Zach Wendling
LINCOLN — A Nebraska lawmaker hopes the third time will be the charm in letting voters decide whether to prohibit future state-created unfunded or underfunded mandates on local governments.
Legislative Resolution 1CA, a constitutional amendment proposed by State Sen. Carol Blood of Bellevue, would prohibit future lawmakers from passing on the cost of a new program to local governments, or increase existing levels of service, without full reimbursement from the state. That would include counties, municipalities and school districts.
It is Blood’s third attempt to push the idea and, as with her earlier proposals, the current legislation was unanimously voted out of the eight-member Government, Military and Veterans Affairs Committee.
“It isn’t that a lot of these programs are not necessary that have been passed down,” Blood said last week. “It’s that, instead of trying to find a creative way to generate revenue to pay for it, they’ve just passed that cost down and said, ‘Bite the bullet.’”
Snowball effect
Without matching state resources, local governments often must raise taxes, usually through property taxes, to take on such unfunded or underfunded mandates, Blood said.
Local unfunded mandates
Legislative Resolution 1CA, a constitutional amendment, could let voters prohibit future mandates on local governments without full state reimbursement. It would not prohibit federal mandates, though it would prevent lawmakers from passing on unfunded requirements.
The following organizations have compiled documents summarizing some unfunded or underfunded mandates:
- Nebraska Association of County Officials.
- League of Nebraska Municipalities.
- Nebraska Association of School Boards.
Some examples include:
- Counties — Administering elections, providing indigent defense (for people who can’t afford private attorneys) and conducting an autopsy or calling a grand jury after the death of a state prisoner.
- Municipalities — Storing DNA and body camera evidence, conducting health monitoring, overseeing building codes, overseeing regulations to license various occupations and retirement pensions.
- School districts — Enforcing student vaccine requirements, making curriculum changes, providing suicide awareness and prevention training, assuring graduation requirements and providing student health exams.
Local political subdivisions are also subject to placing public meeting notices in local newspapers and responding to records requests.
“No single drop believes it causes the flood, and so when you pile these things on over time, it leads to an increased cost of government,” Jon Cannon, executive director of the Nebraska Association of County Officials, told the Nebraska Examiner this summer.
He and other local government representatives voiced their support for Blood’s legislation, while cautioning that an “unfunded mandate” doesn’t mean it’s unnecessary.
Tim Gay, registered lobbyist for Sarpy County and a former county commissioner, testified in support of LR 1CA at its hearing. He said his county calculated it must pay for about $15 million in annual unfunded or underfunded mandates.
Gay said the change could improve cooperation with lawmakers in getting accurate fiscal estimates for legislation and ironing out spending details sooner.
History has shown impacts
Lynn Rex, executive director of the League of Nebraska Municipalities, said the federal government sometimes gives mandates to the state, but lawmakers or the executive branch pass on those requirements to local governments “without giving them a dime.”
Multiple studies have examined the impact of unfunded mandates going back to the 1990s, when Ben Nelson was governor, Blood said. Other lawmakers have taken up that mantle, too: State Sen. Justin Wayne of Omaha and former State Sens. Deb Fischer and Sue Crawford.
Gov. Jim Pillen also voiced support this summer for getting rid of unfunded mandates, although he didn’t have lawmakers introduce legislation on his behalf to do that during the special session.
Over time, the state rolled back other aid to counties and municipalities, Rex said, particularly in hard budgeting times. Lawmakers also narrowed the local base for sales and property taxes, to be competitive with other states.
Just one of those shifts led to a reimbursement, Rex said: In 1977, the state exempted livestock, farm equipment and business inventory from property taxes.
By 2011, that $17.9 million allocation to municipalities “was totally eliminated,” Rex told the Revenue Committee last week.
“Every time there was a fiscal crisis it was cut, cut and cut, and ‘We will reimburse you as soon as the state recovers,’” she said. “That never happened. Not once. Not ever.”
‘Do the right thing’
LR 1CA would require a companion bill to appear on the 2024 ballot — the current deadline is four months before the election. If passed alone, the issue would go on the 2026 ballot. If voters approve, future lawmakers would get to refine the policy, including exemptions.
Though LR 1CA was the first piece of legislation voted out of committee last week, Speaker John Arch of La Vista, who sets the Legislature’s schedule, has said it will have to wait to be considered. First on the debate docket will be session expenses and then core property tax proposals that will come from the Revenue and Appropriations Committees.
Should lawmakers choose to stay in session, LR 1CA could be debated, but it’s not guaranteed.
Blood said LR 1CA is her “last hurrah” in her eighth and final year in the Legislature. She said it’s “time that we put on our big girl pants” and “do the right thing.”
“I’m puzzled,” Blood said of the delay. “I’m disappointed, and I encourage people to reach out to their senators and say, ‘I want to vote on this.’ I’m appalled that this has never been taken to a vote for the people. What are they scared of?”