A proposed restaurant and drinking places occupation tax was met with mixed reviews during the Aug. 20 La Vista City Council meeting.
The proposed 1.5% tax would be calculated as a percentage of gross receipts of a restaurant or drinking place from the sale of food and beverages. It would apply to any restaurant or drinking place such as cafes, bakeries, coffee shops, food trucks and caterers as well as restaurants or drinking places in grocery or convenience stores. It would apply to both alcoholic and non-alcoholic beverages.
Money collected from the tax would be put toward the city’s general fund. La Vista projects it would collect up to $700,000 annually.
Council held the first reading of the proposed ordinance and after adding some additional language, will have the second reading at its Sept. 3 meeting.
The Council, if it waives the third reading, could vote on the ordinance that evening, Otherwise, it would be up for a vote at the Sept. 17 meeting.
The City introduced the plan several weeks ago and has been met with both support and blowback. One of the harshest critics has been Nebraska Gov. Pete Ricketts, who said the tax was bad for families and businesses and urged council members to vote against it.
La Vista Mayor Doug Kindig defended the city’s plan for the tax during the meeting, saying that although he never wants to see taxes raised, this proposed tax could help the city for many years down the road.
“I apologize things became public between the governor and me,” Kindig said. “This is not a thoughtless tax. I wish we had a gold pot we could dip into, but this is something that is necessary to allow us to continue with current projects, and not just those on 84th Street.
“That $700,000 we generate will be shared by the metro area and I won’t be surprised if 70 to 80 percent of that is paid by out-of-towners. I don’t like raising taxes, but I do like setting the city up with a diversified tax base for the next generation.”
During the public hearing, both business owners and residents voiced support and displeasure for the proposed tax.
Dean Podoll, a 15-year La Vista resident, believes the tax would be a valuable source of income.
“Like any resident, I’m not a huge fan of taxes,” he said. “But I have seen this city be good stewards of our money and I would like to think that the money derived would be money well-spent and continue to provide the services we have as citizens.”
Melissa Davis said in her job of taking care of elderly and disabled individuals, the tax would have a negative impact on their quality of life.
“I have clients that are living on Social Security, Medicare and Medicaid and I want them to have the freedom to still be able to go out and eat,” she said. “I believe something like this should be put before a vote instead of forced upon us.”
Jeff Harwood is the owner of Mama’s Pizza in La Vista. He has gone through a restaurant tax with his other two establishments in Omaha, but believes La Vista should maintain its current position.
“One of my concerns is the reputation of the city,” he said. “La Vista already has high property taxes, and now you’re going to add another tax? The first thing that will come to people’s minds about La Vista will be taxes and I’m not sure that’s the kind of reputation we want.”
Harwood said “one of the best moves we’ve made” was coming to La Vista, but he’s not sure other potential business owners will feel the same.
“I think when they see Papillion doesn’t have this tax and it’s only six blocks away, it might be a factor in them going there,” Harwood said.
Six of the seven council members present showed support for the tax, with only Mike Crawford stating he would vote against it.
“We’re trying to keep homeowner taxes down, but still offer services to attract people,” Councilman Kelly Sell said. “I’m not opposed to collecting money that doesn’t put a burden on our property tax payers.”
Councilman Ron Sheehan agreed the tax could have a larger source of revenue drawn from people outside of La Vista.
“With the developments we have coming, we’re going to get people here,” he said. “Every dollar they spend is money our residents don’t have to spend.”
One amendment that will be added to the ordinance is a 2% fee that will be given to restaurants to help cover the costs of processing debit and credit cards. That would amount to about $15,000 each year (of the estimated $700,000) the city would be giving back to the establishments, a very small consolation prize according to Harwood.
“They are throwing us a very little bone,” Harwood said.