Lawmakers wrestle with water, tax issues

Lobbyists, senators, tourists and others in the Capitol Rotunda (Photo by Fred Knapp, NET News)
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February 7, 2018 - 5:43pm

Nebraska lawmakers wrestled with water and tax issues Wednesday, while a new poll suggested some perhaps surprising attitudes toward taxes.

The water issue concerns so-called water augmentation projects, where natural resource districts buy irrigated farmland and use the water instead to meet Nebraska’s obligations to send water down the Republican River to Kansas. Sen. Mike Groene of North Platte wants the NRDs to be able to keep using the water for that purpose, but to be able to sell the land, to put it back on the tax rolls and allow it to be used for grazing or dryland farming. He says private ownership would promote better management and provide more revenue to support schools and other local government entities. The bill was supported by Conrad Nelson, vice president of the school board in Wallace, Nebraska. “The water augmentation project known as NCORPE took 11,700 acres out of production in the Wallace School District, which resulted in an 8 percent loss of value to the district. Other taxpayers in the district then are making up the difference on this,” Nelson said.

Tom Schwarz, who farms near Bertrand, Nebraska, opposed the bill. Schwartz said more time is needed to make sure it doesn’t threaten NCORPE’s ability to preserve farmers’ ability to irrigate. “Given the importance of the project to Nebraska’s compliance efforts in protecting the irrigated agricultural economy in the basin, we must be certain that if the land is sold, the legal questions are addressed,” he said.

Among those legal questions are whether, if the land is sold, NCORPE could still pump as much water from below it to Kansas. “The more land you own, the more water you can pump. And that’s really the need that NCORPE sees for owning these acres,” said NCORPE lawyer Don Blankenau.

There is another water augmentation project, Rock Creek, in Dundy County, and Blankenau said it is possible others will be built in future years.

But Steve Mossman, a lawyer for Landowners for a Common Purpose, a group critical of NCORPE, said selling the land would pose no risk to being able to continue to use the water underneath it to satisfy Nebraska’s obligation to Kansas. “There’s this notion out there that what we’re doing is something new and unique. And it’s really not at all. There’s been groundwater that has been allowed to be used somewhere (other) than the overlying land that the Legislature has put in place for many years, withstood court challenges in the Nebraska Supreme Court, and has been upheld to be constitutional,” Mossman said.

The committee took no immediate action on the bill.

Meanwhile, the Revenue Committee heard testimony on a bill aimed at cancelling out what would otherwise be a more than 200 million increase in state taxes, as a result of federal tax changes. The biggest of the changes affecting the state is eliminating the federal personal exemption. Sen. Jim Smith, sponsor of LB1090, the bill to counteract this, explained how it would work. “LB1090 creates Nebraska’s own credit to ensure Nebraska filers continue receiving the same credit amount. Without this adjustment, Nebraska citizens would have more than a $200 million increase in 2018,” he said.

No one testified against the bill. But the Nebraska State Education Association wrote a letter opposing it. The letter said if the bill were not adopted, the additional revenue collected could stave off possible cuts to many state governmental services, from state aid to public schools, to public safety and poverty-related programs. The committee will now decide on advancing the bill to the full legislature.  

And on the eve of a hearing on a bill to increase income, sales, and cigarette taxes to reduce property taxes, the Open Sky Policy Institute released a poll showing support for some of those ideas. The poll of 600 likely Nebraska voters conducted by Washington, D.C.-based TargetSmart showed 78 percent supported raising income taxes on people making more than a million dollars a year, 72 percent supported raising cigarette taxes, and 59 percent supported raising corporate taxes.

Ben Lazarus of TargetSmart said the results surprised him. “In general the state has a reputation for being quite conservative. And, I think in many ways this data set speaks to a kind of more progressive bent when it comes to revenue and taxation than I quite frankly would have expected,” Lazarus said.

But Sarah Curry of the Platte Institute took the results with a grain of salt. “I don’t think it’s surprising. Most people I think when you ask them if they want to raise taxes on somebody else, they’ll say yes,” Curry said. “But if you ask them to raise taxes on themselves, they’ll say no. So it doesn’t surprise me that when we talk about raising the sales tax, or raising user fees and gas tax, people are opposed to that, but then raising the tax on millionaires or corporations, they’re okay with it.”

The poll showed 70 percent opposed to raising the sales tax, and 72 percent against raising user fees, like the gas tax. The Revenue Committee will hold a public hearing on the proposed tax changes Thursday afternoon.



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