LINCOLN — Omaha and Lincoln representatives reacted negatively Wednesday to a proposal to further rein in municipal powers to impose occupation taxes on restaurant bills, motel stays and car rentals.
They characterized a proposal to require voter approval of all new or increased occupation taxes as another attack on the authority of cities and villages to finance government services.
"Last session was really hard on all municipalities. This is piling on," said Don Wesely, a former Lincoln mayor who now lobbies for that city.
Jack Cheloha, the City of Omaha's lobbyist, said that city council members are elected to make decisions such as raising taxes and that voter approval isn't required for tax decisions made by Congress or state senators.
"That's a little ironic," he said.
State Sen. Deb Fischer of Valentine introduced her proposal Wednesday to require cities and villages to obtain voter approval before enacting or raising occupation taxes. The specific purpose of the tax would have to be listed on the ballot, as well as a "sunset" or termination date for the tax.
Fischer, a GOP candidate for U.S. Senate, said her proposal isn't about ending occupation taxes or adversely affecting cities but about making the process more open.
"People are too busy. They can't attend city council meetings," she said. "If something is on the ballot, then they're aware of it."
Fischer compared it to school boards, which must gain voter approval for bond issues to build new schools.
The conservative group Americans for Prosperity-Nebraska endorsed the bill, noting the grumbling and controversy over Omaha's restaurant tax.
"Fischer's bill protects taxpayers from excessive taxation by ensuring a vote of the people before controversial taxes are foisted on the public," said Brad Stevens, the group's state director.
Legislative Bill 745 comes a year after Fischer won approval of a bill capping occupation taxes on phone bills.
In addition last year, state aid to municipalities ended, and Omaha's ability to levy a wheel tax on nonresidents was pared back. A proposal to allow cities to increase local sales taxes by a half-cent, with voter approval, also bogged down.
Omaha Sen. Beau McCoy introduced a bill Wednesday to ensure that Omaha could not impose taxes or fees beyond its city limits. That would make permanent a compromise reached last year in which, at the end of this year, Omaha must drop its wheel tax on those who live within its three-mile zoning jurisdiction.
McCoy, who lives in the zoning jurisdiction, said his constituents complain regularly about being subjected to an Omaha tax when they can't vote for City Council members or the mayor.
A representative of the League of Nebraska Municipalities said cities are preparing for another fight over restricting their powers of taxation. Gary Krumland said the organization believes that in a representative democracy, elected officials shouldn't have to seek voter approval for every decision.
"These decisions are made at open meetings that have public notice and agendas," he added.
Occupation taxes have become more widespread in recent years, particularly for specific projects. Grand Island enacted one on restaurant and bar bills to help finance the Nebraska State Fair's move there.
Norfolk voters approved one for a new swimming pool and ballfields, and Lincoln voters approved a similar tax to help finance its Haymarket arena. Two months ago, voters in Kearney rejected one by a 2-to-1 ratio.
Such taxes can bring in big money: Omaha anticipates collecting $19 million from its restaurant tax in 2012, about $4.3 million more than projected.
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