An additional sales tax will go into effect in Gage County starting on Jan. 1.
The 1/2-cent sales tax was approved by the County Board of Supervisors in September as a means of generating funds to pay the Beatrice 6 judgment.
County Board Chairman Erich Tiemann said the tax going into effect does not mean the end of officials asking the state to help pay the judgment.
“This is one way the legislature has tried to help us to pay off this debt of basically $30 million, which is over three times our total income as a county,” Tiemann said. “This is one tool that should help with that. Although this does go into effect Jan. 1, this is not the end of us trying to find ways to pay this or talking to the state to try and get additional aid.”
According to a press release from the Department of Revenue, all counties in Nebraska are permitted to adopt a county sales tax to fund public safety services, however the tax in question is unique in that it will be in addition to both state and city taxes in the county that have a city sales tax.
Currently in Gage county, Beatrice has a 2% city tax, Wymore has a 1.5% sales tax and Cortland and Odell each have a 1% sales tax.
After the new year in Beatrice, for example, a sale would be subject to the state rate of 5.5%, the city rate of 2% and the Gage County .5% for a total rate of 8%.
A key point in discussions about implementing an additional sales tax has been that it would benefit farmers by collecting money from additional sources, rather than placing the full burden of the judgment on property taxes.
“It’s helping everyone because the sooner we get this behind us the quicker it’s over,” Tiemann said. “Over 70 percent of our county is rural, so that means over 70 percent of this property tax bill is being paid for by rural residents. This helps spread this across the entire county and also brings in a lot of outside money from people passing through the county.”
Following a 1989 cold case investigation into the rape and murder of Helen Wilson in her downtown Beatrice apartment four years earlier, the six - Joseph White, Ada JoAnn Taylor, James Dean, Thomas Winslow, Kathleen Gonzalez and Debra Shelden - 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.
In June Gage County made its first payment to the Beatrice 6 when the board approved a $1.9 million claim.
The sales tax bill was introduced by District 30 senator Myron Dorn of Adams this year, and was tailored to fit Gage County’s predicament as it pays the $28 million federal judgment in installments.
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.
The sales tax is expected to generate approximately $1.3 million per year and result in the judgment being potentially paid two years earlier.
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.
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.
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