McCOOK, Nebraska -- Area business and community leaders expressed their concerns for Gov. Dave Heineman's proposed tax code changes during a Chamber of Commerce legislative conference call with Sen. Mark Christensen this morning.
Sen. Christensen said he believed the agriculture industry was finally waking up to the negative impact the proposed tax reform would have on the industry. Terri Shipshock, the Community Hospital Health Foundation Executive Director, replied that the hospital industry was as well.
Sen. Christensen said the changes would force farmers to pay sales tax in addition to the personal property tax they are already paying on farm equipment and said the ag industry was not going to be able to successfully fight the changes on their own.
Shipshock said she believed the healthcare industry would be partnering with the ag industry to fight the changes. Shipshock said a refurbished $640,000 piece of cancer treatment equipment would demand $42,000 in sales tax under the proposed tax changes, an increase that would directly eliminate funds that hospitals use to invest in their future and expansion.
McCook Planning Commission member and local farmer Dale Dueland said he didn't mind paying his fair share to support Nebraska, but he estimated the tax changes would result in his tax responsibility tripling.
Lt. Gov. Rick Sheehy told McCook area leaders last week that removing only half of the sales tax exemptions in place would have a huge impact, alluding that not all industries would be effected. According to Sen. Christensen the potential sales tax revenue from agriculture and service industries such as the hospital, would be too much for them to remain exempt. Sen. Christensen said he didn't believe the numbers for the Governor's tax reform proposal added up without them and reiterated that it was going to take several industries working together to fight the changes.
Sen. Christensen introduced 18 bills this legislative session and recapped several of them during the conference call.
"LB 185 transfers $40 million from cash reserves to get water projects in Lincoln County built," said Christensen. Sen. Christensen said the bill did spur a very candid conversation between him and Gov. Dave Heineman, but he believed both of them were in agreement that if something wasn't done the situation could have a severe impact on irrigators in 2013 and almost a complete shutoff in 2014.
Sen. Christensen said the Governor voiced frustration with the number of lawsuits stemming from irrigation recently, lawsuits that Christensen says the Department of Natural Resources is partially to blame for. Christensen explained that the state department was setting policy that prevented surface water irrigation but allowed ground water irrigators to continue, in essence pitting the two against each other and resulting in lawsuits.
"Something needs to be done to avoid shutting off the economy in Southwest Nebraska," said Christensen, adding that it is a difficult scenario.
Two other bills introduced by Sen. Christensen, and focusing on irrigation issues, he anticipates will be pulled before becoming law.
LB 353 would restrict the authority of natural resource districts pertaining to a policy being used to force the sale or forfeiture of acreage. Sen. Christensen said the Central Platte NRD was upfront with him that they were doing it to get acres, "I think it is an unjust way of trying to take irrigation rights," said Christensen.
Christensen said the Central Platte NRD was the only resource district he was aware of pursuing the activity and he anticipated an agreement would be reached.
Similarly, Sen. Christensen said he believed an agreement pertaining to LB 186 would likely be reached with resource districts and that bill also pulled. LB 186 would restrict the authority of natural resource districts specifically to prevent them from requiring an irrigation water right to apply manure to land.