Lincoln Senator Says He ‘Has Received Evidence’ the City Is Taxing Extraterritorial Residents

by John Gage

(Picture credit John Gage)

Lincoln State Senator Beau Ballard called on the city of Lincoln to return money collected from sales taxes from residents in the three-mile extraterritorial jurisdiction (ETJ) outside of city limits.

Ballard said in a Monday release that his office “received evidence that the City of Lincoln has been collecting its city sales tax from residents of its extraterritorial jurisdiction” and called for the money to be returned.

“Families in the ETJ don't get to vote in city elections, but we now have evidence from constituents that the City has been collecting city sales and occupation taxes from residents of the ETJ,” he said. “We don't yet know how long this has been going on or how much has been collected, but we believe the amount likely is substantial. And if the City had no legal authority to take it, even one dollar is too much.”

Ballard and Lincoln Republicans have argued that the members of the city’s ETJ should be able to vote in city elections because they are regulated and taxed by the city. Lincoln Mayor Leirion Gaylor Baird has previously claimed the city does not tax members of the ETJ.

“One of the initiatives allows people who don’t live in Lincoln and don’t pay city taxes to vote in our city elections,” Gaylor Baird said in a statement on Facebook in July.

The city of Lincoln did not immediately return a request for comment on the story.

Ballard said it is unclear how long the city has been taxing ETJ residents or how much money they have collected. The state senator called on the city to be transparent and “make it right” with residents.

“The City should open its books, do a full and fast accounting, and send refunds to everyone in the ETJ who paid a tax they never owed,” he said. “But taxpayers shouldn't have to wait on City Hall. That's why I'm bringing legislation to right this wrong and return the money to the people it belongs to.”

Introducing Legislation

Ballard said he plans to introduce legislation next session to address the issue.

The bill will include a requirement that the city conduct a 20-year audit and return any money within that period, give taxpayers in the ETJ interest on any money the city collected, conduct a quarterly reconciliation of its books for any future refunds, and allow the attorney general to force the city to comply with the measures.

“This City has a pattern of dragging its feet on basic duties, including recently refusing to avoid its constitutional responsibility to put charter amendments before voters,” he said. “Given the City's disregard of its duties, it may take a penalty to get the City to stop taxing people it has no right to tax.”

Charter Amendment Fight Continues

Ballard’s announcement comes as Lincoln is set to vote on five different charter amendments this November. Three amendments were initially proposed by the group Good Government Lincoln.

The amendments include putting two term limits on city council members, allow residents of Lincoln’s extraterritorial zoning jurisdiction to vote in city elections, and realign city elections to coincide with state and federal elections in hopes of increasing voter turnout.

The city has introduced two of its own proposals including a term limits amendment that would allow for three terms instead of two and another amendment to move elections to align with state and federal elections but would allow current officials to serve until 2030, allowing the mayor to serve a three-and-a-half year term instead of a one-and-a-half year term under Good Government Lincoln’s proposal.

— John Gage is the executive editor of The Plains Sentinel.