Issuing his first veto of the session on Wednesday, Gov. Pete Ricketts said he would not sign a bill allowing Gage County to create a sales tax to help pay the Beatrice 6 judgment without a vote of the people.
The bill (LB472) from Sen. Myron Dorn of Adams would allow the county's Board of Supervisors to vote to create a countywide half-cent sales tax for the specific purpose of funding the federal judgment.
Dorn's bill was narrowly tailored to Gage County's circumstances. It makes the sales tax accessible only to counties facing federal judgments in excess of $25 million and expires on Jan. 1, 2027, or when the judgment is paid.
But in his veto message, Ricketts said "the Legislature has not authorized political subdivisions to impose new taxes on Nebraskans without a vote of the people."
"In Nebraska, we trust the people to make political decisions on a myriad of issues," the governor added. "These include referenda on the death penalty and Medicaid expansion. Despite claims by supporters of LB472 to the contrary, I believe the people can be counted on to do the right thing."
Dorn said Ricketts told him before the third and final round of consideration he would veto LB472 if it passed; the proposal sailed through final reading on a 43-6 vote.
Dorn said some Gage County constituents, sharing the governor's view, told him any sales tax should only be imposed if voters approve it. But the majority said in considering the circumstances that they supported his proposal.
Gage County, as well as two former sheriff's deputies, were found liable for leading an investigation into a 1985 Beatrice murder that violated the civil rights of Joseph White, Ada JoAnn Taylor, James Dean, Thomas Winslow, Kathy Gonzalez and Debra Sheldon.
A federal jury in 2016 awarded the six a combined $28.1 million for damages after they spent more than 75 years in prison for a crime they did not commit.
Once the judgment was finalized, Dorn said Gage County had no other option than to raise property taxes to the maximum amount allowed under state law -- 50 cents per $100 of valuation, which will generate around $3.8 million annually.
"We didn't get a vote of the people to put the property tax on to pay it," he said. "That was done by a vote of the board."
Drawing only from property taxes, $24 million of the $31 million owed would be collected from the rural areas of the county, which include several small towns surrounded by vast swaths of farmland.
To quicken the payments and spread the burden of the cost, Dorn said he introduced LB472, which would require a two-thirds vote of the seven-member county board to create a sales tax.
Dorn said the sales tax could raise as much as $1.3 million per year, potentially saving landowners more than $6 million in property taxes over the next several years.
Addressing Ricketts' argument regarding allowing the voters of Gage County to give their opinion on the tax, Dorn said he's not sure voters would approve it, potentially creating further legal troubles for the county of 22,000.
Ricketts said that fear should not be used as a reason for the Legislature to circumvent the will of the people.
While the events that led to Dorn's bill, including law enforcement violating the civil rights of the six, the county's lack of insurance coverage for the judgment, and the increase in property taxes to Gage County residents were "tragic," Ricketts said ""none of these tragedies are severe enough to authorize the county to break with the principle of allowing the people to vote on whether to raise sales taxes in their community."
"This bill sets a dangerous precedent for authorizing a sales tax increase," he concluded.
Dorn said he plans to file a motion to override Ricketts' veto on Thursday. Under the Legislature's rules, senators will take up the motion within five working days.