An additional ½-cent sales tax will go into effect with the new year in Gage County.
The sales tax was approved unanimously on Wednesday by the County Board of Supervisors as a means of generating funds to pay the lingering Beatrice 6 judgment.
The tax bill was introduced by District 30 senator Myron Dorn of Adams this year, and was tailored to fit Gage County’s predicament as the county looks for ways to pay the $28 million federal judgment.
Currently, the county is only paying toward the judgment by using property tax funds. The approach places the bulk of the burden on farmers, and the sales tax was proposed to ease some of those concerns.
“Trying to do our due diligence, I think it’s important for us to try and work with the tools we are given from the state and continue building relationships with legislators and other members of the unicameral trying to form some type of relief for the county,” said County Board Chairman Erich Tiemann. “At the same time, we may not want to raise taxes. None of us do.”
The sales tax will generate approximately $1.3 million per year and result in the judgment being potentially paid two years earlier. It will go into effect Jan. 1, 2020.
Tiemann said one of the biggest concerns he’s heard from the public regarding the tax is that it will never go away, and that funds collected from the sales will eventually be used for other projects. He said there are multiple safeguards in place to prevent the tax from being abused, including a sunset clause that the tax will become unavailable in 2027, whether the judgment has been paid off or not.
“There are several safeguards here so that this tax, if implemented, has multiple sunset clauses, one being in 2027,” Tiemann said. “There’s a chance this judgment could be paid by then. There’s also a chance it could not be paid at that time, but there are multiple sunset clauses in this bill if something like this is implemented.”
The tax is only available for counties facing federal judgments of more than $25 million and only if their property tax levy is at the maximum allowable under state law.
Property taxes being raised to the limit generate $3.8 million annually in Gage County. As the only source of funds it would take approximately eight years to pay the judgment, which is close to $30 million with attorney fees and interest.
Greg Lauby of Wymore spoke at the board meeting and expressed remaining concerns that the sales tax funds could be misused, including if the legislature makes changes.
“There’s been much made about the provisions of the bill that would cause it to expire, either when the judgment is paid for by 2027,” Lauby said. “There’s been no mention made that the legislature can amend the bill and change the purpose of the collection of the tax or the duration of the tax so that before the sales tax ends, it could change so it’s purpose is to fund school buildings or a jail and last as long as the cigarette tax has.”
The big picture talks at board meetings have focused on the sales tax helping farmers, whose property tax dollars will ultimately pay a smaller percentage of the total judgment if sales tax funds are also collected.
While that may be true in the long term, Lauby pointed out that Gage County property taxes will remain at the legal limit for several years in addition to the new sales tax, adding to rather than reducing the burden in the short term.
Tiemann responded that the board wasn’t excited about adding a sales tax, but believes an additional source of funds to pay the judgment will be an overall benefit to Gage County residents.
“Even brining up our property tax to the level of inflation is difficult at times,” he said. “We don’t want to do that. We have to look at a judgment that needs paid. We’re not on the decision committee whether we should or should not pay the judgment. We’re on the how-to-fund-it committee and we’re trying to find ways to fund this as best as possible and take some of the burden off the landowner… We have 26,000 people throughout the county and the majority of this is being paid by approximately 2,000 people. We have to spread that load.”
Fellow board member Terry Jurgens added that farm repairs are exempt from state sales tax, and will also not pay the addition tax approved by the board on Wednesday.
In June Gage County made its first payment to the Beatrice 6 when the board approved a $1.9 million claim.
in the federal civil rights case filed by Joseph White, Ada JoAnn Taylor, James Dean, Thomas Winslow, Kathleen Gonzalez and Debra Shelden in 2009.
Following a 1989 cold case investigation into the rape and murder of Helen Wilson in her downtown Beatrice apartment four years earlier, the six were convicted and spent a combined 75 years in prison.
DNA evidence later pointed to a seventh person — Bruce Allen Smith, who died in 1992 — as the actual perpetrator.
They were exonerated in 2008, and the next year, sued Gage County for the reckless investigation that landed them in prison.
After two mistrials, a federal jury found enough evidence that then-deputy Burdette Searcey and then-reserve deputy Wayne Price had violated the six's rights, awarding them a combined $28.1 million.