Wednesday, January 16, 2008

Pick Your Poison : User Fee or Property Tax

I'm looking for your opinion on a tax decision the Douglas County Board has to make at its Jan. 29 meeting.

It's the classic unfunded mandate that local governments face.

The federal government has mandated that states collect and treat storm water runoff more rigorously to keep pollutants out of the water supply. States are passing laws mandating that local governments upgrade their drainage systems accordingly.

But the federal and state governments do not include any funding to go along with the mandate. That burden falls on local governments.

Which means it falls on local taxpayers.

It's of course tempting to ignore the unfunded mandate, but the consequence is the loss of millions of federal dollars for environmental/infrastructure work. People talk a good game, but when you start talking about not constructing or fixing sewers or roads or other basic services, fiscal conservatism often goes out the window. GET THAT ROAD BUILT!

People think "agriculture" when they think of runoff, but it's an urban problem, too. Rooftops, parking lots, driveways, and sidewalks send a lot of water into the drainage system that used to sink into the ground.

Assuming we play the game and comply with the federal/state shakedown, how should we pay for it?

The Nebraska Legislature is considering legislation on this issue. It's on the agenda for the Douglas County Board's next meeting. What should we tell the state legislature to do: 1) Handle it through regular channels and perhaps have to raise the property tax to cover it, or 2) assess a fee on property based on its amount of impervious surface -- concrete or other waterproof surfaces covering ground that used to absorb storm water.

Option 2 is what Legislative Bill 534 would do.

Let's be honest. "Fee" sounds nicer than "tax," but it's a tax. That's why nonprofits, which are exempt from property tax, have fought this attempt to saddle them with a user fee for storm water runoff. They say it's a backdoor property tax on nonprofits.

You can reduce the fee by establishing rooftop gardens or other measures to reduce runoff. But of course that also is an expense.

What should we do?


OmaSteak said...

Instead of first looking at raising already sky-high property taxes or backdooring a property tax by calling it a "fee" for a property owner's amount of hardscape, why not look to shifting funding away from "soft" county expenditures? It's also way past time for county government to merge with Omaha city government to take maximum advantage of any available economies of scale. Outsourcing of non-public safety services should also be a very high priority to reduce overall number of city/county employees.

Chip Maxwell said...


Thanks for the comment. Please call in to the show (498-KOTK) to talk some more about this. Meanwhile, in the upper left corner of my blog page there is a white search box. Type "merger" in that box and then click "search blog." You'll find a bunch of my pro-merger commentaries in this blog.