Christensen: No way to refund LB701 property taxes now

There is no mechanism now in place to refund property taxes collected under LB 701, Sen. Mark Christensen said this morning at the McCook Chamber of Commerce Legislative Conference call.

Yet, one of his proposed bills, LB 1127, could be amended to provide a means for the taxes to be paid back, he added.

Under LB 701, property taxes assessed by the the natural resources districts in the Republican River Basin are being collected for river flow enhancement funds.

The money would have been used to pay back $9 million the NRDs had planned to borrow to pay the irrigators who sold their water this year. But the bonding company declined to issue the funds, citing a pending lawsuit filed in Lancaster District Court that challenges the property tax provision of LB 701.

A bill by Sen. Tom Carlson of Holdrege was heard yesterday in the Natural Resources Committee that will create a fund from the state's cash reserve fund to pay the irrigators.

The property taxes being collected under LB 701 will not be spent until the lawsuit is settled, Christensen said, but admitted there is nothing in place now to refund those taxes if the lawsuit if successful.

Currently, property and occupation taxes levied by the NRD's and collected by the county treasurers are sent to the corresponding districts and held in escrow, according to Traci Witthuhn, coordinator of the Republican River Basic Coalition.

Christensen said that if the lawsuit is successful, the NRD's could raise the property tax levy to the full ten cents, as authorized under LB 701. The irrigation districts that are owed money could also sue, he added.

Either way, "It's a difficult situation no matter how we look at it."

Christensen said he found it disappointing that the toughest opposition to LB 701 came from the rural ares, which he didn't understand.

Concerning the current legislature debate about a state-wide smoking ban, Christensen said this bill has garnered the most responses from constituents since he's been in office.

Senators debated LB 395 Wednesday and will go at it again today. First brought to the legislature last year, it would prohibit smoking in any employment or public place in Nebraska.

It was held off from final hearing Wednesday to consider whether to exclude an amendment that would allow local communities to opt out of the ban.

Although the ban failed last year, Christensen said he believes there are enough votes this year to get it through, citing the 33 votes it received to pull the bill for more discussion.

When asked what would replace the hefty revenue stream the state receives from cigarette taxes, Christensen said there is no replacement provided, except for lowered health care costs.

"It will be interesting to see how it goes," said the senator, who did not offer his own opinion on the matter.

Other legislature items Christensen weighed in on included:

* Three bills that would have placed an excise tax on ethanol were killed in committee;

* Did not expect Appropriations to supply funds for several express highway bills;

* His proposed bill that would prohibit stem cell research is "still a work in progress" with a lot of work going on behind the scenes, he said. His bill would prohibit public funds to be used for creating or destroying an embryo and to prohibit cloning for life but not for research.

* Was one of the few freshmen senators who approved putting on the 2008 ballot an initiative that would raise state senator's annual salary from the current $12,000 to 22,000. The initiative will be placed on the 2010 ballot instead. He said some freshmen senators were hesitate to raise the salary but for him it's about doing "what's right."

"We're down here to do what's right. It's not about getting re-elected," he said, with an increased salary more important now with term limits in place.