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The State of Nebraska already gets 40 percent of its operating funds from the federal government. But such money comes with strings attached. In return, the state relinquishes control over significant parts of its budget to the whims of federal bureaucrats. Now, ask yourself this question — Do you really think it’s wise to allow towns and cities in Nebraska to do the same thing in the name of fostering local economic and industrial development?

That’s what Amendment 1 would do. Amendment 1 is the Nebraska Municipal Economic Development measure that was placed on the 2010 ballot by the Nebraska Legislature. The amendment is actually making its second appearance on the ballot, having been defeated by a 54% to 46% margin in 2008. I guess the Legislature can’t take NO for an answer, especially when that answer denies elected officials at any level access to funds to enable them to engage in their favorite activity — spending like drunken sailors.

Supporters of Amendment 1 are optimistic the measure will pass this November because “the ballot language this time spells out more clearly what the amendment would do.” Apparently, like health care, the voters didn’t really reject the proposal in 2008; it just wasn’t explained to them properly.

As the Nebraska Constitution now stands, cities that want to launch an economic development project are limited in the sources of funds they can use to finance the project. They can only raise such money through local sales or property taxes.  Amendment 1 would permit cities to finance economic development projects with funds from a number of other sources, including state and federal grants, private donations, and public utility revenues. Of course, voters would still be required to approve expenditures.

According to Speaker Flood of the Nebraska Legislature, “If you want to help cities with economic development, and you want to find a way for them to do it without raising taxes, this is an obvious choice.”  Because tax increases are unpopular with voters, the requirement that economic development projects be financed with property or sales tax revenue forces city officials to pause and give such projects very careful consideration before they give them the green light.  This is a good thing.  The present funding scheme insures that city officials are so convinced of the value of a project to their community that they are even willing to propose tax increases, and suffer public complaints about those hikes, in order to pay for it.

Flood’s comment assumes Amendment 1 will not result in increased taxes. But state and federal grant funds also come from taxes. It is not “free” money, it’s just further removed from the local sales and property taxes that we pay.  Because the city fathers won’t be hearing from disgruntled constituents when increased state and federal tax bills come due, Amendment 1 effectively removes the check that the present funding requirement places on city officials and prevents citizens from holding those city officials accountable for the consequences of their policies and their votes.

But, supporters say, in some cases, municipal budgets and the attendant tax burdens on their citizens are already stretched to the limits.“Lynn Rex, executive director of the League of Nebraska Municipalities, said many cities, including Omaha and Lincoln, don’t use [the current economic development provision] now. Many need all their available sales taxes for other purposes, and few are willing to tap property taxes.”  Instead of giving them access to more of our money, perhaps those cities should get their spending under control.  If economic development is a priority, they have an incentive to do so, but only if Amendment 1 is defeated.

In weighing in on the proposed amendment in 2008, the National Taxpayer’s Union (NTU) stated, “Despite the voter approval safeguard, this proposal could still encourage additional government spending liabilities.” NTU rated the 2010 ballot measure as likely to raise taxes or expand government and commented that, “Fiscal conservatives believe that this could lead to more borrowing and indebtedness for local government.” Ya think?

Vote NO on Amendment 1.