Excessive taxes.
It's the first reason listed on the petitions to recall Omaha Mayor Jim Suttle. And there's no question that taxes have gone up since he took office in June 2009.
By the end of 2011, Suttle's tax hikes will have raised a total of $56 million in new city revenues.
Property tax rates are up 15 percent. The wheel tax rose from $35 to $50. And restaurant and bar tabs are subject to a new 2.5 percent tax.
To critics, the increases prove that Suttle is too quick to raise taxes and ought to be recalled in the Jan. 25 election.
To Suttle and his supporters, the tax hikes show that he has been a decisive leader willing to fix the city's problems — right away — even if the solutions aren't always popular.
“I'm not going to play the political game,” Suttle said in an interview last week.
Suttle's fiscal and tax record suggests he could have deferred a majority if not all of his tax increases for a year or two. That might have bought him more time to build support — and kept him from raising taxes on Omahans during a major recession.
Eventually, however, the city's fiscal challenges might have caught up with Suttle or any mayor.
Even Councilwoman Jean Stothert, a staunch opponent of Suttle's tax hikes and other policies, acknowledges that problems such as the massive shortfall in the police and fire pension fund would have required substantial taxpayer money.
She disagrees, however, with the mayor's approach.
“You first have to prove to taxpayers that you have reduced spending as much as possible,” Stothert said.
When he took office, Suttle faced an array of serious budget challenges: the pension shortfall, sharp increases in health benefit costs, looming debt payments for the Qwest Center Omaha and a recession that sapped the city's tax revenues.
“The city finances were a mess,” Stothert said.
Previous city leaders had cut property tax rates too much when times were good, she said, and left Omaha without adequate cash reserves to cope with the recession.
Meanwhile, Suttle said, the city's streets had deteriorated because Omaha officials had failed to spend enough annually on resurfacing work.
The mayor took on all those concerns, and most of his solutions called for extra money.
Suttle also made some spending cuts and sought to make city government run more efficiently. He pushed employees for pay freezes and tried to make retirees pay more for their health benefits.
But he didn't shy away from tax hikes to maintain city services, meet obligations such as debts or pensions, or even launch new initiatives.
Specifically:
» In 2009, Suttle initiated a property tax hike to start repaying the city's Qwest Center debt. He could have put off the tax hike for at least a year. If he had, Omaha taxpayers would have paid $5.4 million less through 2011 — although future taxes probably would be higher.
» In 2010, Suttle won approval for an increased wheel tax to pay for better snowplowing, more pothole filling and additional street resurfacing. Postponing that initiative would have saved motorists about $9.5 million in taxes through 2011.
» And if Suttle hadn't begun to plug the $600 million hole in the police and fire pension fund, he wouldn't have needed the controversial restaurant tax that arguably has been the biggest lightning rod for critics. By the end of 2011, the restaurant tax could bring in about $18 million.
Suttle said he doesn't regret any of his tax hikes. While some people — including a few of his own advisers — suggested he should wait, he said the result would have been worse for the city.
In addition, he said, a few business leaders had told him privately he would be wise to get all his difficult decisions over with at once, like ripping off a bandage in one motion.
Their advice, he recalled: “Take all the pain now.”
Recall leader Jeremy Aspen and other critics say Suttle wasn't wrong to deal with the city's problems, but they say he came up with the wrong solutions. They say the mayor should have cut spending rather than increase taxes — although critics often don't outline specific cuts.
“It's very easy to balance a budget by raising taxes,” Stothert said. “But in a recession, when people are having that much trouble, is that the right thing to do to your citizens?”
And Suttle's strategy of using multiple small tax hikes didn't allow him to “take all the pain” of raising taxes in a single action.
“A little wheel tax, a little property tax, a little restaurant tax — by then, you've raised taxes three times,” Stothert said. “It's that piling-on effect.”
Aspen agreed. While the restaurant tax, in particular, “put a lot of people over the edge,” he said the number of tax increases resonated with people who signed the recall petitions.
“It just felt like there was never going to be an end to new taxes and large taxes,” he said.
Whether or not those tax hikes result in Suttle's removal from office, they certainly were among the reasons why nearly 29,000 Omahans signed recall petitions.
But Suttle said he knew last fall he had made the right decision after Omaha's finances received an improved assessment from national bond rating agencies. He said his willingness to address the Qwest Center debt and pension problems were key factors.
Suttle said someone once asked him whether he thought his tenure as mayor would leave a signature mark on the city's landscape — a ballpark or a major public works project.
At the time, he said, he shrugged off the question.
“But now I know what my legacy is,” he said in his office last week. “Jim Suttle brought financial stability to the city's finances.”
Contact the writer:
402-444-1114, paul.goodsell@owh.com
Copyright ©2012 Omaha World-Herald®. All rights reserved. This material may not be published, broadcast, rewritten, displayed or redistributed for any purpose without permission from the Omaha World-Herald.
