County option sales tax for public safety and transportation projects proposed

Counties would have the authority to enact a county sales tax to pay for public safety and transportation projects under a bill heard by the Revenue Committee Jan. 27.

Current law allows counties to enact sales taxes up to 1.5 percent to support public services provided by a public safety commission or agreements executed under the Interlocal Cooperation Act or Joint Public Agency Act. County voters must approve such sales taxes, which cannot be levied in cities with a local option sales tax.

LB106, introduced by Ogallala Sen. Ken Schilz, would extend uses of county sales taxes to include public safety services and transportation infrastructure projects. Counties that receive sales tax approval would be required to develop one-year and three-year plans of proposed capital improvements for public safety and transportation projects.

Schilz was quick to point out that the bill would not create a new tax.

“This is not a new tax; it is a reasonable expansion of what the proceeds could be used for,” he said.

Schilz said only Dakota County has enacted a county sales tax. He said Sheridan County, which is considering funding for law enforcement activities to deal with alcohol sales issues in Whiteclay, and Keith County, with its tourism generated by Lake McConaughy, would benefit from county sales tax.

“This change in legislation would allow Keith County to move forward with much-needed projects that have not been able to receive funding,” Schilz said.

Larry Dix, representing the Nebraska Association of County Officials, testified in support of LB106, saying it would give counties additional tools to provide for public safety and infrastructure. He recommended that the county sales tax be excluded from state tax incentive programs in order to avoid refunds of the revenue generated from the sales tax.

Curtis Smith, executive director of the Nebraska chapter of the Associated General Contractors of America, also spoke in support of the bill. Revenue shortfalls statewide warrant consideration of a funding mechanism like LB106, he said, which would help address transportation needs like the 422 bridges throughout the state that are closed due to lack of maintenance.

The committee took no immediate action on the bill.