Accomplishing more with less use of local property taxes is goal of NRDs
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Photo Description: Major Nebraska river basins form the boundaries of the Natural Resources Districts (NRDs), enabling districts to respond best to local needs. The Lower Elkhorn Natural Resources District, all or parts of 15 counties in northeast Nebraska, strives to accomplish more while keeping local property taxes low.
Nebraska’s Natural Resources Districts (NRDs) are a unique form of local government when compared to other parts of the nation, as Nebraska is the only state that addresses natural resource management concerns using this political structure. Given the fact that NRDs are granted the authority to generate revenue by levying property taxes provides them with a consistent source of revenue that can sustain critical programs and projects, but also heightens the need to be fiscally responsible with local tax dollars.
In response to that scenario, the NRDs have utilized multiple strategies to generate revenue that can supplement and soften the impact to local property owners by opening multiple avenues of funding provided by other local, state, and federal government entities, in addition to the development of innovative partnerships with private sector interests.
Mike Sousek, general manager for the Lower Elkhorn Natural Resources District (LENRD), said, “We are constantly looking for ways to partner with other agencies to get practices and projects on the ground. Most of our project funding comes from leveraging collected property tax dollars to obtain grants, which account for 50% of our expenditures and sometimes more.”
One example is the grant the LENRD received from the Nebraska Environmental Trust (NET) which will allow them to expand their groundwater quality monitoring programs in Pierce, Cuming, Colfax, and Dodge Counties. Through this project and in cooperation with the University of Nebraska’s Water Science Laboratory, the LENRD will expand their monitoring efforts to include baseline vadose zone nitrate data. Vadose core sampling is taken from the area extending from the top of the land surface down to the area located just above the water table (which is variable throughout the area). Groundwater nitrate levels in many of these areas exceed the maximum contaminant level to be considered safe sources of drinking water (MCL), and, unfortunately, continue to increase. The vadose zone sampling will provide information, by depth, regarding the residual concentrations of soil nitrate, which is useful information regarding where the nitrate is occurring and can help scientists estimate when contamination events might have occurred, and if or when additional contributions of contaminants might occur. Sousek continued, “Absent the supplemental revenue from the grants, funding for these programs would fall entirely onto our general fund, which is supported by local property taxes.”
When securing a grant, a list of criteria must be met to obtain critical funding. If the criteria are not met, the funding eligibility is eliminated, which makes leveraging outside resources nearly impossible. Sousek said, “Locating supplemental funding sources to help communities control flooding is a high priority, and in most cases a necessity. Reliable revenue is needed to complete these projects, which often cost millions of dollars, while maximizing the efficient use of local tax dollars. We are working hard to manage this district like a private business, watching our bottom line and being responsible with the funding available.”
To provide an example, let’s look at the Battle Creek Watershed Plan and Environmental Assessment, which was initiated to secure potential options for funding to remediate flooding concerns. The LENRD is working with stakeholders to address flooding issues in and around the City of Battle Creek. Sousek said, “Without the possible access to the federal funds, paying for a recommended project would mean that our property tax asking authority would be pushed to the maximum level of 4.5066 cents per $100 of valuation for 7 years or more.” When examining the amount of revenue generated by the LENRD’s portion of the total property tax levy this would calculate to approximately $135.20 in taxes for a $300,000 house (currently, at 2.3236 cents per $100, a $300,000 house would have a tax assessment of $69.70). If you own 160 acres of irrigated farmland, at the assessed value of $5,375 per acre, the taxes would be $199.83, using the 2021 levy rate. With an increase in the tax levy, to support unfunded projects, the taxes would be around $387.57 for those same 160 acres. Sousek said, “We can go that route, but we would have our local tax dollars tied up in one project until the financial obligations have been repaid and if an emergency arises during those years, we will not have the financial resources to help any other communities or landowners in our district. Our levy would be at its max.”
Yet another example of the efficient use of local property taxes involves community partnerships. During the flood of 2010, flooding caused significant damage along the Elkhorn River, and caused the collapse of a railroad bridge which spanned the river just west of Norfolk, which negatively impacted area businesses and industry. In 2017, the LENRD board approved an interlocal agreement to move forward with a bank stabilization project to protect the railroad and US Highway 81 from future flood events. The bank stabilization project brought together public and private partners, including: the Madison County Railroad Transportation Safety District, Nebraska Central Railroad, Nucor, Vulcraft, Elkhorn Valley Ethanol, Norfolk Iron & Metal, along with the LENRD, all sharing the cost which will provide economic benefits for the entire region and saving local property taxes in the process.
“Our district is always working to limit the impact of local property taxes by offsetting the costs of our programs and projects through any option possible. This strategy allows us to stretch our dollars farther, which leaves money in the pockets of residents who contribute to our local economy. Even with property valuations increasing, our responsibility is to the local taxpayer and working diligently to maintain a low budget footprint,” said Sousek. “Keep in mind that we are just one taxing authority out of a handful who generate revenue from property taxes.” On average, the LENRD accounts for approximately 1.5% of your total property taxes.
Sousek said, “Nebraska’s NRDs have been focused on protecting our future for 50 years, working diligently on the responsibilities given to them by the Nebraska Legislature. Our goal is to accomplish more with less use of our local property taxes.”