City officials told: Don't raise taxes

Several Omaha business leaders and elected officials say they would prefer additional cuts in city services over higher taxes as a solution to the city's budget crisis.

Few offered specific cuts, though.

One who did was Richard Bell, chairman of HDR Inc., who said Saturday he wouldn't mind if the city stopped picking up yard waste — an idea being considered by Mayor Jim Suttle and which would save $4 million in the 2010 city budget.

“Certainly, I don't like taxes,” Bell said. “Nobody does.”

Bell is a member of the Greater Omaha Chamber of Commerce board of directors. Suttle met with the board Friday to outline his proposals for addressing a $5 million shortfall in the current budget and a projected $11 million gap in next year's budget.

The city's budget problems are due for the most part to lower-than-anticipated revenue during a national recession — especially sales tax receipts, which are expected to drop for the first time this year.

Suttle also has met with City Council members to go over the budget and tax matters.

Suttle's ideas include a property tax increase and two new taxes — a 2 percent tax on entertainment, including restaurants and bars, and an occupation tax that would collect $2 a month from everyone who works in Omaha and a equal amount from their employers.

Suttle has not decided for certain that higher taxes are necessary, but city officials say the alternative could be painful cuts in services such as closing library branches, eliminating police recruit classes and dropping yard waste collections. The mayor also is looking for budget savings by planning to negotiate a wage freeze with city employee unions.

With a total of $14 million already being slashed from the 2009 budget, city officials say there might not be much left to cut. But Councilman Chuck Sigerson was unconvinced Saturday.

“Are we to the point where there's nothing left?” he asked. “Maybe we should be concentrating on cutting spending and not throw in the towel and raise taxes.”

While Sigerson didn't say what should be put on the chopping block, he does favor seeking legislative and voter approval to raise the city's sales tax rate — a move that would help shore up the budget and address other major financial issues: the $500 million shortfall in the police and fire pension fund and the debt from the Qwest Center Omaha.

Councilman Pete Festersen said the city needs to get through the 2009 and 2010 budget problems without a tax hike. “We may have to go without some services for a time,” he said.

Festersen also supports freezing all city wages this year and next.

Business owners in the past have opposed entertainment and occupation taxes.

Nebraska Furniture Mart Vice President Bob Batt said the city needs to skip the tax increases and instead hold off on building projects until the economy turns around.

“They say they are making hard choices but I have yet to see that,” he said. “They need a review of what the city is involved in and decide what they can live without at this present time.”

Bell, of HDR, said he'd rather have the city charge a monthly garbage fee instead of raise his property taxes.

“Omaha is one of the few major cities in the country that doesn't charge a garbage fee,” he said. “I've wondered about that one for 30 years now.”

Contact the writer:

444-3100, maggie.obrien@owh.com