It’s the tax that drivers love to hate.
And as Omaha Mayor Jean Stothert initiates a public discussion about increasing street funding, she’s already come out against increasing the wheel tax. “I WILL NOT SUPPORT,” the mayor outlined in her public presentations this week.
Omaha’s wheel tax remains an important revenue source for the city in fixing its streets.
But it doesn’t strictly fund road construction. The assessment — what’s officially known as the motor vehicle wheel fee — contributes to the entire city streets budget, helping fund street resurfacing but also snow and ice removal and traffic signals.
In some ways, the City of Omaha remains hampered by its 2010 attempt to increase street funding by expanding the wheel tax.
The City Council — without then-Councilwoman Stothert’s support — increased the rate and expanded the tax to all Omaha commuters, not just those who live in Omaha. Mayor Jim Suttle sought the higher funding at a time of increasing costs for resurfacing and for pothole repairs.
The idea was to tap into funding from suburban residents who use city streets commuting to jobs in Omaha.
But it sparked outrage in Sarpy County, and ultimately, the Nebraska Legislature prevented Omaha from expanding the “commuter wheel fee.” In doing so, the Legislature also took away Omaha’s ability to collect the wheel tax from thousands of people living outside the city limits but within the city’s zoning area.
The city could increase the wheel tax without a public vote, but Stothert told The World-Herald that she wants the people to decide about street funding. She said it’s important that a long-range funding plan have buy-in from taxpayers.
She’s raising the possibility of a $200 million bond issue to fund street rehab, with subsequent bond proposals to follow in the future.
“Taking it to a vote of the people is important,” she said.
In 2019, the wheel tax is budgeted to bring in $23.6 million for the City of Omaha — a figure that has benefited from the last increase from $35 to $50 and an increase in the number of vehicles being taxed as Omaha has grown.
At Stothert’s public meetings this week, some people again suggested that Omaha find a way to collect revenue from all drivers using the streets, not just Omaha residents.
David Krause, who lives outside city limits, suggested some type of countywide gas tax or countywide wheel tax to fund streets. He said he would like to see the revenue source relate to road use.
“You’re not taxing all the users of the highways,” he said.
Mark and Sandy Tillwick said they prefer using sales taxes because that would collect revenue from more taxpayers.
(Omaha would need legislative approval for greater sales tax authority, then voter approval of the increase itself. Increasing the sales tax also would automatically sunset the restaurant tax and its $34 million in revenue, said Stothert, who opposes using sales taxes for greater street rehab.)
The Tillwicks said they already pay enough property taxes and enough taxes to register their vehicles, even if only part of that is the wheel tax.
“I don’t like paying what we’re already paying,” Mark Tillwick said.
Councilman Chris Jerram, who introduced the wheel tax increase and expansion in 2010, said his thinking has evolved to favoring putting a bond issue before voters.
“If the people reject it, then we can consider our options,” he said.
The City of Lincoln’s wheel tax is $74. Stothert said increasing Omaha’s rate to match Lincoln’s would generate just $11.3 million in additional revenue.
The city needs an additional $34 million a year to fund street maintenance and rehab, she said.
To reach that level, Stothert said, Omaha’s wheel tax would need to increase to $122.
Stothert said it’s important to have an ongoing, sustainable plan.
“We’ve never had a plan like that,” she said.
World-Herald staff writer Aaron Sanderford contributed to this report.