Lawmaker gets firsthand look at county budget struggle

Wednesday, August 29, 2018
Nebraska Sen. Dan Hughes visited with Red Willow County commissioners in McCook Monday morning.
Connie Jo Discoe/McCook Gazette

McCOOK, Neb. — As Nebraska Sen. Dan Hughes waited for his time slot on the agenda of the Red Willow County commissioners meeting Monday morning, he witnessed commissioners’ struggle to make a new budget balance.

A transfer from the county’s $1.9 million inheritance tax fund would take a bit of the hurt off of a tax levy increase, commissioners figured, and commissioner Steve Downer said, “It doesn’t hurt anything to use the inheritance tax fund when we’re trying to offset increases.”

Later in the morning, as Hughes visited with commissioners about politics, property taxes and prisoners, commission chairman Earl McNutt explained to the senator that the inheritance tax fund in Red Willow County is “a very important budget tool” that commissioners use year after year to help offset tax increases and to fund shortfalls. It’s not stockpiled into a huge account, he said.

Hughes said an inheritance tax fund is okay if it’s saved at a useful level and used to offset taxes.

From time to time, Nebraska lawmakers have wanted to take inheritance taxes away from counties and reroute them into state coffers and then back to counties, or to eliminate inheritance taxes completely.

McNutt has said in the past that counties don’t charge for their services, and have very few avenues for revenue other than taxes like inheritance taxes. He has said he hears people complain about property taxes, but seldom hears complaints about inheritance taxes.

— McNutt explained to Sen. Hughes that the biggest bite in the county’s 2018-19 budget is the self-insurance fund, up from $732,975 to $1,010,500. “We had a bad year, with high claims,” McNutt said. Hughes replied, “There’s nothing you can do to mitigate that … “

— McNutt also said that the county’s valuation dropped by $32 million, mainly because of decreases in the value of dryland and one class of irrigated land. Hughes said he foresees land valuations “coming down even more,” because commodity prices “are not going in the right directions.”

Hughes said farmers have seen “back-to-back phenomenal years. Mother Nature has been very good to us. But this, too, shall pass.”

— Hughes said he had lunch with Gov. Pete Ricketts the other day and they talked about ag land valuation. Hughes said that Ricketts would like to value ag land by its income production, rather than recent sales of similar land. Hughes suggests a better solution may be dropping the valuation of ag land to 55 percent. Nebraska statutes require that agricultural land be valued at 69 to 75 percent of market value.

— Hughes is concerned than an expanded Medicaid base may hurt the truly vulnerable people already on Medicaid, and, he asked, where is Nebraska going to find the money to pay for expanded Medicaid? “Ricketts won’t increase taxes to pay for it,” he said. By law, the federal government would be required to pay 90 percent of the cost of additional coverage. Ricketts has questioned that guarantee and says that he opposes Medicaid expansion on fiscal grounds.

— Hughes said he will check with Scott R. Frakes, director of the Nebraska Department of Correctional Services, and with Pam Morello, the warden of the NDCS Work Ethic Camp in McCook, regarding security at the work camp.

An escapee on Aug. 24 apparently stole a pickup, an SUV and weapons en route to an ex-girlfriend in Iowa before getting stopped in eastern Nebraska by Nebraska State Patrol troopers and officers of the Douglas County Sheriff’s Office and Omaha and Bennington police departments. Locally, the escape instigated a search by McCook police, the State Patrol and Red Willow and Frontier county sheriff’s officers.

Two inmates escaped on Dec. 21, 2016. Andrew Russell was apprehended Dec. 27, 2016; Charles Canaday was apprehended in November 2017.

The work ethic camp is a 200-bed minimum security facility.

A citizen at the meeting urged commissioners to look into a cell-phone alert system by which area residents could be warned of events such as the escape and incoming weather.

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