Payments for irrigators in three irrigation districts were due to be paid at the beginning of this month, but were not paid because of uncertainty caused by a lawsuit filed to challenge the constitutionality of a property tax mechanism in LB701. This has certainly, and understandably, got many people upset and worried about when they are going to be paid for the water they did not use according to their agreement with the NRDs. Irrigators have made business arrangements based on their expected payment for giving up water and worry about the impact on their financial obligations due to an extended delay. This unexpected delay of payment has created an urgent situation that many people, including myself, are working to resolve as quickly as possible.

I have appreciated talking to many of you about alternatives and possible options to resolve the problem. Many of you would like the state to just pay the bill and make the problem go away. Some think that the governor and the Legislature should convene a special session to solve the problem. After discussions with many state leaders, I have currently seen no support for these options for what I believe to be the same reason we are in this situation; no one wants to complicate the issue further while a constitutional challenge is hanging in the air.

Another idea is that the NRDs issue district warrants to either the State Treasurer or the Nebraska Investment Council. If the lawsuit ends favorably for the NRDs, they could pay off the warrants with their bonding authority. This is still dependent on the outcome of the lawsuit. If portions of LB 701 were struck down the state may have to bail the NRDs out. This may be what some want, but this might have unexpected consequences, which leads me to my next point.

Many of you want the state to pay for everything, but I would also like to give a gentle reminder from last session. If you want the state to pay the tab for future buyouts to irrigators for surface water not being diverted, the state is under no obligation to pay for it; they can regulate it without lease payments under the law. Last session, there was a group of senators who discovered this reality and were beginning to push for such an approach, but we were able to convince them that the economic impact of not purchasing the water could be devastating to certain communities and the area. LB701 allowed the Republican NRDs to raise the funds necessary to lease from irrigators, and at least, lessen the negative economic impact of not producing, and it did it with local accountability.

Though I believe that LB701 will withstand the constitutional challenge by Friends of the River, if it should fall, what the basin actually gets might not be what some wished for it to get. We will most likely see a large increase in regulation from the state on both ground and surface water. It might come in the form similar to what Colorado has done, shutting off all irrigation, ground and surface, within a certain distance from the stream. On the other hand, we might be stuck with decreased allocations that are unmanageable for irrigated production.

Either way, this would most likely lead to a downturn in the economy of our area. The reality is that we are not a political powerhouse, which can make the state do what we want and still not pay for it in the end, with increased regulation.

Bottom line, Friends of the River could have chosen to file later honoring those contracted agreements so that bonds could be issued and irrigators could be paid, avoiding the negative impact, but they chose not to. Instead, they chose to put the livelihood of many in the basin up in the air. The way I see it, that is not very "friendly." If they wanted to be friendly to the Republican River Basin, they would quickly drop their lawsuit.

As always, if you have questions or concerns, do not hesitate to contact me.