Around 20 people attended a town hall meeting in Beatrice Wednesday night to learn about a proposed countywide sales tax that could generate funds to help pay the 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.
Dorn and members of the County Board of Supervisors explained the purpose of the tax, which was created as an alternative to using property taxes to pay for the entire judgment.
The tax, which allows counties to create a countywide half-cent sales 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.
The board voted last September to raise the levy to the maximum allowable 50 cents. For taxpayers, that amounts to $120 annually on property valued at $100,000.
The sales tax will sunset in 2027 or when the judgment is paid in full, whichever comes first. Dorn said the act itself sunsets, so if the judgment would for some reason not be paid off or if another county finds itself in a similar situation another bill would be need to be approved. He stressed there are safeguards in the legislation to prevent the sales tax from being abused.
“There was a lot of concern, a lot of questions about counties coming in and doing something to implement a 1/2-cent sales tax to pave a road or pay for some kind of building or other project,” Dorn said. “We had in here this could only be used to pay a federal judgment. Then through discussions it was added a federal judgment of greater than $25 million.”
Implementing the tax will require affirmative votes from five of the seven County Board members, and will likely be voted on later this year.
Gage County previously had authority to approve a sales tax, though it wouldn’t have been able to collect in communities where cities had their own sales tax already in place, meaning Gage County couldn’t collect sales tax in Beatrice.
"That could be put in place, but it would have excluded the towns anywhere that has the sales tax already,” board chairman Erich Tiemann said. “Part of the reason to go this route, which would include all the cities, is that there’s already an additional burden in a rural county on agland. This helps spread that over a broader base.”
Currently, the only way for Gage County to pay the judgment is through property taxes.
Property taxes being raised to the limit generate $3.8 million annually. As the only source of funds it would take approximately eight years to pay the judgment, which Dorn said is close to $30 million with attorney fees and interest.
The sales tax would generate approximately $1.3 million per year and result in the judgment being potentially paid two years earlier.
Gage County farmers are expected to benefit the most from the sales tax.
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Dorn said 72 percent of Gage County’s valuation is rural areas, though true agland, with rural residences removed, accounts for 52-55 percent. He said farmers make up about 27 percent of Gage County’s population, and with agland being the bulk of valuation for the county to collect property taxes on, that 27 percent of residents will pay more than 70 percent of the judgment if property taxes are the only funding source.
Those who attended Wednesday’s meeting seemed to agree. Five people spoke at the meeting. All of them supported a sales tax to ease the burden of property taxes.
Don Schuller of rural Wymore, who ran against Dorn for the District 30 seat, agreed the tax should be approved by the county and put into place.
“I do support the sales tax bill,” he said. “I have supported it when it was being voted on. We need to get this paid as soon as we can to keep the interest amount down. None of us like having to pay for it, but that’s the way it is.”
Schuller and others added that the county should continue pushing for the state to assist in paying the judgment, while some also asked the county to make budgetary cuts in the coming years to save money.
In June Gage County made its first payment to the Beatrice 6 when the board approved a $1.9 million claim.
Earlier this year the United States Supreme Court declined to hear the case, effectively sealing the county’s fate.
It was the last legal option available to Gage County 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.
Gage County appealed the decision to a three-judge panel from the 8th Circuit U.S. Court of Appeals, but the panel affirmed the jury verdict in June. The 8th Circuit later rejected Gage County's petition for the appeal to be heard by the full court in July, leaving the Supreme Court as the final option.