10% tax hike nearly certain

Omaha taxpayers will see their property tax bills rise next year because city leaders haven't been able to find an alternative to a 10 percent hike in the city's tax rate.

“It comes back to what I thought we ought to do in the first place,” said City Councilman Ben Gray, who has pushed for a tax increase in recent weeks.

Other council members have opposed raising the property tax. But even they acknowledged Thursday that it seems inevitable, given the lack of support for alternatives such as a satellite dish fee or an entertainment tax.

“It's regrettable,” said Councilman Pete Festersen, who has consistently opposed property tax increases.

In all, the owner of a house valued at $100,000 for tax purposes will pay about $42 more in city property taxes — from $434 to $476. City taxes are less than one-fourth of the total property tax bill.

Here are the reasons for the likely increase:

--Mayor Jim Suttle raised the tax rate by 2.4 cents per $100 of valuation to help pay debt for city projects such as the Qwest Center Omaha. Council members questioned the plan but were barred by the City Charter from rejecting it.

--Suttle on Thursday vetoed two large budget cuts passed last week by the council. The council appears to lack the votes to override those vetoes, so the $2.6 million in spending will be restored to the budget. Under the city's charter, the property tax rate must increase about 1 cent to make up for those vetoes.

--The council's package of changes to the budget called for raising $2 million through a new satellite dish inspection fee. The council still must vote to implement the fee, however, and it appears that there aren't enough votes to do so. Again, the property tax rate must increase, by about 0.8 cents, to cover that missing revenue.

In all, the tax rate would go up about 4.2 cents per $100 of assessed value from the current rate of 43.4 cents.

The city needs to complete its budget by Sept. 18, making it too late in the process to offer new spending cuts.

The last chance to head off the tax increase is a revived version of Suttle's proposed entertainment tax. That will be up for a public hearing Tuesday along with the satellite dish inspection fee.

But the council already has rejected multiple versions of an entertainment tax, and there's no evidence that their positions have changed.

“I would still vote against it,” Councilwoman Jean Stothert said. “We've been there, and we've done that. It will be voted down again.”

The property tax picture became clearer Thursday after Suttle vetoed council proposals for voluntary, 2½-day furloughs for all city employees and a cut in funding for new police cruisers.

Suttle said he vetoed the furlough plan because it would be “cumbersome, if not impossible” to implement. He said he struck down the police cruiser cut because new cruisers are an “important investment for the safety of both our public safety officers and our citizens.”

The council will need five of its seven votes to override the vetoes at Tuesday's council meeting.

Council President Garry Gernandt and Gray said they agree with the mayor's vetoes. In addition, Councilman Chuck Sigerson isn't expected to attend the meeting because he is recovering from a recent stroke and heart attack.

That means the council won't have enough votes to override the vetoes.

Suttle was cool toward the satellite dish fee, saying he didn't consider the $2 million revenue estimate to be realistic. He also questioned whether the fee is legal.

But the City Charter does not allow the mayor to veto individual revenue items that the council places in the budget. So the fee remains there — although it still needs council approval before any money can be collected.

At least three council members — Stothert, Festersen and Franklin Thompson — are opposed to the satellite dish fee. Gernandt said he's leaning against it.

Gernandt said he has received overwhelmingly negative reaction to the proposed $50 satellite dish inspection fee, which was put forth by Councilman Chris Jerram.

Gernandt said that “99 percent of my calls and e-mails are adamantly opposed, and I've heard that from a couple other councilmen.”

He said residents have called the fee the “stupidest idea ... ever produced in government.”

Stothert said it's unfortunate that rejecting the fee at this point will result in higher property taxes. She said she was “extremely disappointed” that more research hadn't been done about whether the fee would be legal or feasible before it was put before the council.

“It's not a viable alternative to increase revenue,” she said. “We should have known that. It really puts us in a spot.”

Contact the writer:

444-1149, tom.shaw@owh.com

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