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Nebraska's Chris Weber (49), Carlos Davis and Alex Davis (22) stop Iowa punter Colten Rastetter (7) after a fumbled snap in the first quarter Friday at Memorial Stadium.

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Speaker summons senators to rare meeting as Legislature approaches tax meltdown

With the Legislature divided and on course to taking no action on property tax reform, Speaker Jim Scheer on Friday scheduled an extraordinary Saturday morning meeting with sponsors of competing bills in a final effort to obtain agreement on a plan before the 2018 session adjourns.

But that effort at collaboration and compromise quickly got off to a rocky start. 

Hanging over the Legislature as it prepares to enter the final four days of the current session is a statewide initiative petition drive to place a billion-dollar property tax relief proposal on the November general election ballot for a vote of the people.

If that initiative is enacted, the next legislative session will face the task of filling a huge hole in state income tax revenue that will be used to fund local property tax relief, Scheer noted.

But that initiative proposal also represents "a high-stakes gamble for agriculture," the Norfolk senator suggested, because of the risk that "no one will ever care any more" about resolving the issue in the Legislature if voters reject substantial property tax relief. 

Following a day consumed by divisive debate over property tax relief proposals that traveled in circles with no consensus in sight, Scheer arose from his seat in the back of the chamber to scold sponsors of the competing plans, suggesting that "no one was willing to compromise" in resolving the tax issue.

The speaker subsequently said Revenue Committee Chairman Jim Smith of Papillion, Sen. Tom Briese of Albion, Sen. Curt Friesen of Henderson, Sen. Mike Groene of North Platte and Sen. Steve Erdman of Bayard would be asked to join the meeting in his office Saturday morning.

That effort to try to reach consensus quickly began to melt down.

"I resent you suggesting I have not worked to try to find a compromise," Smith said after returning to the floor from his legislative office.  

Smith said he had a business appointment scheduled for Saturday and would not be able to attend a meeting called on such short notice.

Meanwhile, Sens. Burke Harr of Omaha and Paul Schumacher of Columbus, both members of the Revenue Committee who have been actively engaged in shaping tax legislation, expressed objections about not being included.

And other senators questioned whether the group of invited participants were representative of the entire Legislature. 

The meltdown followed a day of sparring over competing tax proposals offered by Briese and Friesen with no movement toward an agreement.

Smith is the author of the tax reform plan supported by Gov. Pete Ricketts, which earlier was stalled on the legislative floor.  

That bill (LB947) would center on building property tax relief over a decade while providing phased-in corporate tax reductions and funding workforce development initiatives.

The Briese bill (LB1084) would provide substantial property tax reduction immediately with funding provided by a half-cent increase in the state sales tax rate and other revenue-producing measures, including a hike in the state cigarette tax and a surcharge on high-income earners in the state.

Friesen's proposal (LB1103) centered on providing property tax relief by requiring state aid funding for every school district, recognizing that 178 districts now receive no fundamental state assistance.

Friesen endorsed an amendment to his bill that incorporated the Briese plan, which was unable to clear the Revenue Committee.

"I'm willing to raise taxes to fix the property tax problem," he said.

Briese said his proposal would pay for property tax reduction and balance the state's tax structure, which now leans heavily on property taxes.

Smith said the Briese plan represented "a very, very significant tax increase."

Sen. John Kuehn of Heartwell said he was "amazed, frustrated and annoyed" that the Legislature waited until its fading days to confront the issue.

"In the final days, we are trying to cobble together some sort of property tax plan," he said. "It'll disappear, we'll all go home frustrated and nothing will happen again.

"Voters don't have any confidence in us anymore," Kuehn said, "and they shouldn't."

Garbage haulers say cardboard ban has created some headaches this week

Though the majority of Lincoln residents were ready for the landfill ban on corrugated cardboard that started Sunday, the ban did have its first-week headaches, according to city staff and several refuse companies.

* Local garbage haulers were pulling corrugated cardboard boxes out of garbage totes and leaving them at the curb, with notes from the city, throughout the week.

* Some apartment owners made no provisions for recycling and the tenants were leaving corrugated cardboard in the apartment Dumpsters.

* Local haulers saw a large increase in recycling customers in the month before the ban began and this week. There is such demand the haulers have run out of recycling totes for residences and larger containers for businesses.

Local refuse companies said they were sorting curbside garbage all week and leaving cardboard boxes on the curb, with a post-it note from the city explaining the new ban.

It took operators about an extra hour Monday, the first day of collecting under the ban, to do that extra work, said Steve Hatten with Paragon Sanitation.

That first day, one hauler reported pulling corrugated cardboard out of garbage at about 30 percent of residences, said Gene Hanlon, recycling coordinator for the city. 

“It’s a learning curve,” said Brian Kurtzer, with D&D Refuse and Recycling.

Some customers are unaware of the new ban on corrugated cardboard at the landfill, a new city ordinance. But others are just seeing how long they can get away with putting cardboard in the trash, he said.

Brad Uribe of Uribe Refuse and Uribe RecycleLink said he's gotten nasty notes from customers whose cardboard was left at the curb. When he calls back, most people understand this is a city ban and the hauler is just the middle man, but they are still angry, he said.

"We are not trying to be the police. We are trying to avoid the fine," Hatten said. Refuse haulers are fined when they bring banned items to the landfill. 

Refuse companies also reported a number of apartments where owners don't provide recycling and residents are leaving corrugated cardboard in Dumpsters.

One apartment owner told Uribe he didn’t intend to offer recycling to tenants because he didn’t have to under the city ordinance banning corrugated cardboard.

The ordinance bans cardboard from the landfill, but does not require anyone, including apartment owners, to contract for a recycling service. 

“Some of the apartment owners really don’t care,” Uribe said.

Many apartment owners are now providing for recycling, said Hatten. But owners, particularly at the low-income end, are leaving cardboard recycling up to tenants, he said.

Homeowners and renters can pay for curbside recycling or take corrugated cardboard to one of the city recycling sites. Business owners can make arrangements with a private company for recycling or take corrugated cardboard to one of three private processing companies in the city.

The ban only applies to corrugated cardboard — three layers of paper with a ruffle in the middle — but supporters hope it encourages more people to recycle more items, including other paper, hard-plastic containers and cans.

And that seems to be happening. Uribe said his recycling business had plateaued until last month.

His company had about 400 new customers, many of whom waited to start the new service on April 1, Uribe said.

And his email this week has been filling up with customers who want to add curbside recycling.

Kurtzer said he expects lots of calls in the next few weeks from people who procrastinated in setting up curbside recycling. 

The three refuse and recycling companies that provided information to the Journal Star about the first week of the ban said they've spent thousands on equipment for new recycling business, are scrounging for residential totes and are out of commercial containers.

“Everything is on order. It’s going to take some time to get them (business containers),” Uribe said.

It will take people a couple of months to figure out they can't leave cardboard in their trash, Hatten predicted. Residents went through the same learning curve when lawn waste was first banned in 1992, he said. 

Staff has been monitoring the city's free recycling sites daily this week and are seeing more traffic, according to Hanlon.

And the city is seeing very little corrugated cardboard on the garbage loads it's inspected this first week. The haulers have done a very good job of informing their customers, said Donna Garden, assistant director for Public Works and Utilities.

There is still some confusion about what exactly is banned. Corrugated cardboard that is wet at the time of pickup, or has oil or paint on it, or is attached to Styrofoam or wood can be taken to the landfill, Hanlon said.

US-China trade rift could squeeze growth and hurt consumers

WASHINGTON — Higher prices. Slower growth. Farmers losing access to their biggest foreign market.

Even President Donald Trump is warning that Americans might have to accept "a little pain" before they enjoy the fruits of his escalating trade fight with China.

On the pain part, if not necessarily on the "little" part, most economists agree with the president: The tariffs the United States and China are preparing to slap on each other's goods would take an economic toll.

For now, optimists are clinging to tentative signals from the Trump administration that it may be prepared to negotiate with Beijing and avert a trade war.

But Wall Street is getting increasingly nervous. The Dow Jones industrial average lost 572 points Friday after being down as much as 767.

"There are no winners in trade wars," said Nathan Sheets, chief economist at PGIM Fixed Income. "There are only losers."

Thursday, Trump ordered the U.S. trade representative to consider imposing tariffs on up to $100 billion worth of Chinese products. Those duties would come on top of the $50 billion in products the U.S. already has targeted in a dispute over Beijing's sharp-elbowed drive to supplant America's technological supremacy.

China has proposed tariffs of $50 billion on U.S. products that will squeeze apple growers in Washington, soybean farmers in Nebraska and winemakers in California. And Beijing warned Friday that it will "counterattack with great strength" if the United States ups the ante.

Of course, it may not come to that.

"We're absolutely willing to negotiate," Treasury Secretary Steven Mnuchin said Friday on CNBC, adding, "I'm cautiously optimistic that we'll be able to work this out."

At the same time, Mnuchin warned, "There is the potential of a trade war."

Economists already are calculating the potential damage if talks collapse and give way to the biggest trade dispute since World War II.

The dueling tariffs could shave 0.3 percentage points off both U.S. and Chinese annual economic growth, according to estimates by Gregory Daco, head of U.S. economics for the research firm Oxford Economics.

In the United States, Mark Zandi, chief economist of Moody's Analytics, said the dispute could wipe out half the economic benefits of the tax cut Trump signed into law with great fanfare in December.

"There's lots of different channels through which this hurts the economy," Zandi said. "The most obvious is, it raises import prices. If American consumers have to spend more on Chinese imports, they have less to spend on everything else."

In the first $50 billion in planned tariffs, the Trump administration was careful to limit the impact on American consumers, sticking mostly to industrial products, such as robots and engine parts.

But if the administration tries to triple the tariffs, they will be more likely to hit the low-price Chinese products that American households have come to rely on, namely electronics, toys and clothing.

The administration appears to be betting that China will back down because it has more to lose. It sent $375 billion in goods to the U.S. last year, while the United States sent only $130 billion worth of products to China.

But China has other ways to retaliate. It could cancel aircraft orders from Boeing. It could meddle with U.S. supply chains by disrupting shipments from Chinese factories to American companies. Or it could raise U.S. interest rates by selling Treasury bonds or buying fewer of them.

The Chinese appear confident they can withstand more pain than Americans can. In a democracy like the U.S., "if people start to hurt, they're going to complain," said Sheets, who was undersecretary for international affairs in the Obama administration Treasury Department.

They're complaining already.

Zippy Duvall, president of the American Farm Bureau Federation lobbying group, warned that the dispute has "placed farmers and ranchers in a precarious position."

"We have bills to pay and debts we must settle, and cannot afford to lose any market, much less one as important as China," Duvall said.

Last year, the United States sold $12.4 billion in soybeans to China — nearly 60 percent of all U.S. soybean exports.

Trump, who received overwhelming support in rural America in the 2016 presidential election, has directed Agriculture Secretary Sonny Perdue "to implement a plan to protect our farmers and agricultural interests." But a move to support American farmers could widen the trade dispute.

"Farmers in countries like Australia, Brazil, Argentina, Canada and Europe would now find it difficult to compete with newly subsidized U.S. agriculture," said Chad Bown, senior fellow at the Peterson Institute for International Economics. "As a result, they might demand retaliation against U.S. exports or subsidies of their own."