Fight To Keep Our Tax Dollars Continues

SIDNEY – Seeking to continue to find solutions for communities facing lofty losses of local option sales tax dollars to fund state incentive programs, City Manager Gary Person testified in Lincoln Wednesday during a hearing on District 47 Sen. Ken Schilz’s latest legislative bill on the issue.

“They [the revenue committee] spent three hours on our bill,” Person told The Sidney Sun-Telegraph on Friday. “I had numerous people talk to me before and after the hearing. The committee members truly wanted to have a better understanding on the situation.”

Recently finding further support of fixing what Sidney officials have called a “flawed incentive program,” Schilz said he is “seeing some progress in that the committee now understands there is a problem and that the state’s incentive program could get a black eye if we do not find real solutions.

“We have been negotiating this bill for the entire time that I have been in the legislature,” Schilz said in an e-mail. “This bill is a continuing effort to find solutions for communities such as Sidney, South Sioux City, Tecumseh and Bridgeport, who have seen a hit to their local option sales tax.”

Earlier in the week, following a Sidney City Council meeting, Bridgeport City Administrator Bill Boyer spoke with the Sun-Telegraph, and said the sometimes large losses to the state’s program makes it difficult for his city to plan activities and funding.

The time period for notification of a refund has been a thorn in Person’s side from the start. Person said currently municipalities are given a 30-day notice of refund, which isn’t enough to appropriately plan for refund losses during budget sessions typically held once a year in August.

“The state tax commissioner was listening live, and came to the meeting,” Person said. “He explained the 22-year process that businesses can recapture any dollars.”

Person said the commissioner made it clear to the revenue committee that he cannot give advance notification to communities under current laws.

“We will continue to discuss this issue,” Schilz said. “I do not feel that we will get the bill to the floor. It is still a work in progress.”

One of the main concerns about bill passage is the fiscal note attached to LB967 – the creation of the fund that municipalities could draw from, should the community be required to refund more than 10 percent of a given year’s worth of local option sales tax. One amendment sought to institute a one-time only, one month, 1-percent fee on all sales tax in Nebraska to seed the fund. Person said the amendment found support from those in economic development, and from the League of Municipalities.

“We will continue to work with the City of Sidney to find a way to help these communities find some certainty in their budgeting process,” Schilz said. “I would say that with the way this argument is shaping up, it would be beneficial for communities such as Sidney to explore other possible solutions that do not require legislative action.”

Finding another way other than legislative action may not be a possibility as the problem, Person said, was created by the state.

“It’s a very complicated, flawed system,” Person said. “I’m not giving up on it by any means. It’s just too critical not to do something right now. We definitely came light-years ahead in educating people. It’s still going to be challenging to get through this year.”

Schilz said he will continue to pursue the legislation, and will work to find a vehicle to smooth out the timing of some of the sales tax issues.

Also in hearing at the same time was LB1048 by the Natural Resources Committee. The bill is an omnibus wind legislation, Schilz said.

“This hearing lasted five-and-a-half hours, and had a multitude of testifiers,” he said. “This could be the biggest change in energy policy that the State of Nebraska has seen since the 1930s. It’s truly is landmark legislation.”

According to Schilz, the Natural Resources Committee has heard from many different interests on the issue and is now trying to figure out if the bill does what the state needs to open up to wind energy development.

“I have had many restless nights trying to figure out whether the bill will bring the development to our state and especially rural Nebraska,” Schilz said. “The opportunities are real. There are literally billions of dollars of investment that are in the balance.”

Schilz said if state legislators can craft a bill that balances the needs of public power, developers and landowners, then rural economic development may see its “biggest shot in the arm since irrigation.”

He remained hopeful on Thursday that the bill would reach the legislative floor for discussion and be passed.