Tax breaks for extremely blighted areas back on track; Beatrice Six payment bill advances

Speaker Jim Scheer in debate Thursday (Photo by Fred Knapp, NET News)
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April 4, 2019 - 5:06pm

A proposed constitutional amendment extending property tax breaks for extremely blighted areas advanced in the Legislature Thursday. So did permission for counties to raise sales taxes to pay for legal judgements, like a $28 million payment for the so-called Beatrice Six.

Sen. Justin Wayne’s proposed constitutional amendment deals with tax increment financing, or TIF. That’s a program that allows developers to keep the increased property taxes they would otherwise have to pay, if they improve a property.  That helps offset the costs of that development for a number of years. Wayne wants to expand that number of years from the current 15 to 20 in extremely blighted areas, defined as having twice the statewide unemployment rate, and at least 20 percent of residents with incomes below the federal poverty line – about $21,000 for a family of three.

Wayne said the proposal would encourage development of impoverished parts of north Omaha in his district, along with certain areas in Thurston County, Scottsbluff, Lincoln and Grand Island.

But Sen. Mike Groene said that’s not how the current TIF program, for blighted and substandard areas, is being used. Instead, he said, developers are using it for new housing developments on former agricultural land.

“They’re outside of bigger communities -- developers are going out there in the cornfields and building suburbs -- brand new houses in cornfields. It actually hurts the bigger city. Because out there they don’t have the development costs. It’s an open, wide-open field.  And these little communities are grasping onto these commuters and building suburbs with TIF. It has nothing to do with blighted or substandard” property, Groene said.

Last week, Sen. Jim Scheer questioned whether Wayne’s proposal to extend the time developers could use TIF would actually help his district. But Scheer said his wife found some history over the weekend that showed the Legislature did the same thing in the 1960s to let his hometown of Norfolk build a levee far higher and wider than that recommended by the Army Corps of Engineers.

“Three weeks ago when Norfolk was flooding, that obese flood control dyke, and the depth, maintained the water from coming in to Norfolk by all of eight inches. If they had not built that to the size and scope that they did, literally Norfolk would be under water,” Scheer said.

Scheer said that affected his opinion of Wayne’s proposal. “Do I think that this is going to be the solution for north Omaha? I don’t know. Could I be one of those naysayers that said ‘Norfolk you don’t need anything that big?’ Probably would have been,” he added. “But looking back historically, Norfolk knew what they needed. They were fortunate that the Legislature agreed with them. And if they hadn’t, Norfolk would be facing immense devastation today.”

“So I don’t know if this will fix north Omaha or if it will fix other areas in the state,” Scheer said. “But if they think it will, I think I have the obligation to let ‘em try.”

Wayne asked senators to give his proposal a chance. “Let’s send this to the vote of the people and give our municipalities the opportunity to help those extremely blighted areas with a tool that I think can change their future, and can change north Omaha,” he said.

The renewed debate followed a blowup a week ago, when time ran out after Wayne said he’d been promised a vote, causing him to threaten to derail bills favored by opponents, including property tax relief for farmers and ranchers. Wayne said the prospect of his proposal advancing lessened his concerns. “The issue I had previously was the process in which I felt betrayed. And I’ve talked to each individual about this and we’ve worked some things out – maybe not completely, but I feel like we’re moving in the right direction again – that we can sit down and have a conversation, and discuss big issues,” he said.

The Legislature gave first round approval to the proposal on a vote of 40-0. Groene promised to try again to narrow the proposal on the next round of debate.

Also Thursday, senators debated a proposal to allow counties to impose a temporary sales tax to pay for court judgements. Sen. Myron Dorn of Adams said he introduced the proposal for the county board in Gage County, to help pay the judgement for the so-called Beatrice Six. That’s a group of six people who were wrongfully convicted and imprisoned for a cumulative total of more than 70 years for a 1985 rape and murder in Beatrice.

Dorn said the half-cent sales tax increase would supplement a property tax increase and help pay the settlement in about six or six and a half years. “I ask you to help out Gage County, or any other county that would find themselves in a similar situation, with a very limited sales tax increase, for a very limited purpose, and a very limited duration of time,” he said.

A former Gage County deputy sheriff and special deputy used various techniques, including the threat of the death penalty, to get five of the six to confess to a crime they didn’t commit. Sen. Ernie Chambers argued the case shows how the death penalty corrupts the justice system. “This is one of the worst cases in the history of this country where six people at one fell swoop – all innocent, all innocent -- five of them had a guilty plea extorted from them in exchange for having the threat of the state taking their life removed,” Chambers said.

Senators gave Dorn’s bill first round approval on a vote of 40-1.

 

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