City Council members last night approved two new occupation taxes to offset the loss of more than 600,000 dollars revenue in sales taxes and state aid confiscated by the state of Nebraska.
The two taxes, a two percent tax on lodging and a one percent tax on restaurants (and other prepared foods like the deli at Safeway and Walmart) and liquor sales is designed to attract up to an additional 250-500k in revenue. This revenue would be designated for street improvements unless City Council adds language that allows them to redirect funds to other purposes. Council did not take up a third tax which would have placed a half percent increase on all grocery items.
Tom Dorwart Sr. addressed the council in direct terms about how they always look for tax increases, but never spending cuts. I generally agreed with his sentiment, but in this case, the outrage from the public probably led to additional pressures to reduce spending and each department was able to bring savings to the table.
Gary Person presented information that indicated the levy increase for the upcoming year was projected at 0.00 percent. The City budget actually is slightly smaller next year by several thousand dollars.
Arguments presented by the tourism board director were made that a 2 percent increase in the occupancy tax may result in the loss of business for the purpose of conventions. He also added that if a reduction in business were seen, it could adversely affect the employment of those businesses.
I told City Council that the amount of money they were going to get wasn't going to offset the decline of the city streets and that the tax would be a permanent fixture. When asked to estimate when the city streets would be repaired from the proceeds Gary Person indicated that the tax would be necessary forever..
While recognizing the issue with the state taking money from us is creating a problem, I also reminded City council to consider placing a moratorium on Capital spending for the next several years so we can absorb all of the increases that have come too us from the Federal Government (EPA on the waste water plant) and state losses though unfair tax collection policies. Those suggestions fell on deaf ears, but the conversation turned heated when I referenced the Fire Truck and its lack of use.
Mike Palmer took exception noting that it was a safety issue and if it saves one life, it is worth it. My issue is not now, nor has it ever been with the Volunteer Fire Department or its members. My point is what was done to validate the need and were alternatives fully considered before outlaying more than a million dollars for a truck that arguably has seen very little use other than a training mission and several parades. Palmer and I spoke at length after the meeting and I believe that we were able to reach the understanding that the mention of the truck purchase led the conversation astray from the idea that the locality needs to watch what it wants to spend because we are often at the mercy of the State and Federal edicts. Palmer understands that I am not begrudging the equipment necessary to provide safety for those who put themselves at risk for all of us, but that the decision to purchase anything should be done so after careful consideration of all the options and cost considerations are properly vetted.
I do not envy the job the Council Members have to do. The balancing act they must maintain in providing the services necessary to maintain and grow a community are now coming into conflict with the stark reality that the State of Nebraska and the Federal government do not care that much about low population centers.
Ken Schilz will have a tough couple of years of dues paying to become a truly effective member of the legislature in Lincoln. The sad truth is that the rural parts of the state are probably going to always get the short end of the stick when it comes to the redistribution of the states tax wealth. It rolls downhill in that Nebraska suffers from a low population and that is most keenly evident in the stimulus amounts to the state. It is a shame that we couldn't have gotten a few shovels ready and marched on Washington to protest the lack of support this country gives middle America...
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