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Nebraska Farm Bureau Opposes Spending Limit Proposal

Lincoln – Nebraska Farm Bureau, the state's largest farm organization, is opposing the proposed constitutional amendment to restrict state spending.

"The 'Stop Over Spending' proposal would cause many state-funded services to be shifted to the local level, where the result would be increased property taxes," Nebraska Farm Bureau President Keith Olsen said Sept. 1. "The proposal would cut state spending but it has no power to reduce local spending."

Citizens are mistaken if they believe passage of the proposal will cut their total tax bill, he said. "What it will do is shift more of the burden of providing services such as schools to the local level."

Nebraska Farm Bureau policy puts a high priority on reducing property taxes, Olsen noted. The Nebraska Farm Bureau Board of Directors voted Aug. 10 to oppose the SOS ballot issue.

Olsen cited five reasons for Farm Bureau's opposition to the proposed amendment:
1. Higher property taxes. Passage of SOS would limit growth in state aid to schools and other local governments and shift the burden for funding to the local level, where property tax increases would result. Financial pressure on local governments would translate into pressure on the legislature to repeal levy limits and budget lids.

2. Reduced Funding for Rural Programs. Annual increases in spending for public safety programs, education and public assistance programs such as Medicaid historically outpace other budget items. Passage of the amendment will mean a funding shift away from programs important to rural Nebraska such as natural resources, agriculture and rural economic development to fund the more rapidly growing programs.

3. More Potholes. Passage of SOS would limit the growth in roads' spending regardless of the need, and likely shift tax dollars (gasoline and motor vehicle taxes) intended for roads construction and maintenance to other budget items. Roads infrastructure in rural areas would suffer particularly because scarce roads dollars could be shifted to more populous areas where infrastructure pressures are greater.

4. Increased Fees on Agriculture. Fees collected to fund state programs are exempt from the spending lid. Instead of general funds being used to fund regulatory programs, user fees would be used to pay for the programs. For example, livestock waste regulations are presently funded with a mix of general fund dollars and user fees imposed on livestock operations, with about 20 percent coming from user fees. Passage of SOS would likely lead to user fees on livestock operations being increased to fund the entire program.

5. Loss of Flexibility. Passage of SOS would lock in place a rigid, inflexible formula for determining state spending. It would take away the flexibility of the state to respond with budget changes needed because of a growing, dynamic state and economy. Locking the formula in the constitution will likely lead to countless court challenges as the state attempts to sort through which spending items are limited under the amendment and which are not.
Colorado added a spending restriction similar to the SOS proposal to its constitution in 1992. However, Coloradans voted last November to suspend it for five years, Olsen said, because education, economic development and health care have all suffered as a result of the spending limit.

"Make no mistake - adoption of the SOS amendment would be very poor public policy with many unintended consequences," he said.