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It was historic from the moment it began.

When the first Republican woman to be elected governor anywhere in the nation strode into the history books, she walked in with an exclamation point attached for good measure.

Kay Orr's 1986 contest with Democratic nominee Helen Boosalis also marked the first time both major political parties gave voters a choice between two women for governor of their state.

The political world took notice when Orr won.

Even a president.

Ronald Reagan had campaigned for her and would prove always to be a dependable ally. He reached Orr by telephone at a beauty shop in downtown Lincoln the morning after the election to offer his congratulations.

Nine months later, Reagan's White House staff would turn to her, and to Nebraska, when the president needed a boost to his spirits in the midst of what became known as the Iran-Contra arms for hostages affair.

And so on one Thursday in August, Reagan flew to North Platte to refresh and revitalize himself in Cowboy Country, surrounding himself with horses and boots and cowboy hats and people waving tiny American flags. 

When he departed for his California ranch, Reagan left with a smile on his face and a brand new Stetson in his hand.

* * *

It was a stormy governorship that began with a baptism by fire.

Two weeks after she took the oath, Orr was blindsided by a public threat from a large Omaha corporation that triggered alarm bells about the state's economic future and set Nebraska sailing into uncharted business tax incentive waters. 

Less than two months later, a U.S. senator stepped outside the Peony Park ballroom in Omaha and was struck by a fatal heart attack. Suddenly, the new governor faced the rare challenge of appointing a new senator, a task akin to a stroll through a political minefield.

Then a tax reform plan designed to uncouple Nebraska's state income tax from the federal tax system -- and make its corporate tax more competitive for Nebraska businesses -- ran off the tracks when the change inadvertently raised some people's taxes and had to be put back on the rails with tax reduction repairs. By then, the political damage had been done.

Meanwhile, a radioactive time bomb landed in the governor's lap when regional plans to site a low-level nuclear waste storage facility in Nebraska grew into a largely unexpected political liability.

All governors face challenges, but this was an embarrassment of riches.

By the time Orr sought re-election in 1990, the business incentive initiative, the tax reform stumble and the proposed nuclear waste storage plant all had turned into political weapons to be used against her. 

And Orr's Senate appointee, David Karnes, had been defeated two years earlier by Bob Kerrey. 

Largely lost in the flood of negative political rhetoric at the time was Orr's landmark creation of the state's first dedicated research funding for the University of Nebraska, an initiative that would set the stage for development of strong research programs at the University of Nebraska-Lincoln and the University of Nebraska Medical Center.

* * *

Even this four-year drama's final act was stormy. 

A winter storm raged through western Nebraska on Election Day, dumping as much as 12 inches of snow and reducing voter turnout in the dependably Republican 3rd Congressional District.

And, incredibly, we learn now for the first time, Orr's campaign consulting firm failed to place the full TV media buy that had been scheduled, forcing her campaign to scramble in the closing days to try to purchase less-than-ideal available time. 

"What we thought was being spent (fell short) by a significant cumulative number," says Doug Parrott, who was communications director for the Orr campaign.

"Not all the advertising was being placed when it was supposed to be," Parrott says, and "so little media inventory was left that we were buying everything we could get."

"Do not minimize how big an impact that potentially had on the campaign," says Parrott, who now is executive vice president of public relations and general manager of Bailey Lauerman in Omaha.

Bottom line, Parrott says: The Orr campaign was not able to deliver its TV advertising message in the way it could have been most effective.

On Election Day, Orr lost to Democratic nominee Ben Nelson by a vote of 292,771 to 288,741, becoming the fourth straight Republican governor to lose a re-election bid.

* * *

Twenty-two years later, Kay Orr is ready to talk.

Occasional efforts during the past few years to get her to sit down and talk about her governorship always were pleasantly, but firmly, rebuffed. 

And then one day she said yes.

Responding to the encouragement of family, particularly her grandchildren, she is ready now.

Does she care what people think about her governorship?

"Yes, I do. What I would hope is that there is a better understanding of what those four years were about.

"People can make their own decisions about evaluating that record, but they can't have a knowledgeable opinion about it unless they know."

Perhaps, on Oct. 26, 1990, as her car rolled down Interstate 80 on the way to Omaha during the final days of her re-election campaign, Orr may have offered her own assessment: "I think I've been a good governor, but I'm not a very good politician."

And today, are the memories good or bad?

"Mostly good. It's human nature. The mother remembers the child, not the labor pain. You look at what you produce."

* * *

Three major players in this drama made themselves available upon request.

None of the three was tied to Orr in a partisan political sense or to the Republican Party. 

Two were state government policy professionals who worked in the Orr administration and now hold key administrative positions at the University of Nebraska Medical Center.

The third was the chairman of the Legislature's Revenue Committee, a state senator who would fit snugly into the definition of progressive Democrat.

All three were involved intimately in negotiations that produced LB775, the business development and job creation package of tax incentives that became a signature marker of the Orr administration and a political lightning rod.

To set the stage: Before Orr even could settle into her new role as governor, ConAgra CEO Mike Harper went public with demands that the state provide business investment and job growth tax incentives or his company was ready to leave the state.

That threat was issued on the heels of the sudden departure of InterNorth (formerly Northern Natural Gas Co.), which abandoned Omaha and moved to Houston, where it would become Enron.

While ConAgra loudly made its case in public, executives and lawyers from other big corporations such as Union Pacific and Peter Kiewit Sons were raising some of the same issues in private conversations that turned into negotiations. 

And it wasn't just Omaha: Quietly, behind the scenes, Goodyear Tire and Rubber Co. officials were warning that they might pull their operations out of north Lincoln if they could not get tax credits for needed improvements at their plant.

* * *

By the time Orr sought re-election, a political debate was raging over the question: Did the new governor and the Legislature ultimately give away too much, diminishing the state's revenue stream, even rewarding some companies for investments they would have made anyway?

There were allegations of corporate blackmail and questions about how much of a factor corporate executive enrichment plays -- or should play -- in decisions about where to locate and whether to relocate a business.

In response, Orr and her supporters pointed to a record of economic recovery that followed adoption of LB775 and accompanying legislation: $2.4 billion in new business investments, new job opportunities and the lowest unemployment rate in the nation.

Legitimate arguments continue to rage today over the extent of business tax breaks as LB775 has morphed into a series of more elaborate and targeted incentives.

Parrott points to the fact that the landscape shaped by Orr essentially remains in place today despite all the controversy at the time. 

The LB775 economic development model and tax reforms fashioned by Orr are "still around," he says. "If they were so bad, why are they still here?"

"She stuck her neck out," Parrott says. "Her governorship is very much underappreciated. She made significant changes that benefited the state." 

* * *

"There was a lot of pressure to move quickly," recalls Don Leuenberger, who was state tax commissioner and a key negotiator of LB775.

"Compromises were made on both sides," he says.

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"She understood the political risks," says Leuenberger, who now is vice chancellor for business and finance at the medical center.

"She was under tremendous pressure from big corporate CEOs and political supporters. But that pressure never passed through to me in going through those negotiations. She backed me thoroughly."

This economic growth agenda was more than LB775, Leuenberger says. Tax reform and university research were part of the package.

"We needed to look at population and demographics," he says, "and where we were going was not sustainable. We needed to diversify desperately.

"State government needed to be a player with industry and the university in shaping economic growth in the state. Planting that idea was very important, not tax breaks.

"We set the stage for the state to play a pro-active role in the economy. It was an exciting time."

* * *

Deb Thomas, another key negotiator, was on the staff of state Sen. Vard Johnson of Omaha, chairman of the Legislature's Revenue Committee.

Thomas, now associate vice chancellor for business and finance at the medical center, is blunt-spoken.

"Frankly, given the situation in 1986, I always have been of the belief that (LB775) saved Nebraska from a recession," says Thomas, who later became director of the Department of Administrative Services and then director of Social Services in the Orr administration. 

Thomas subsequently helped lead Health and Human Services in the Nelson administration.

"LB775 made Omaha what it is today," Thomas says. "It was moving toward the point of who was going to be the last to turn out the lights. 

"Kay took great s--- for it," Thomas says.

"But it was a deal that needed to be done to save our economic base. It was the price we paid to continue to have the opportunity to survive and thrive.

"I give Kay an A-plus. She had the guts to do it.

"I really think she saved the state."

* * *

Vard Johnson, an immigration attorney in Boston today, says Nebraska already had been "buffeted by an agricultural crisis (and) to have Omaha begin to lose its footing economically would, I think, have had a profound effect on our face to the world."

When he went door-to-door in his blue-collar legislative district as a candidate for re-election in 1986, Johnson says, "I heard their worries and their fears about jobs."

"And when Mike Harper made the pitch that ConAgra could relocate, it seemed to me at the time that we were very vulnerable to serious harm."

Johnson also worked with the governor and her key aides in crafting the tax reform package, but LB775 was the key legislation that is remembered today.

"I can tell you that I certainly had reservations about the wisdom of ceding ground on the tax base to corporate interests," he says. 

"But there are times a state such as Nebraska needs to make those kinds of legislative choices so we can face the future with confidence."

"I think it was the right thing to do," Johnson says. 

As the telephone interview winds down, Johnson says there's something more he wants to say.

"Kay Orr was a great governor.

"She took positions that I felt were beneficial for the people of our community. She realized fairly early that the state was not doing well by the university, (and) she worked hard to beef up its academic performance. 

"She was a champion for higher education. I respect that greatly.

"Kay Orr was a doer. She was responsible with power and, by God, I respect that."

Reach Don Walton at 402-473-7248 or


Political reporter

Don Walton, a Husker and Yankee fan, is a longtime Journal Star political and government reporter.

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