue in most of the communities in Nebraska whose citizens have allowed that community to provide that gaming mechanism. Recognizing that it's a declining source to bring that into the General Fund budget allocation and cap it with a growth factor could cause a leveraging effect on the property taxes of the General Fund budgeting in the community. So what we provided for, this is on page 3, line 17, we strike, after "act," "or which receipts" and replace that, "or gaming receipts from a local lottery which was operational before such date." Those are excluded, new lotteries or new games within the lottery are in fact included

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as accountable receipts for the purposes of the lid. And, finally, as Senator Wickersham indicated, we looked at the provision that we had had for the 40 cent cap on levy to trigger aid from the Municipal Fund and decided that that was so close to what communities were allowed to, that we could have a yo-yo effect and that communities would be getting municipal aid one year, not be getting that the next year. So it was lowered to 35 cents, and that would be the cut-off date for the Municipal Equalization Fund. With that, I ...

SENATOR VRTISKA: One minute.

SENATOR COORDSEN: ... suspect I would respond to any questions that people may have with respect to LB 34 ... or AM3472. Thank you.

SENATOR VRTISKA: Thank you, Senator Coordsen. Senator Will, on the Coordsen amendment to the committee amendment.

SENATOR WILL: Yen, Senator Coordsen, I'd like just to have you run the whole way the keno receipts would fit in tinder this, whether they were restricted funds or not. Again, I know you just addressed it, but I think clarification would be ...

SENATOR COORDSEN: Um-hum. It's ... I think it's worthy of repetition. It's My understanding that existing keno receipts would not be restricted funds, new games, new keno authorizations would be.

SENATOR WILL: So there would be a cut-off date when those keno funds ... the new keno funds would be, but the current ones would be exempt from the restricted classification, is that correct?

SENATOR COORDSEN: That's my inderstanding of the meaning of the language, yes, sir.

SENATOR WILL: Thank you.

SENATOR VRTISKA: Thank you, Senator Will. There are no other lights. Senator Coordsen, to close. Senator Coordsen waives closing. All those in favor of the Coordsen amendment vote aye, those opposed vote nay. Have you all voted? Record, Mr. Clerk.

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CLERK: 26 ayes, 0 nays, Mr. President, on adoption of Senator Coordsen's amendment to the committee amendments.

SENATOR VRTISKA: The Coordsen amendment is adopted. Go back to the committee amendments. Oh, excuse me. Other amendments, Mr. Clerk.

CLERK: Mr. President, yes, sir, I do. Senator Kristensen would now move to amend with AM3454. (See page 900 of the Legislative Journal.)

SENATOR VRTISKA: Senator Kristensen, to open on your amendment.

SPEAKER KRISTENSEN: Thank You, Mr. President, members of the Legislature. Obviously this bill revisited some of the areas that we have dealt with in the past, in particular this amendment deals with items that we passed and approved last year in LB 269, if you remember, the specific portion of that was the restructuring and redistribution of money 'An the aid programs to match and to live with levy limits. You did 806 for school aid, you did 269, last year, to deal with the community colleges. And so the issue that we have before us is we're in a year of transition over to the new distribution formula and restricted funds for community colleges. There 'As in that bill, just review with you last year, the goal. There are three funding sources for community colleges. They get money from property tax, they get money from tuition, and they get money obviously from state aid. For example, Metro Community College received approximately 25 percent of their monies from state aid, the rest of it was a property tax burden and tuition. The goal was to move to 40 percent, or as close as we could, from state aid, 40 percent from property tax, and the remaining portion from tuition, but you needed this year to make that transition to do that, they're doing it. What has occurred here, and particularly with Metro is this is a massive redistribution and this is the year that it's occurring. The bill and now the amendment as it has been done on 989 comes into there and the base years are occurring at the same time as this redistribution or in fact prior to that, so it causes some problems and doesn't allow for the full implementation of what we did last year to be done with the community colleges. What's

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the bottom line? The bottom -line is Metro gets caught in the middle. Metro is going to have about $1.4 million that they'll be unable to spend because of the bill if it's passed in its present form. There was a spending limitation, a lid placed in what we did last year. In fact it's lower and it doesn't allow... it's a 2 percent lid, it doesn't have any provisions for an override. And my interest is not going back and revisiting what we -lid last year, it's an effort to find a smooth transition. And so this amendment is not an exception to the lid, what it is is delaying this enough to allow the implementation to take place once the redistribution is done. So we need to let what we did last year occur, and then put the limit into it in the lid. However, the Revenue Committee has been extremely cooperative. Now that I've left they've become a lot more reasonable to deal with. And so Senator Wickersham and other new members, some of the old members really aren't that easy to work with, I guess. At least the newer members and Senator Wickersham have been pretty good to work with. And we are having some discussion, is there some other way to solve this problem. And at least as we stand right now, I want you to understand that this is a problem particularly with Metro Community College, that we've got to ... you've got to solve, or you're going to place them in a trap. And a trap is not particularly fair, I think, to do, and it would require us going back on what we had tried to do last year. It's my understanding that the Revenue Committee will continue to work with me. We have one other option, but we need to run the numbers and we need to make some calculations. This amendment is still viable. This is not a bad amendment. The first one that I had up there, that I withdrew, was a full exception. I don't think you ought to be making those exceptions at this point. This is a delay and riot an exception. But at the present time, and I'm going to leave this up for just a little bit so Senator Wickersham can make his observations, my intent would be to continue to work with members of the Revenue Committee. And if we can make this fix, with the proposal that's out there, it's best done on Select File, because it will be more of a surgical change rather than a delay. With that, Mr. President, I would yield back the remainder of my time to the Chair.

SENATOR VRTISKA: Thank you, Senator Kristensen.

Senator

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Wickersham, discussion on the Kristensen amendment.

SENATOR WICKERSHAM: Thank you, Mr. President. I concur with the description of the issue given by Senator Kristensen, it sounds like he hasn't forgotten everything that we taught him on Revenue Committee, (laugh) and I hope that he doesn't. It is a complex issue and it's a bit of an arcane one. It comes about because of the interaction between two laudable state policies. And whenever that happens, you don't want to penalize one of the political subdivisions or any of the political subdivisions that might be caught in that kind of a dilemma. We do believe that there are other ways to address this issue other than the one that is being presented to you by Senator Kristensen in this amendment. But in an overall tone, I do want to suggest to the members of this body and to the persons who work with local political subdivisions that it Is not our intent, through the provisions of 989 as they interact with other provisions of state law or policies, to be uniquely unfair to them, and to place them in a position that no one else is placed in, or to jeopardize them in some other way that they can characterize that's special or unique to them alone. It is in our interest to provide broad-based policies that apply to everyone and that to the extent we can provide for them that at least they apply uniformly, even if they might not always agree with us that they apply fairly because they want to do something else. But at least we'll make every attempt that we can to make sure that they apply uniformly and that they're not caught between competing policies of the state.

SENATOR VRTISKA: Thank you, Senator Wickersham. Senator Coordsen, on the Kristensen amendment.

SENATOR COORDSEN: Very briefly, Mr. President. This is a real issue, it's something that, as the two previous speakers indicated, is extremely difficult to work out. But we need to provide a mechanism for the community colleges because they are treated differently as a result of the provisions we made in (LB) 269, that their first year, primarily their first year budget after the distribution takes place has got to be in some way worked into 989 as the base year from which budget growth is allowed. Otherwise they're simply going to, for example, in the Metro example, will never be able to recover and get to the

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40-40-20 division of how community college services are provided that we envisioned with the passage of the bill last year. So, listening to Senator Kristensen, 7 understand tie's going to pull this, apparently he's going to pull this one. But we will be back after we work out some details, I'm sure. Thank you, Mr. President.

SENATOR VRTISKA: Thank you, Senator Coordsen. Senator Kristensen, do you wish to close? You're the last light, or ....

SPEAKER KRISTENSEN: I do, Mr. President, and with this explanation, that the understanding that Senator Coordsen and Senator Wickersham have given, I wanted to raise the issue that it's one that we've got to address this year, it's a difficult issue. They've been very willing to work. And it makes me sad a little bit that all my mentoring efforts on Senator Wickersham failed, and now I have to suffer the whip of the student, but I'll accent that. What I would request, Mr. President, is to withdraw this amendment and refile it on Select File at this point in time.

SENATOR VRTISKA: No objection? It is withdrawn.

CLERK: Mr. President, Senator Kristensen, I now have AM3467, Senator. (See page 900 of the Legislative Journal.)

SENATOR VRTISKA: Senator Kristensen, to open on your amendment.

SPEAKER KRISTENSEN: Thank you, Mr. President, members of the Legislature. This is the second portion of things that are left over from Revenue Committee past. This is a short amendment that you will see, but it has a basic, fundamental question that most people, I think, would be interested in, and it's a philosophic issue. The philosophic issue is the keno funds that are being proposed in the bill to be done. Traditionally, what we've done, in fact constitutionally there's a requirement on -,those keno funds to be used, I think, for community betterment. This bill puts those funds for certain keno funds in restricted funds. What does that mean? Well, in effect, what happens is that in the past it's been the policy of the state that when we have gambling revenues they're not to be used for operations. Now I voted other ways in the past, but I'm telling you what the

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current policy is that's being reaffirmed, in fact it was just reaffirmed in the last bill, that you're not going to use those things for general budgets and operations, it's because of the unpredictability, it's hard to build those into the base. And so the best public policy has been they're going to be used for one-time projects, these are keno funds, and for special projects. And that's how we've chosen to do keno, we've done that with the state lottery and so forth. Now what's going to happen here is the cities and counties can use those keno funds for community betterment. But when you include those under this lid, they're going to then treated as general tax revenue, at least for the new keno games and the ones that have been up and running for just the last three years. And Senator Wickersham was accurate in his description of the average and so on. This is a philosophic discussion. Do you put those keno funds in for operations that are going to have to be covered by ... instead of tax revenues, you're going to have to use the kenos to make tip those revenue funds. And so this amendment merely strikes out the keno from the restricted fund definition, which means in effect that the keno funds would be used for what we've always used them for--that's the new keno games and the ones within the last three years that are up. It comes down to what do you believe? Do you believe you should continue to use keno funds for that, or are you going to erode that and begin to put them into restricted funds, which means when there's a decrease you're going to have to make it up with tax funds, if you have some increases in those kenos that means you might have a decrease in -some of the other revenues. So the question on the other side would say, well hold it, if you're going to start a new keno and we're going to restrict the growth of that fund, too. it's how far do you want the tax lid to go? Philosophically, what's happened in the past is we've not had restrictions on those keno funds, and if you leave it and you don't adopt this amendment. in effect what you're going to have is keno funds now going to make up general operation funds, and they're going to be built in, in some of these communities, for General Fund Operations. And that's not the intent of doing the keno, that's the reason I bring the amendment. It's a fairly clear-cut, philosophic choice, and I would urge the adoption of the amendment, Mr. President.

SENATOR VRTISKA: Thank you, Senator Kristensen. Senator Will,

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on the Kristensen amendment.

SENATOR WILL: Thank you, Mr. President, members of the body. As most of you know, I've been involved in the gaming area the entire time that I've been in the Legislature. And I rise in more of an explanatory mode than anything right now, I think. Senator Kristensen is absolutely right when he says that this is a philosophic issue, it depends on how you view the use of local lotteries and where the money should go. We are the only state in the nation, to my knowledge, that allows local lotteries, and that's manifested itself primarily in the area of keno in the state of Nebraska. And I think what Senator Kristensen again said is correct, in that we primarily envisioned these dollars as going for specific projects or specific costa that are outside of the general ... General Funds, if you will, of local government 43, primarily cities. So there is in argument to be made for excluding these from the restricted funds, as Senator Kristensen is proposing. On the other hand, there have been a number of cities that have raised money through keno, they took advantage early on, after we approved "Local option lotteries, that have used these for what I would categorize as General Fund uses. And they may have been disguised as specific projects, but probably ordinarily they would have been funded out of General Funds. But I will tell you this, if a city can make a good case, if they can come in and say that we are using keno funds, we've identified a project, we're going to use these funds for that project, then conceptually at least and, as Senator Kristensen put it, philosophically they should not be included in the restricted funds. So that's the choice that we are faced with. The one thing that I would recommend, if we do adopt Senator Kristensen's amendment, which I probably intend to vote for at this point, I've not quite made up my mind, but I thought because of my experience in this field I should address it on the floor, if we do adopt this, we need to, in the future, perhaps even this session, make sure that keno funds are directed towards specific purposes. Community betterment has been interpreted, and again Senator Kristensen is absolutely correct that our constitution requires that funds from gambling be directed towards community betterment. It's been interpreted very broadly, and indeed community betterment does include the general operations of government. But I'm riot sure that that's what we envisioned when we approved local option lotteries and

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keno to be conducted by cities and counties. So if we reject Senator Kristensen's amendment, I think we're opening the door to just say, these are a supplement to your General Fund dollars, and they fall under the restricted fund definition in this bill. If we accept it, I think we need to go and look at what we define statutorily, not constitutionally, but statutorily as purposes that keno funds can be used for. So, with that, I would leave that as an explanation of my understanding of where keno sits, what Senator Kristensen's amendment would do. I will probably vote for Senator Kristensen's amendment because I think it's probably the boot course to take at this time.

SENATOR VRTISKA: Thank you, Senator Will. Next speaker, Senator Wickersham, on the Kristensen amendment.

SENATOR WICKERSHAM: Thank you, Mr. President. The issue that's being raised by this amendment is one that received considerable discussion in the Revenue Committee as we developed the committee amendment. And quite frankly, at- various times I would have said that we would have agreed, as a committee, with Senator Kristensen. But the final position of the committee was that as you see it in the committee amendments, and here's why, and part of it is what Senator Will was talking about. it's true that you're only supposed to use keno funds for community betterment projects, but how you describe and define those and how you police that is difficult at best. And all of us know that when you have a big pot of money and you're going to use it for a variety of purposes, it's hard to keep that segregation. And while it isn't prudent as a matter of financial management to rely on gaming funds for any sustained program, because they may decline, and in fact as I understand it keno funds are declining on a statewide basis, that there may be political subdivisions that have used those funds in that way to prop up, as Senator Will, I think, indicated in his comments to you, projects that normally would nave been funded out of the General Fund if they were done at all. Now, the other discussion in the committee was that if we allowed an exception to the restricted funds rule for keno funds, that we would send a strong message to municipalities that that was the preferred way to raise revenues, and you would create strong incentives to in fact use keno funds in ways that we would not have thought were'

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appropriate, because any time you restrict all of the other kinds of funds and then leave one kind of fund open, just imagine how strong the incentive is to use that particular mechanism to raise funds. And we did not want to send that message. We did recognize, however, that you needed to do something about the historical basis for keno funds and their current uses in state law. So we said the only part that we're going to count as restricted funds are those that are in excess of your three-year average. Your old keno funds are still not restricted funds, at least what you had on a three-year average. But the new ones would be restricted funds, so you don't create that incentive to go out and create new dollars for use exclusively through keno. What we think we present to you is a balanced approach to this issue, which is neither too restrictive, nor too loose, does riot create undue incentives, but does recognize what the historical uses of keno funds have been and &es not impede that historical use in those historical amounts. So we hope that we have appropriately split the issue and that we're presenting to you a balanced approach. Neither do we want to "incent" the use, the additional use of keno, we don't want to discourage that particularly, if that's what a community wants, we don't want to impair their current base or their current uses of the program.

SENATOR VRTISKA: Thank you, Senator Wickersham. Senator Schellpeper.

SENATOR SCHELLPEPER: Thank you, Mr. Chairman and members. I rise to also oppose the Kristensen amendment. If you're going to accept this amendment, you're going to say to the cities, we want you to expand gambling in your city, because the more outlets that you have, the more income that you can then receive for other projects. If you'll just look at some of the past history of some of these keno outlets in the larger cities, the more outlets that they have, the more income that they receive. And the trend is to get more outlets, because as you get outlets in each one of these little bars, as the people are there, then you get more income. And I think the approach that the Revenue Committee took is a very even approach, it's one that will even out using the last three years. To go the way of the Kristensen amendment, I think you're really opening up to a lot more gambling in this state, if that's what you want to do, because

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it would... the city would be out there just trying to get more outlets, because that's where the revenue would be outside of this here levy lid. And that's not a thing... it's probably not something that we should really be doing this year in this session. So I think, although it's a ... it sounds like something that they have been in the past, that the committee amendments to this bill really address that Issue, and I think it's a very fair approach. I think the cities, it's something that they can really live with, and it would allow them to have a steady growth, and not to go in and any the more we get the more we're going to have money outside of the budget lid. So this As one of the problems that you have with a budget lid. But to allow the keno outside of it I think would be the wrong approach. The Revenue Committee approach, I think, is the better way to go, So, with that, I would oppose the Kristensen amendment. Thank you.

SENATOR VRTISKA: Thank you, Senator Schellpeper. Next speaker, Senator Robinson, speaking to the Kristensen amendment to the committee.

SENATOR ROBINSON: Mr. President, members of the body, I stand to support the Kristensen amendment. What I observed, I don't think the cities go overboard on using the keno funds. What's wrong with the city where they don't have enough money and they have some improvement they want to do, I think it's nice to have some... I know all people, all towns don't have keno funds. But I don't see anything wrong with that. You're just going to... you're going to make it part of the General Fund, the average of three years, over that. And I don't see an increase in keno operations. What I've observed, they're going the other way in the amount of money that they're taking in, since all the gambling is taking place in Council Bluffs, certainly in the metropolitan area those funds have gone down. And I would urge you to support the Kristensen amendment. I think the subdivisions that have the toughest time are the cities, the cities and the towns and the villages. I think we should help those out some. I think what you're doing, you're squeezing them, you're making it tougher for them, tough in the sense that they don't have any money to have any kind of improvement at all with the income that they have now. Thank you.

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SENATOR VRTISKA: Thank you, Senator Robinson. Speaking to the Kristensen amendment, Senator Coordsen.

SENATOR COORDSEN: Thank you, Mr. President, members of the body. As several previous speakers have indicated, the Revenue Committee probably spent more time on keno funds than any other single issue of the ... that is contained in 989. The decision was made, and It was a conscious decision, no-: to ... not to include old keno games because they are, as these statistics demonstrated, a declining source of revenue. But the question became, what about new ones? Because, historically, games are pretty good sources of revenue for a little bit. And I don't know that there wasn't a unanimous agreement, a consensus agreement was that if keno was included or excluded as a restricted fund, it was quite probable, as Senator Robinson indicated, every community would have a local option keno on the ballot an' create for themselves ... and if they used that for General Fund operating expenses, they would create for themselves a situation where they would be leveraging their own property tax revenues in the future. And that's why the decision was made to bring a bill, by amendment, to the floor that contained several ... two different ways of treating keno revenues--the existing one way, and new revenue from keno games would be treated as a restricted fund. We felt that this was a decision, and certainly the Kristensen amendment isn't unexpected because we felt this was a decision that ought to be made on the floor of the Legislature. I think that the decision the Revenue Committee made is in fact the better of the decisions, but the rest of it is up to you. I. do, at this point in time, oppose the Kristensen amendment. But that decision will be made finally here, and it won't ... really won't affect the viability of 989 at all. It's a decision that's relatively minor, but it could have some serious effect for some municipalities in the state over a period of time. Thank you, Mr. President.

SENATOR VRTISKA: Thank you, Senator Coordsen. The next speaker is Senator Will.

SENATOR WILL: Thank you, Mr. President, members of the body. I think this amendment raises a larger question that the Legislature has considered during the entire eight years that

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I've been here and beyond, and that's the question of gambling in Nebraska. The fact of the matter in we've missed the boat, literally, we missed the boat, we don't have a boat here, which we probably should in my estimation. But in any event, what we have done in Nebraska is allowed local subdivisions to operate keno games. And one thing that they do is allow individuals to engage in keno, to gamble, to have fun in a leisure activity, and at the same time raise money for local subdivisions. And, frankly, there was a point where I would have voted to repeal the statutory authorization for keno, and that point has passed. The cities won that battle. And that being the case, and the fact being that we are imposing budget limits and levy limits on local subdivisions, I think we need to recognize that there are additional revenue sources, such as keno, that can supplement those budgets and do not fall within the parameters of the tax limits that we talk about when we are discussing limitations, and keno falls outside of that. I think philosophically Senator Kristensen stated it correctly, philosophically keno is outside of the limits that we Are talking about when we are talking about this bill. There's a good argument to be made on the other side that Senator Coordsen and Senator Wickersham and Senator Schellpeper have made, that all funds that are coming in ought to be included. But, frankly, if the populace of a community or of a county decide that they want to have a keno game, to have local option gambling, to raise revenue that way, and the populace wants to engage in that type of gambling, that's probably something that ought to be left up to them, that's something that we probably should treat much as we do local option sales tax, that ought to be left out of the equation when we're talking about property tax relief and when we're talking about local budget limits. It's something that I think probably a legitimate argument can be made, as Senator Kristensen and I have, to leave it out of the equation, and I will support the Kristensen amendment.

SENATOR VRTISKA: Thank you, Senator Will. Next speaker is Senator Wickersham on the Kristensen amendment.

SENATOR WICKERSHAM: Thank you, Mr. President. I'm going to try to be brief. I guess my remarks before, either they weren't clear, r whatever. Several people came up to me and they asked, do you support the Kristensen amendment? So I'll have to

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state for the record, no, I don't support the Kristensen amendment. I don't think it represents the kind of balanced decision that the Revenue Committee is recommending to you. Again, I believe that if you adopt the Kristensen amendment you will produce in state law a strong incentive to use one particular kind of funding for a particular kind of municipal operations. And that, I think, is questionable for us to produce that strong an incentive through our lid policy. The proposal that comes to you from the Revenue Committee splits that decision and says, in effect, we recognize the historical uses, we recognize the historical dollar amounts that have been devoted to those uses, we're going to preserve that. But if you have dollars that come into that fund in excess of your three-year historical average, those are going to be restricted funds. And I think that any objective to reduce property taxes is achieved with that kind of a policy, any kind of an objective to allow for community betterment projects is still preserved by that policy, but you do not create what we think would be an overreaching incentive to use a particular kind of funding, and we don't wish to send that kind of a message that we do not care to, as a matter of state policy, suddenly create an incentive for all kinds of keno games and keno parlors where they were not before. The decision to use that particular kind of funding should not be based on our lid policy, it should be based on local considerations. So I do oppose the Kristensen amendment.

SENATOR VRTISKA: Thank you, Senator Wickersham. Senator Hartnett. speaking to the Kristensen amendment.

SENATOR HARTNETT: Mr. President, members of the body, I'm a member of the Revenue Committee. I should maybe ... my new role that I like to get is everybody should...but I support the committee amendment, because I think ... and like Senator Coordsen said, we spent a lot of time in the Revenue Committee talking about this, are we going to start having every place in the corner have a keno operation? And I think that's the ... that's the ... I think was some of the fear with the growth of gambling. And I guess at one time I supported the gaming in the state, but I've changed my position, and so I simply think that the proposal, as presented by the Revenue Committee, is the right approach to use, because I think, as Senator Will talked about earlier, community betterment, that can be, community betterment

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can be anything. And I think it's ... it's ... it's ... hasn't been and was supposed to be for extra types of things. It's been used as part of the General Fund. So, for that reason, I support... I oppose the Kristensen amendment and support the committee amendment. Thank you.

SENATOR VRTISKA: Thank you, Senator Hartnett. Senator Jensen.

SENATOR JENSEN: Thank you, Mr. President, members of the Legislature. I also would stand in support of the committee amendments. I think that they have taken careful consideration of what can happen in this area. I think they've come up with a good solution to address any new activity, but leave the historical figures there that are gained from the last three years. I think it's a good compromise, a good solution, and I would oppose then the Kristensen amendment to change that. I think that the keno dollars that are coming into the cities are adequate at the present time. And I just get a little concerned of the creativity that cities might come up with when they talk about community betterment, not that they haven't done a good job in the past. So I just would urge the body to oppose the Kristensen amendment and stay with the committee amendments as drawn up at this time. Thank you.

SENATOR VRTISKA: Thank you, Senator Jensen. Senator Schellpeper.

SENATOR SCHELLPEPER: Thank you, Mr. Chairman and members. Once again, I rise to oppose the Kristensen amendment- In 1996 this body adopted LB 1114, which imposed lids on cities and counties and other subdivisions. If you're going to allow keno now to be outside of the lid, then why not sales taxes, or why not license fees for any liquor establishment, or some of chese other fees? I think you have to, if you're going to have lids, the approach that the committee took is to use the three year average. I think that's a very fair approach because I don't think you want the cities to go out there and to push more gambling in order to get more income. So I think with the committee amendment that is the way that, after a long talk with the committee members, we thought that was the beat way to go at this time and still not open -p the door to let a lot of other things out of the lids for budget lids. So I'd urge this body

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to not accept the Kristensen amendment at this time. Thank you.

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

SENATOR ROBINSON: Mr. President, members of the body, I stand again to support the Kristensen amendment. Interesting point of view of Senator Schellpeper, he says, well, maybe we ought to cut out the sales tax. Well, why do we count the sales tax? I got one town that has a sales tax, why should they be able to ... why should they be able to have a smaller levy? I don't think it makes &ones. As I mold before, the villages and the towns have the hardest time making (inaudible). I have one that's going to have to have a cent and a half vote to reach their levy, and I don't think they're going to do it. We're concerned ... like Senator Jensen, I know he's against gambling. I'm against gambling. If we don't like gambling, let's get rid of it, let's get rid of it, because what we're ... what we're ... what the people are saying on the Revenue Committee, well we don't like it, but it's here. If we think gambling is such a cancer, we should get rid of it. They should come tip and have a bill to ... let's get rid of it. But what they're saying, oh, we're going to let ... we're going to help the state a little, it's all right to help the state, but it's not all right for some community improvement by the towns in the state of Nebraska. I have one town that does a great job with community improvement, and they have a tough time doing it. I don't care, you go out and look at them.. How many ... Senator Wickersham, please, question.

SENATOR VRTISKA: Senator Wickersham, Senator Wickersham, will you yield?

SENATOR WICKERSHAM: Yes.

SENATOR ROBINSON: Do you have keno up in Harrison?

SENATOR WICKERSHAM: No, we have it in Crawford.

SENATOR ROBINSON: You have what?

SENATOR WICKERSHAM: We have it in Crawford.

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SENATOR ROBINSON: I didn't hear you.

SENATOR WICKERSHAM: I'm sorry, Senator. We have it in Crawford.

SENATOR ROBINSON: Oh, you have it in Crawford. Do you think they abuse it in Crawford?

SENATOR WICKERSHAM: Senator, the issue isn't abuse and the ... the committee ... the committee amendment allows keno to continue to be used. The issue is whether or not you produce an incentive, an artificial incentive, to use the funds in ways that are not necessarily appropriate.

SENATOR ROBINSON: Yeah. Yeah, but ... but when you say the average of the last three years, you're really ... you're really putting a ..noose around it. Whether you like it or not, you're put ... because ... I don't see ... keno is not increasing. It's just not increasing. And I think you're ... I think you're hurting some villages and towns. You take my hometown of Blair, my gosh, they...they have problems enough keeping up with the roads and they have keno and they ... and they use it for community improvement.

SENATOR WICKERSHAM: Yeah, if ...

SENATOR ROBINSON: I don't think it-hurts to have ... have that out there, because I'll tell you what you're going to do. You're going to wipe out anything that they would do for community improvement and I think they should have some money to do that. If it's the gambling thing, get rid of the gambler. The people that have the keno, they're still going to make the money, aren't they? They still make their money, don't they?

SENATOR WICKERSHAM: Yes.

SENATOR ROBINSON: But ... but a city, average three years, there will be very little keno...be very ... very little improvement ...

SENATOR WICKERSHAM: Senator ...

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SENATOR ROBINSON: ... with...with what the Revenue Committee wants to put in. That's why I support the Kristensen amendment. Thank you.

SENATOR VRTISKA: Thank you, Senator Robinson. Senator Raikes.

SENATOR RAIKES: Thank you, Mr. President. I wanted to make just one quick point. It would appear that this would be about the most restrictive procedure you could have for keno, but actually keno funds are not necessarily being restricted at the 2.5 percent or base limitation. If, that is new keno, new keno, could increase more than that if, in fact, the old keno or the three-year average, the keno receipts from that, drop below that level. So that there is actually some flexibility for more than the base limitation rate provided here. Thanks.

SENATOR VRTISKA: Thank you, Senator Raikes. Senator Landis.

SENATOR LANDIS: Thank you, Mr. Speaker, members of the Legislature. I've ... I think in a moment of temporary blindness, I'm not exactly sure of the committee process as to where we were on this one, but I have been reminded of my historical position on this and that is that gambling money should not work its way into the ongoing budget of continuing projects; that gambling money, with its up and down cycles, needs to be spent on a one-time project-by-project basis so it does not become part of the engine of governments continuing paying for the social contract. And as I reflect on that, now that I'm thinking about it, I think that means I need to vote for the Kristensen amendment and against my own committee amendments. Oh, I don't know how this happened to me, but it's...it can happen in the confusion of a session. I think my original public policy idea is right here. Gambling money, with its ebb and flow, with its uncertainty, with the fact that it doesn't come out of the tax process, should not work its way into the continuing long-term budgeting cycle of a city and be relied upon. Why? Because when it turns down then the city goes out and starts actively promoting it, extending it, supporting it, going on TV with the mayor and patting people who win and ... and relying on it not only so much that they ... that it's built into their budget but then, in a desire to stoke the fires and increase people's desire to gamble more. I got to tell you, I

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come to this thing reluctantly. I don't think we should be paying for government out of gambling generally; and if we work gambling money into the base budgets of cities and they come to rely on it to pay for fire and police, then they will have the need to stoke the fires of gambling to make sure they have enough money to cover their base societal projects and...and that I find a disturbing trend, because then the city won't be neutral on the existence of gambling. It will be pro gambling and it will be out encouraging gambling, which I find generally is an act that is "arational" (phonetic) at best. What gambling does is it makes some people victors, in excessive amounts, and then takes away needed money from the others to pay for the one big winner that you get. You put somebody into the lap of luxury and you take a lot of other people and reduce them and their subsistence level to pay for the one big winner. And that's not a good idea conceptually and I don't think it's a good idea economically. So I got to tell you, even though I may have voted for the committee amendments in the committee, I voted against the advancement of the bill so I don't have that much of a loyalty to a bill I voted against that I can't now stand up and remind myself of the long-term public policy I've supported, which is don't work gambling money into the long-term base budgets of government. They will then have to stoke the fires to keep the gambling money come in...to come in and they will eventually be somebody who is advocating and encouraging actively the use of gambling to fund government. Shouldn't do it. We should fund government through taxes, as painful as they are. That's what keeps, spending...that is a factor in keeping spending low, by spending tax dollars that people are unhappy to turn over to the government.

SENATOR VRTISKA: Thank you, Senator Landis. Senator Robinson.

SENATOR ROBINSON: Where's that sheet at? Where's that sheet? Mr. President, members of the body, Senator Elmer just handed me something that I think is real interesting. It says keno helps local food banks. I ... I think that's in there. It says, as I recall, I think there's going to be some people that are going to the hockey, I think Senator Schmitt told me they're going to the hockey game In Omaha tonight. Real interesting. I don't know how you people can go there now because right here it says UNO Mavericks hockey season finally arrives, and evidently Big

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Red Keno, helped them out a little, too, so I might go anyway, but that doesn't bother me. Here's ... here's another one--Henry Doorly Zoo, the garden of the senses, Big Red Keno has helped to raise money for the garden of the senses for the Henry Doorly Zoo, so ... and they talk about a math and science fair. Evidently the Big Red Keno's helped that some, too, so I think it ... those may not be city but one was a university and one were people that had ... have ... that has ... that have problems with the amount of food that they can get for their families, so I stand strongly for the support of the Kristensen amendment. I think the ... I think the noose is too tight that the Revenue Committee has thrown out there and I hope all of you sense that. Thank you.

SENATOR VRTISKA: Thank you, Senator Robinson. Senator Will.

SENATOR WILL: Thank you, Mr. President, Senator Vrtiska, the members of ;he body. I rise again for the final time in support of the Kristensen amendment. I kind of wanted to follow up on Senator Landis' comments. I think he's absolutely correct in his analysis in that I think our argument has always been, those of us either pro or anti gambling, has been that any receipts that come from gambling ought to go to specific projects and not to the ongoing operations of government. As I indicated in my opening remarks, there is a gray area. There are bodies of government I think that ... that sometimes blur the line, cross the line and, in effect, we allow them to do so, to use them, use these receipts from gambling for ongoing operations.. But the fact is these receipts ought to be used for specific projects for special purposes and if we do adopt the Kristensen amendment I think that in the future there should be guidelines passed that indicate that there should be more stringent ... more stringent limits on the receipts from gambling. So, with that, it's interesting that ....

SENATOR VRTISKA: (Gavel.)

SENATOR WILL: Thank you, Senator Vrtiska.

SENATOR VRTISKA: Would you keep the noise down just a little bit so we can hear the speaker? Thank you.

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SENATOR WILL: Thank you. And I agree with ... it's interesting that Senator Landis and I almost always vote on the opposite side of gambling issues, but here at least we agree on the philosophy of where the receipts should go and, because of that, I would ... I would ask the body to adopt the Kristensen amendment. This is something that I've gone through an evolution of thought on; that initially I thought that these are probably always being used for General Fund purposes by the local subdivisions, but the fact is I don't think they should be. I think we ought to make that clear and I think the first step in doing that is to take these funds out of the restricted fund category in the bill and adopt the Kristensen amendment and then, subsequently, perhaps even in this bill on Select File, adopt some guidelines as to how these funds are used beyond the constitutional requirement of community betterment or public purpose. jo, with that, I would ask for your support of the Kristensen amendment.

SENATOR VRTISKA: Thank you, Senator Will. Senator Janssen.

SENATOR JANSSEN: Thank you, Mr. President, members of the Legislature. I don't believe that ... I think we're ... we're worried about something that isn't going to happen. I don't think anything you can do, any promotion of keno at the fullest will ever, will ever bring it back over what it was when it began. I ... people just are not playing keno anymore. I ... I believe it's going to be a dying breed, if you want to say. And as far as community betterment goes, what's the difference? If you fix the roof on an auditorium that's community betterment, I would say, and if you didn't have those keno funds to work with, what would you use? You'd use General Fund tax dollars. So what in the world is the difference? I can't see any difference and I am going to be supporting the Kristensen amendment.

SENATOR VRTISKA: Thank you, Senator Janssen. There are no other lights. Senator Kristensen, you are allowed to close.

SPEAKER KRISTENSEN: Mr. President, I'd ask for a call of the house.

SENATOR VRTISKA: Request for the call of the house. All those in favor vote aye; those opposed vote nay. Record.

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ASSISTANT CLERK: 27 ayes, 0 nays to go under call, Mr. President.

SENATOR VRTISKA: The house is under call. All unauthorized persons please leave the floor. All senators return to their seats. The house is under call. Senator Kristensen.

SPEAKER KRISTENSEN: Yes, Mr. President, just to speed up the process, I'd like to start my closing at this point and, as members come in, and not take up that extra time if I could.

SENATOR VRTISKA: Okay, you may ... you may start your close.

SPEAKER KRISTENSEN: Thank you. Mr. President, members of the Legislature, I appreciate the opportunity to do this amendment. As you've heard in a fairly succinct fashion here, you have Revenue Committee that's got a little division into it, but what this amendment is about is the philosophic discussion of what should we use keno funds. The constitution of the state says that we can authorize these...these kenos and that the proceeds shall be used solely for charitable or community betterment purposes and so on. The fear here is that with those lottery or those keno funds placed under this lid limitation is that you're going to have come of them, by the restrictions particularly on the new kenos that would come in, that they're going to be treated as tax revenue. In other words, they're going to be in the restricted funds and, in effect, what happens is -you have a two-tier system. So we're going to have some keno funds that aren't going to be counted, some that ... that are. But the bottom... the bottom philosophic line here is this. We have adopted a policy that the people voted on in this state that we were going to use those funds for one-time purposes and not channel them in for possible use or to use for general tax revenues. If you place the lid limitations in, these funds, if they're counted as restricted funds, could be used for those and may have to in certain circumstances be used for that. And, because it's an unpredictable nature of those revenues, the beat public policy is to continue to keep them there for those one-time projects. Don't make them the restricted funds. The Revenue Committee has done this. on one hand, you've got the Governor, who I think probably says, as I ... way I read the

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original bill, we're going to lock all those funds down; we're going to put an absolute lid on all of them. The Revenue Committee realizes that there are some good beneficial uses for some of those things, one-time projects, and that you probably don't want to funnel them all in and make them have to make up some -General Funds, particularly if you're going to be under a lid limitation. So what the Revenue Committee did was a very good thing, to a certain extent, is they tried to do a little of both and they tried to ... to do that so they made the distinction between new, new kenos, for the fear that people would start up those new keno operations and perhaps try to get around the lid. That's to their benefit, but it violates and It sets up a two-tier system here that I don't think is ... is good, and you shouldn't use those or be forced to use those in General Fund operations. I would hope that with this amendment we strike out those provisions for the new lottery; we take the keno funds out of the restricted fund definition. That's what the amendment does. It would restore and maintain our historic position to use those for one-time operations or one-time funds, special projects, community betterment, and we wouldn't force communities to be in the box where they may have to use those where, if they have increases, you'd have to require some decreases in tax, or the other would happen as well. But some of those .%ould have to be...

SENATOR VRTISKA: One minute.

SPEAKER KRISTENSEN: ... treated as tax revenue. So I think that the discussion has been good. It's a philosophic discussion. The philosophic issue is do you want to maintain our ... our fundamental public policy that we're going to use keno funds for community betterment, one-time funds and special projects, or you going to require them, through the use of this, for some of those proceeds to have to be channeled in to the general operations of government, which is not a good public policy which will, down the line for some communities, create a real burden? Because you'll have one group of communities out there who will be using keno for betterment and special funds and then you're going to have these other ones who are going to have them as restricted funds. It's not a good public policy to have those two different treatments at the same time. I hope that you adopt the amendment. In the words of Senator Coordsen,

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wise sage that he is, it's a change in the bill but it's not a big one and it probably won't hurt it.

SENATOR VRTISKA: Time. You've heard the close. The question is, shall the Kristensen amendment be adopted to the committee amendments? All those in favor signify by voting aye; those opposed nay. Have you all voted? Record, Mr. Clerk.

CLERK: 32 ayes, 7 nays, Mr. President, on the adoption of Senator Kristensen's amendment.

SENATOR VRTISKA: The Kristensen amendment is adopted. Next item. Do you have items for the record?

CLERK: Mr. President, just one. Senator Crosby would like to print amendments to (LB) 1129. (See pages 931-32 of the Legislative Journal.)

SENATOR VRTISKA: I raise the call.

CLERK: I have nothing further pending to the committee amendments, Mr. President.

SENATOR VRTISKA: Any further debate on the committee amendments? If not, Senator Wickersham to close.

SENATOR WICKERSHAM: (Laugh) After that last vote I'm tempted to waive closing. If you ... if you talk, you tray talk yourself into a hole. The ... but, briefly, the committee amendment becomes the bill. It is a ... an extension of the LB 299 limitations on local governments, for the most part restricted to a 2.5 percent growth in local expenditures with a local option to increase those expenditures by 1 percent with a 75 percent vote of the local board. I think that is the important component of the proposal, is that it is a continuation of the limitations on spending for local political subdivisions. This rides along underneath the levy limitations of 1114. It is ...

SENATOR COORDSEN: Could I have a minute of your closing (inaudible).

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SENATOR WICKERSHAM: oh, okay. Okay. It is an attempt to assure the citizens of the state that if there are increases in valuation in their individual political subdivisions, that those increases in valuations do not translate into additional spending, at least not spending that they have not specifically authorized by the escape valve that's in the amendment, and that is for either special elections or, in the case of miscellaneous political subdivisions, the possibility of a town ... of a town hall type meeting. I think it is an appropriate expression of policy for us as a continuation of our efforts to reduce our reliance on property taxes and I would yield the balance of the closing time to Senator Coordsen.

SENATOR VRTISKA: Senator Coordsen, you have ...

SENATOR COORDSEN: Oh, thank you. Only...

SENATOR VRTISKA: ...almost three minutes.

SENATOR COORDSEN: ... only to urge the body to adopt the committee amendments, but more specifically to thank Senator Kristensen for the one and only time tie's ever listened to me. Thank you, Senator Kristensen.

SENATOR VRTISKA: Thank you, Senator Coordsen. The question is, shall the committee amendments be adopted to LB 989? Those in favor vote aye, opposed vote nay. Have you all voted? Mr. Clerk, record.

CLERK: 40 ayes, 0 nays on adoption of committee amendments, Mr. President.

SENATOR VRTISKA: Thank you, Mr. Clerk. LB 8...989 advances to E & R Initial. That was the committee amendments. I'm sorry. The committee amendments advanced, but do you have any further discussion on the bill? if not, Senator Coordsen, you're recognized to close. Oh, we have a light. Senator Landis. I'm sorry.

SENATOR LANDIS: (Laugh) This bill came out of committee seven to one. Guess who the one was. I supported the lid the last time around in the transition from the 1114 work so that

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replacement money, like the money that came through with 806, would be seen as in the context of replacing property tax dollars. I wanted to make sure, with the use of the lid, that new monies that came In replaced property tax dollars rather than were spent as new spending, so I voted for a lid the last time around. I haven't done that In the past, but I did this last time around. (LB) 989 in not the extension of the property tax package of the Revenue Committee over the last two years. It Is the Governor's agenda. It's a political agenda. It's an anti-spending agenda. It's the normal reason for a lid. But since we're back to the traditional reasons for a lid, I'm back to being the traditional opponent that I am here. And people who have over time on thin floor in education, in public health, in ... in the operation of their court system and their judges and everything else who expound local control have a moment of truth here because this is the nemesis of local control. I regard it as a gesture of my faith in local political subdivisions that I choose to be, I assume, one of the very few people who will vote against this bill. However, what I want to make the point of, and that is that 898 (sic) is not an outgrowth of the historical Revenue Committee's work in property taxes. It is an independent piece brought by the Governor towards the norm ... the normal reason that lid bills have been offered for the last numbers of years and that means that we're in a different context as far as I'm concerned. And the reason that I supported the lids that have been recently enacted is no longer present and I return to my skepticism of our shackling local political subdivisions and their leaders in how they attend to local governments' business. I oppose 989.

SENATOR VRTISKA: Thank you, Senator Landis. There are no further lights. Senator Coordsen to close.

SENATOR COORDSEN: I know that wasn't a gauntlet thrown, but in my perception, from my point of view, 989 is not totally the Governor's bill. It's an extension to some degree of concerns that I had and that we argued out in Revenue Committee with the past Chairman and other members over ... over time. You may remember that we had a bill that we are in the last year of the implement of it being a viable statute, and that was 299, which did place very restrictive lids upon local government in anticipation of what would happen when the levy limits of 1114

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came into place. (LB) 989 provides not an extension of 299 but an extension of the idea and the requirement of local governments to continue to be modest in their approach to how they provide service, to continue to be modest in their uses of the tax resources that they collect from the citizens of their unit of government through property taxes. So I do view it as an extension of all of the series of things that we have been done, albeit an extension ... an idea that existed only briefly in a little bit different form as 299, which, quite frankly, does apply to all units of local government as we speak. With that, I would ask for the advancement to E & R Initial of LB 989.

SENATOR VRTISKA: Thank you, Senator Coordsen. The issue then is, shall LB 989 advance to E & R Initial? All those in favor vote aye; those opposed vote nay. Record vote has been requested. Have you all voted? Record, Mr. Clerk.

CLERK: (Read record vote. See page 933 of the Legislative Journal.) 36 ayes, 4 nays on the advancement, Mr. President.

SENATOR VRTISKA: Thank you, Mr. Clerk. The bill advances to E & R Initial. We'll now take up LB 1100. Senator Lynch.

CLERK: Mr. President, 1100 by Senator Lynch and others. (Read title.) The bill was introduced on January 12 of this year, referred to the Appropriations Committee. The bill was advanced to General File. There are committee amendments.

SENATOR VRTISKA: Senator Lynch to open.

SENATOR LYNCH: Mr. Chairman and members, this is, as far as I'm concerned, it might be not as romantic to some of the rest of you as it is to me, but when we start to take care of buildings that are falling down it makes a lot of sense to me. What LB 1100 does, it addresses the deferred maintenance, repair and renovation of state buildings and University of Nebraska and state colleges' campuses. Many buildings needed to be brought compliance with the Americans With Disabilities Act, in addition to the basic repairs to meet the health, safety and fire code needs. Also, present usage of buildings dictate programmatic adaptations, which is a fancy word for it can change in a year or two, but the...the renovation and, of

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