Legislature moving on roads, prisons, Offutt levee

Nebraska Legislature debates bonding for water projects (Photo by Fred Knapp, NET News)
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March 7, 2016 - 5:42pm

The Nebraska Legislature is moving closer to major decisions affecting roads, prisons, water projects and property taxes. But some important questions remain.


At the beginning of the year, Gov. Pete Ricketts endorsed taking up to $150 million from the state’s cash reserve for an "infrastructure bank" to speed up expressway construction and repair county roads and bridges.

Monday, the Appropriations Committee advanced a bill that would funnel $50 million from the cash reserve to roads. A separate bill would spend $27 million to add 148 additional beds to the Lincoln Community Correctional Center, a work-release facility, and another $14 million for levees to protect Offutt Air Force base along the Missouri River in Bellevue, where lawmakers hope the military will decide to replace the aging runway.

Appropriations Committee Chairman Sen. Heath Mello said the items endorsed are not ongoing spending. "We put a primary focus on one-time appropriations for infrastructure. (A) One-time appropriation to an infrastructure bank; (a) one-time appropriation to prison construction for community correction beds, and a one-time appropriation for the Offutt levee," Mello said.

The proposals now move to the full Legislature for debate.

Meanwhile, the Legislature’s Revenue Committee continues to work on a rewrite of Ricketts’ plan relieve property taxes. The governor originally proposed limiting tax valuation increases on agricultural land to a statewide average of 3 percent a year.

Critics said that would not provide enough help to farmers and ranchers who have seen double-digit increases in their property taxes in recent years. In some parts of the state, if valuation increases are held down, local governments could simply increase the levy and bring in the same amount of money.

Instead, the Revenue Committee is considering a proposal to add another two or three years’ worth of "comparable sales" to the information that county assessors would consider when setting the value of ag land for tax purposes. The idea is that would smooth out valuation increases, by averaging years when sale prices were increasing more slowly, or decreasing, with years when they were spiking.

However, Sen. Paul Schumacher is skeptical how much good that "smoothing" would accomplish. "Certainly there’d be an uneven distribution of whatever benefits there are. But it would not address the bulk of the problem in the bulk of the districts," Schumacher said.

The proposal would add an estimated $30 million to $47 million a year to spending required by the state’s school aid formula to help districts that would lose property tax dollars. Schumacher said that money would probably have to come from sales or income taxes, or the cash reserve.

But Schumacher said even those who benefit might not be satisfied. "There’d be some areas where you might see a bit of a benefit at the ag level for the first couple of years, because you’re extending the base out for two years, but then it’ll level off, so it’d be temporary and probably unsatisfactory at best," he predicted.

Schumacher said those areas that would benefit would likely be places on the edge of cities, where the property tax burden could be shifted onto homeowners or businesses, or where the loss of agricultural land value could qualify the district for more state school aid.

However he added farmers and ranchers in more rural parts of the state might not see any relief at all. "In the agricultural areas that do not have much for urban population, you would either be forced to cut some services or raise the levy, because they would not probably qualify for more state aid to education," he said.

Another idea for holding down property taxes involves limiting the budgets of community colleges. Revenue Committee Chairman Sen. Mike Gloor said he would discuss the ideas with Ricketts before the committee meets again.

Meanwhile in legislative debate Monday, advocates of allowing the state’s natural resources districts borrow money to finance water projects gave up for the year.

Omaha Sen. Rick Kolowski sponsored the proposal. But it ran into criticism from senators who said it would increase property taxes at a time when especially rural taxpayers are asking for relief. Kolowski said he did not have enough votes to break a filibuster against the bill and asked that it be pulled from consideration for the rest of the year.

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