Debate Transcripts

LB 1059 (1990)

Vote to Override Veto

April 9, 1990

PRESIDENT: The veto on LB 1126 is overridden. The one you have all been waiting for, LB 1059.

CLERK: Mr. President, Senator Withem would move that LB 1059 become law notwithstanding the objections of the Governor.

PRESIDENT: Senator Withem, please.

SENATOR WITHEM: Thank you for the editorial introduction there, Mr. President. I do appreciate that. I will be opening somewhat briefly. I don't think there is a lot that hasn't been said about 1059. Then Senator Moore will be closing and if there is anybody obviously that wants to speak in the middle, they certainly will be able to. Just going to hit on a few points that I think you ought to remember. If there is anybody in here that is undecided on which button they're going to push, just a few things to think about before you push that button. First question is, what's going to happen if LB 1059 does not pass? No secret, we're on the 60th day, no secret, there is no other school finance property tax measure out there. What's going to happen if 1059 doesn't get overridden? Number one, and most importantly I think, we're going to continue the inequitable educational funding system we have in our state. if students are lucky enough to live in districts that have a lot of property, they're going to have lots more opportunities available to them than are students that live in districts

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without property. If a taxpayer happens to have property in a district that doesn't have a lot of property, their taxes are going to be much, much higher than another individual. What's going to happen to our property tax rate? The aggregate property tax rate in our state will go up at about 16 percent, 16 percent this fall when people start figuring up long about the first of August, first of September. when people start figuring up what their property taxes will be. Subdivisions of government are going to be making decisions about spending without any sort of control over what level of spending that they will have, and the courts will act. The courts will be in a position of acting on whether or not we have a fair system and you've all heard the arguments about. how similar systems in similar states have been declared unconstitutional. In the Governor's veto message she delivered a number of concerns that she has with 1059 which is an appropriate thing to do in a veto message. I'd just like to address two or three of those. I'm not going to go into the full,. full nine yards on that. Number one, she indicated that the tax concept in the bill is a new one like we slipped something in at the last minute. March 21 last year I met with the Governor and with Cynthia Milligan and explained the interim proposal of the School Finance. Review Commission, contained a proposal to raise the state funding to 45 percent to be funded with 20 percent of the state income tax and probably a one cent sales tax or some other source that we may come up with, so it wasn't anything new. The Governor says it's not guaranteed property tax. relief, it is guaranteed property tax relief. It is guaranteed. It was guaranteed by the Schellpeper amendment, number one, and by the Conway amendment, number two, on Select File. Number three, just to make sure you understand, in her veto message she makes reference to some school districts having a 19 percent lid. That is...I don't know where in the world that came from, that's wrong, and I called Andy Cunningham in Policy Research Office when I saw that and said, you folks probably want to correct this because this is so grossly wrong, you're going to be embarrassed by it, and it is, it is totally incorrect. Most school districts in this state, I think there will be six school districts in the state that will be Able to go as high as 6.5 percent, then with the extra I percent, 7.5 percent. Most school districts in the state are going to be at the 4 percent level. Most school districts in the state do not have a growth in their enrollment. Most school districts in the state do not have a growth in their special education. Most school districts do not have the other factors. They do not have multi-year

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contracts, maybe a dozen school districts in the state that have the multi-year contracts. So the budget limitation that is contained in 1059 does have some legitimate exceptions in it for those school districts that have unique problems, but those are very, very unique. Most school districts in the state are going to be in the 4 to 5 percent category and that's factually true. Concerns about other tax matters not addressed in 1059, we've all talked about those. We as a Legislature can address what you do about renter credit, what you do about the way you assess property tax, how you deal with personal property tax. The bill has had as much attention, as much analysis as any piece of legislation in my memory. I don't remember when the state first went to the sales and income tax method-back in the 1960s, the degree of scrutiny that that bill got, but anything since then this bill has had the scrutiny and it is, I think, a good, good piece of legislation. It moves the state forward. It moves the state from being the next to the last in the terms of state support for education up to the middle. We aren't going to be any leaders, but we're going to be up to the middle. It deals with the inequities that exist. You're not going to see the types of gross, gross, gross inequities where an individual that owns property, the same type of property paying four or five, six times as much as another individual the same type of property, just based simply on the school district in which they live. When this bill passes you're going to get criticism. You're also going to get the thanks from an awful lot of people in the state that realize it's the right thing to do. There is no other alternative before the Legislature at this point. This is what you have. You either vote to override the veto and put this in place or you vote to sustain the status quo. I know there is some people that have some lights on that are going to be speaking on this bill against it. I want you to listen to their comments. I want you to analyze what they have to say and if they can offer you something that is going to be better to take back to the citizens after this session is over than what 1059 is, they can convince you that the status quo is better than 1059, maybe you ought to vote against it, but I don't see any way that they can say that the status quo is a preferable system to what we have in 1059. Could 1059 be a better ':)ill? Sure, it could. Anything we've overridden today, anything we've passed this session could be better and we as legislators ought to commit ourselves to improving all of the work that we've done and I commit myself to improve upon 1059, but it's the option that's there. It's the option that stands between you and the 16.5 percent increase in property tax. It's the item that

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stands between you and the court action. It's the item that stands between you and a type of system where some kids have over $6,000 spent on their education, some students have less than $3,000 spent on their education. It's the right thing to do. I think most of know that it's the right thing to do and I urge you to override the veto, do not sustain the veto, override the veto. Thank you.

PRESIDENT: Thank you. Senator Lamb, please, followed by Senator Rod Johnson.

SENATOR LAMB: Mr. President and members, this has been discussed very much but I'll just like to, for the record, make some points.. In the first place, we've heard that there is going to be a 16.5 percent increase if this bill does not pass in property tax. You know, I don't believe that for a minute. One of the criticisms of LB 84 that was passed last year was that the subdivisions of government took advantage of that reduction in property tax and thus raised their spending limits. I think the opposite is going to happen if we don't pass this bill. There will not be a 16.5 percent increase in property tax because those subdivisions out there will say, look, we cannot increase our spending that much because the public will not stand for it. They will not increase that much because they know they can't get away with it. That is a plain and simple fact. Now, as to the ... whether or not the bill is equitable. It does some good things. I've always admitted that. But it is not doing enough good things. You know the last state aid bill we had lasted for 23 years and I don't have a lot of confidence that there is going to be a substantial change in this bill in the near future. And I use the example that I've used before and I'll use again. One of my counties, Blaine County, is practically the school district so it's a good example. In that county 9 percent of the personal income in 1987 went for property taxes compared to the state average of 4.83 percent, way above the state average in the percent of their income that goes for property tax, but what does this bill do for them? Nothing. In fact, it's a negative. If you don't count the hold harmless they would lose 14 percent of their state aid. Now you can't tell me this was an equitable formula when that sort of thing would happen. This is not equitable. I served on that commission, as you know, the School Finance Commission, and the thing that disturbed me is that we were making major changes in that bill or that program right up until the time the Legislature convened. And so I offered 866 which, of course, is

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not an option at this point, to take one more year, one more year to make a better bill out of this bill. I think it could be done. I don't think it will be done if it's passed now. I think it will be done if we wait another year, but that's just the way it is. Now, before I close I just have one question of Senator Moore if he would yield. And that question is this, the lid for the other subdivisions of government is more restrictive than that for the schools. Is there any plan or do you have any plan next year to make this more equitable so that the other subdivisions are not treated unfairly in relation to the way the schools are treated?

SENATOR MOORE: The other subdivision lid- is only a two-year lid, so for that reason they-are different. So my answer to your question is, no, not to my knowledge right now.

SENATOR LAMB: And so it would remain at 4 percent with a 5 percent option for the next two years. And that compares with, of course, a more generous lid for the schools. Thank you very much.

PRESIDENT: Thank you. Senator Rod Johnson please, followed by Senator Schmit. Question has been called. Do I see five hands? I do. The question is, shall debate cease? All those in favor vote aye, opposed nay. We're voting on ceasing debate. Record, Mr. Clerk, please.

CLERK: 25 ayes, 15 nays to cease debate, Mr. President.

PRESIDENT: Debate has ceased. Senator Withem, did you wish to close? Senator Moore is going to close, excuse me.

SENATOR MOORE: (Mike not turned on immediately.) ... members would please check in as I give my closing, I'd save the time ahead of time.

PRESIDENT: All right. Will you please check in.

SENATOR MOORE: I will go-ahead and begin my closing. Now much has been said about LB 1059 and there's probably been more newsletters written, more press releases, more TV shows, more analysis than any bill in a long, long time and it all comes down to a few people are nervous with good reason about a few unknowns that probably, simply cannot ever, never be answered. You can't take the total risk out of everything. I think that

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the thing about it is there are a lot of things are known. I think Senator Withem went through them rather clearly. What happens to property tax if we don't pass this bill? What happens to our present school finance system if we don't pass this bill? Will we, next year, ever come so close to making a bigger change, and the answer is probably no. That's what is known. Now, I remember back in December and November people would say, well, it's a great idea but it will never pass, something like that, can never pass in an election year. Remember after there was 32 co-sponsors. People said, yeah, but they will never stick. Remember after the hearing the momentum was gone for this bill, it wasn't going to go anywhere, came out of committee 12-2, on to General, on to Select, on to Final Reading. It has been said nothing can stop an idea whose time has come. Ladies and gentlemen, it's your decision on whether or not LB 1059's time has come. I move for the override of the veto.

PRESIDENT: Thank you. The question is, shall the veto on LB 1059 be overridden? All those in favor vote aye, opposed nay. Have you all voted? Record, Mr. Clerk.

CLERK: (Read record vote. See pages 2043-44 of the Legislative Journal.) 32 ayes, 16 nays, Mr. President, on the motion that LB 1059 become law notwithstanding the objections of the Governor.

PRESIDENT: The veto on LB 1059 is overridden. LB 855. Oh, we have an A bill. Excuse me.

CLERK: Mr. President, Senator Withem would move that LB 1059A become law notwithstanding the objections of the Governor.

PRESIDENT: Senator Withem, on the A bill, please.

SENATOR WITHEM: First of all, thank everybody for- the vote, and I mean everybody. The debate on 1059 from the proponents and the opponents is something I think that ought to make everybody proud to be in this Legislature. We took a problem that was troubling the state. We dealt with it. Those who voted against it had very good solid reasons to vote against it, expressed themselves well and we as a body dealt with the problem and I thank...my thanks to everybody. We also need to override the A bill, so I would move to have the A bill overridden.

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