Letter to the Editor

State, NRDs ignoring Nebraska Supreme Court ruling

Tuesday, June 9, 2009

Dear Editor,

There has been a focus, by the elected officials, on making sure there is a way to locally finance projects that help keep Nebraska in compliance with the Republican River Basin agreement with Kansas. Most of this focus has been on placing a tax on each irrigated acre in the Basin. Some argue that if every NRD in the State has the option to collect a tax on irrigated acres, the tax would be legal.

The District Court has said that the tax is illegal because it targets a small group while exempting others who also benefit from the tax.

When the State and Republican River Basin NRDs challenged the District Court ruling to the Nebraska Supreme Court (NSC), there was an NSC ruling on an even more fundamental issue. The NSC said that compact compliance is a state responsibility and that it is not the responsibility of the local communities. The NSC also let stand the District Court ruling that the tax unfairly targeted a small group of people.

In other words, the NSC says that the state is the one responsible for making sure the state is in compliance with the compact. The NSC rejected the idea that it is the responsibility of the NRD. Since that is the NSC ruling, then why are certain politicians insisting that the local community must pay the bill? Why are they arguing that the money the state caused the NRDs to borrow must be repaid? Why are they ignoring the NSC ruling?

The simple answer is money. The state has control but doesn't want to pay. In spite of the NSC ruling, the state continues to say that if the local people do not pay the bill, then there will be significantly less irrigation.

The local irrigators are willing to pay because they don't trust that the state will pay for compliance projects. Hence, both the state and the NRDs seem to prefer to ignore the NSC and find ways to finance the project with local money.

The Nebraska Constitution prohibits the use of property taxes to pay for state projects. The state and the NRDs argue that a tax based on the number of acres of irrigated property that a person owns is not a property tax. Instead, they have labeled it as a tax on an occupation (irrigated farming). However, the label doesn't change what it really is.

Most farmers who irrigate believe that it is preferable to pay, on behalf of the state, what the NSC calls an illegal tax rather than risk losing access to the water. Most farmers fear that the state will choose to sacrifice the economy of the basin rather than contribute the dollars it takes to comply with the various court rulings. So, paying the tax is acceptable to them, even if being taxed this way is illegal.

In the latest brief before the NSC, the state and the NRDs argue that the property tax (that the court already ruled illegal) and the occupation tax are one and the same and that, since they are one and the same, the court can't rule on the "occupation tax" issue. It is kind of a double jeopardy thing, Hence, they say, the tax on irrigated acres should stand, even though its partner (property tax) has already been ruled illegal.

They argue, in other words, that the property tax and the occupation tax are the same and since one half of the equation was already ruled as illegal, the other half can't be discussed because the question about the occupation tax was not asked at the same time as the property tax question. They are saying it is too late to ask it now and the illegal tax should be permitted to be collected. While that may sound convoluted, it is what the state and NRDs are arguing.

The politician's focus on trying to expand the tax on irrigated property to the entire state does not solve the problem nor does it address the court's ruling that compact compliance is a state responsibility.

There is a need to come up with a solution that is legal (does not target only some beneficiaries) and that causes the state to be responsible while still permitting irrigation to continue. It is possible; but so far, the legal solutions are not being discussed.

Steve Smith



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