Published Tuesday, September 11, 2012 at 1:00 am / Updated at 9:24 am
Editorial: Are tax dollars the answer?

There is little doubt that a comprehensive center to treat cancer patients and do cutting-edge research would be good for Omaha and Nebraska.

The University of Nebraska Medical Center's project would be unique in the region, bringing some 1,200 high-paying jobs and $100 million in revenues. It could elevate UNMC to a place among the nation's top cancer research and treatment facilities and provide top-notch health care.

Which is why the Nebraska Legislature put $50 million in taxpayer money behind this ambitious plan.

But city and county officials should take a deep breath before rushing to spend more tax money on the project.

The project would include a $110 million research tower, a $63 million, 108-bed inpatient center and a $150 million outpatient center. A $47 million ambulatory, or nonemergency, care center also is planned.

When this was announced in January, university officials said they would seek $50 million from the state and that some $200 million more was expected from private donors and “other sources,” with the Nebraska Medical Center incurring $120 million in debt that would be paid off over time with hospital revenues.

So the article by World-Herald reporters over the weekend that UNMC now is asking Omaha and Douglas County taxpayers to kick in another $40 million comes as a surprise.

If this much more were going to be asked of taxpayers, why wasn't that made clear from the start?

The Douglas County Board could vote as early as today on providing $5 million over 10 years from inheritance taxes. And a proposed city ordinance is being drafted that would add an occupation tax of about 35 cents per pack of cigarettes on top of state taxes to fund a $35 million city contribution over 10 years.

While death and taxes are inevitable, the inheritance tax isn't a predictable source of funding from one year to the next. And while state legislators this year shelved a proposal to eliminate the inheritance tax — following pleas from many Nebraska counties that they would have to raise property taxes to make up the difference — that idea no doubt will be back. If the inheritance tax were eliminated, how would Douglas County make good on its pledge?

On the city's side, nonsmokers probably won't care if a new tax is placed on tobacco. But imposing a new city tax for an economic development project at a time when Omaha faces many other fiscal challenges — including the $2 billion sewer overhaul and underfunded pension obligations — raises some troubling questions.

Before taxpayers are asked for more money, they first should be told specifically why the $200 million in private donations hasn't materialized. Then, perhaps, options could be examined.

NU President J.B. Milliken had said during the legislative session that if the state funding didn't come through this year, construction on the UNMC project could be done in stages, beginning with other sources of money.

Could the start of construction, which could come as soon as next year, be delayed while funds are raised? Could the project still be undertaken in stages? Could some aspects of the project be scaled back until sufficient private funds are raised? The city's restaurant tax, implemented in 2010, has exceeded revenue expectations. Could a portion of those funds be used for an economic development project with this much merit?

The UNMC cancer center has the potential to transform the city's and state's economic future. The public and private sectors should continue to work together to get this done. But taxpayers deserve to know exactly why they're being asked to invest more money than they already have.

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