Nebraska county faces $30M court judgment

90-minute drive from Omaha, is mostly cropland.

Bankruptcy is “definitely an option on the table,” said Myron Dorn, the county board’s chairman, but it’s not clear how that would work.

Nebraska’s constitution caps how much revenue can be raised from property taxes, and Gage County could raise only about $3 million more before hitting the legal limit. Although residents could vote to go higher, chances of approval are slim in a place where median household income is about $35,000 and farmers are struggling with low commodity prices. Don Schuller, a 61-year-old farmer, said paying off the judgment in one year would cause the county portion of his tax bill to quadruple.

“I think for a lot of people in Gage County, the unknown is the part that’s giving them the most stress,” Dorn said. “We get all kinds of questions about what’s going to happen. And, well, we just don’t know yet.”

When Detroit faced bankruptcy, it had valuable assets like the art in the city’s art museum, although private donations helped avert a sale of masterpieces.

In Gage County, the assets consist mostly of the courthouse, bridges and roads.

“You need those things to keep the county functioning,” said Larry Dix, executive director of the Nebraska Association of County Officials.

Attorney General Doug Peterson has rejected the idea of a state loan, and the county’s insurance companies say the judgment isn’t covered.

“I just hate the thought of them holding the citizens accountable for that money,” said Nick Jurgens, who owns a computer repair shop on Beatrice’s main drag. “It wasn’t really any of our faults.”

But Jeffry Patterson, who litigated the case for the wrongly accused, said it has to find a way to pay up. “Some of our clients are not in good health,” he said.

If Gage County files for Chapter 9 bankruptcy, it will follow the path taken by Jefferson County, Ala., in 2011. Jefferson County had to lay off employees, close a hospital and sell a nursing home, among other assets, to defray a $4.2 billion debt.

Gage County has little to sell.

“Wow,” said David Carrington, a commissioner in Jefferson County. “They’re in real a mess.”

NATI HARNIK/AP Farmer Don Schuller estimates his county property tax bill could quadruple if officials pay the award in one year.