Long-Term Savings Plan repeal dropped for NRD property tax authority

A bill to eliminate the state’s Long-Term Savings Plan was scrapped May 18 in favor of a proposal to extend a special property tax authority offered to select natural resources districts.

LB400, introduced by Fremont Sen. Charlie Janssen, was gutted by a Revenue Committee amendment, adopted 34-1, to include provisions of LB528.

Current law allows NRDs in overappropriated or fully appropriated basins to levy an additional property tax of up to 3 cents per $100 of taxable value. Revenues must be used for costs of administering and implementing ground water management activities and integrated management activities under the Nebraska Ground Water Management and Protection Act that exceed the amount budgeted for such activities in fiscal year 2005-06. This taxing authority was provided through FY2011-12.

LB528, introduced by Holdrege Sen. Tom Carlson, would extend the authority for six more years.

Carlson said that, without the extension, NRDs would have to rely solely on occupation taxes to fund water needs. Such a tax would place an undue burden on irrigators, he said.

Ogallala Sen. Ken Schilz supported the bill, saying the 3-cent taxing authority is needed to support dynamic water plans. In order to bring the state into compliance with compacts and agreements, he said, NRDs need proper funding.

Imperial Sen. Mark Christensen opposed the bill on the grounds that it would extend a temporary tax. When the original water policy task force proposed the 3-cent tax authority, he said, the tax was to be phased out.

“I believe the intent of this [tax] was to be temporary funding,” Christensen said. “It was sold to us as a temporary measure.”

Christensen offered an amendment to limit the 3-cent taxing authority to eight fiscal years beginning with the first fiscal year immediately following the imposition of the tax.

While he sponsored legislation in 2007 to extend the taxing authority, Christensen said, the tax should either be made permanent or capped, rather than being continually extended.

Carlson opposed Christensen’s amendment, saying the eight-year cap would have negative consequences for NRDs, which will no longer receive state aid in the upcoming fiscal year.

Lawmakers voted down Christensen’s amendment 4-36 and advanced LB400 on a 35-1 vote.