Our Opinion

District 47 Sen. Ken Schilz was in town last Friday to shed some light on his multi-year battle to bring Sidney’s local option sales tax issue to light in the state legislature. With hearings on his current bill closed, the wait is on to see if it will emerge from committee.

That might be a feat too great for LB967 to overcome, as the bill carries with it a fiscal note. Due to state budgeting woes created by the down national economy, Schilz has not been optimistic of bills with fiscal notes coming forth from committee.

The reason LB967 carries a fiscal note is because it would allow for the creation of a fund that municipalities across the state could draw from, should more than 10 percent of a given year’s worth of local option sales tax get refunded to the state to pay for its business incentive programs.

Earlier legislation introduced a session ago by the then-newly elected senator failed to make it to the legislature floor. It called for opt-out language that would give Nebraska cities the option to participate in the state incentive program.

City Manager Gary Person has – for years now – been barking at the state to stop taking so much money from Sidney without much warning. The state gives the city a 30-day notice of tax refunds because that’s how it was set up when the incentive act passed. City officials in multiple towns have agreed that the 30-day notice makes it difficult to plan city budgets because they never know how much sales tax the towns will lose.

New legislation has made it possible for the window of notification to be extended to one year, but that doesn’t affect businesses that have filed for refunds when the old legislation was in place. As you can see, that will begin to create quite a mess before every refund is dealt with under the newer incentive act.

Paperwork mess aside, the current situation has left Sidney looking for alternatives to fund its city budget, and in particular its streets projects. The loss of local option sales tax dollars led to the creation of two occupation taxes – lodging and food service – that have generated several thousand dollars in the short time since they’ve been instituted. By the time the fiscal year is complete in September, the city will be one-month shy of a year’s worth of collection. However, those numbers will give city officials a clear picture of how much revenue can be generated by those taxes.

Sidney was fortunate to have such successful industries – and a good number of businesses in each – upon which to tax. That’s not true for other communities also struggling with the same tax issue, such as Bridgeport.

The fact is that this problem is spreading, or it was already a problem that didn’t seem quite as large until tax revenues fell, thanks to an ailing economy. We have a senator that is doing what he can to educate his fellow senators on the issue, and a city manager who will not let this issue die.

Schilz promised during his forum stop in Sidney that if this bill fails to come out of committee, he will prioritize his next tax bill because the issue is that important.

Recent weather troubles assisting street decay have only helped increase the need to have these tax dollars that were voted on by local people for local use in the budget. Person has said on numerous occasions the state shouldn’t be able to take our dollars away from us like this. It violates the voters’ rights, in his opinion.

It has been a long battle, and it seems there is more turbulence on the horizon. Schilz is confident he can find some way to correct the situation. We salute him for his effort, and urge all readers to take an active role in our government by backing Schilz with the voice of the public, regardless of your stance on the issue.

It’s all about “we the people,” isn’t it? No matter how you stand on this issue, it is about your tax dollars. How do you want them spent?