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Nebraska county wants to keep authority to hike taxes without people’s vote

By   /   September 9, 2015  /   News  /   No Comments

The Lancaster County Board is considering lobbying state lawmakers to amend a law passed earlier this year that requires joint public agencies to get voters’ OK before borrowing money and paying it back through increased taxes.

Before the law went into effect this year, JPAs — legalized by lawmakers in 1999 to encourage cooperation among different governmental entities — could borrow money and repay it with new tax levies. One government entity could lend its taxing authority to the JPA to issue revenue bonds, general obligation bonds and refunding bonds.

Photo courtesy of Flickr

THE WILL OF THE PEOPLE: Lancaster County officials are considering trying to amend a bill that requires a vote of the people before joint public agencies can increase taxes.

Only six JPAs have been created since 1999, three in Lincoln and its home county, Lancaster County, to build an event center, arena and a jail.

The city of Lincoln and University of Nebraska-Lincoln, for example, joined to create the West Haymarket Joint Public Agency, which uses revenue from a new city tax on bars, restaurants, hotels and car rentals to pay off debt for the Pinnacle Bank Arena.

But freshman Sen. Laura Ebke, R-Crete, sponsored the bill to change that, saying JPAs were used as a loophole to get around the voter requirement.

Her bill sailed through the Legislature, passing 48-1, even though it was opposed by the Lancaster County Board and League of Nebraska Municipalities. County Commissioner Deb Schorr said the board opposed the legislation because it successfully used the JPA model to build a new jail.

RELATED: Lawmakers pass bill reining in authority of JPAs to tax

The county’s jail JPA was controversial because in 2008, county voters rejected a plan to borrow $65 million to build a jail, but county commissioners created a JPA with the city to do it, arguing a new jail was crucial and the city helped them get a better financing deal.

The Lincoln Independent Business Association would likely fight any attempt to repeal the new law, which it pushed hard to get passed.

“The voters should have a voice in property tax-supported bonding, including in JPAs,” LIBA executive director Coby Mach said.

The county also built its event center without a vote of the people because it formed a JPA with the Lancaster County Agricultural Society, giving it bonding authority.

Now the county board, which is controlled by Republicans, is considering pushing for changes that would allow an exemption for public buildings such as jails. The JPA law is one of some 20 issues the county may focus on during the next legislative session.

Schorr said the board would want an exemption for public safety type projects, as opposed to an expansion of an event center or arena, for example. Why not allow people to vote?

“People will vote against it,” she said. “Nobody wants to build a jail. Nobody wants more courthouse space, judges’ chambers… people would rather see their money going for potholes.”

However, she’s not sure the JPA bill will make the final cut with the county board.

“I can’t see that one being one of our top three or four,” she said. “Politically, is it worth our time to try and make changes to a bill that passed 49 to 0? That’s a lot of political capital.”

The city and county already use a public building commission to build and lease most public buildings.

“We’re not building anything soon,” Schorr said, “but I think it’s just allowing that flexibility should we need it.”

But LIBA will surely push back, too.

“If you can’t make the case that it’s a good project, or cannot convince voters that you have put together an efficient and worthwhile project and that you are being frugal with taxpayer money, then you get voted down,” Mach said. “If voted down, you should not be able to circumvent a vote of the people. We closed the loopholes that circumvented the people, now it appears a staffer at Lancaster County wants to add a new loophole.”

Updated 11:47 a.m. Wednesday

Deena can be heard on KHAS-AM in Hastings every Wednesday at 7:30 a.m. and 12:45 p.m. and KOIL-AM in Omaha every Thursday at 4:05 p.m.

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Deena formerly served as staff reporter for Watchdog.org.