Another week has gone by and we are quickly approaching the end of the 2009 session.
Last week I discussed how the Natural Resources Districts planned to use property tax relief to return the property taxes levied under LB 701. This week I would like to discuss what is going on in the Legislature regarding the occupation tax authorized in LB 701, which is currently tied up in the courts.
In short, after working very hard to get a fix for the occupation tax through the Legislature, support for addressing the issue this session has waned. The prevailing attitude in Lincoln is to wait until the courts have decided on the current lawsuit.
After the District Court ruled that the property tax was unconstitutional because language in LB 701 created a closed class, it has been my position that the language used for the occupation tax, which is identical to what was used for the property tax, was now in danger of being struck down by the District Court as well. However, as you know, the Nebraska Supreme Court did not rule on the closed class question regarding the property tax lawsuit, but ruled that the property tax was for a state purpose.
It is my opinion that not addressing the language now is a big mistake, a waste of time and money. This may potentially leave the NRDs with no appropriate tools to address a water short year, or to repay the state the $8.7 million dollars loaned to them last year with LB 1094.
If we run into drought, causing water short years while the occupation tax is in the courts and possibly struck down, we will most likely see large allocation cuts in the basin. The NRDs will have few choices in a water short year because their resources and tools will have been limited, or taken away.
I plan to introduce a fix to the occupation tax in a bill next year. I would change the current language that designates which NRDs are authorized to bond and levy an occupation tax. It would open it up to all NRDs in basins that are fully or over-appropriated. I would also require that to levy an occupation tax, it would take a two-thirds vote of the NRD board.
I believe it is unwise to wait until there is a crisis to attempt legislating good solutions while under pressure. We had a chance this session to ensure the NRDs, whom the state has given the authority to manage groundwater, have the tools necessary to do their job.
I am optimistic that something can be done next year, but it is disappointing that we are putting off something that obviously needs to be addressed.
As always, please do not hesitate to contact me with any comments, question, or concerns.