Lawmakers debate wheel tax
January 31st, 2011
Omaha, NE – Nebraska lawmakers continued the debate Friday on whether cities should be allowed to impose wheel taxes on commuters. Â The discussion is pitting Omaha senators against many of their statewide colleagues.
When Omaha introduced a $50 wheel tax on nonresidents who commute to work in Omaha, it was an unpopular move with surrounding cities, and some have filed legal challenges against it. The tax was passed to take effect at the first of the year and to increase revenue for Omaha road maintenance, which is currently allowable by law. Newly elected State Senator Bob Krist of Omaha challenged Senator Abbie Cornett of Bellevue, who introduced the bill to change that law. He asked if the bill, which is retroactive to take effect January 1st, directly targets Omaha.
â€œIt is not targeted at Omaha,â€ Cornett said. â€œItâ€™s targeted at the people who live outside the jurisdiction to keep them from paying a tax in a jurisdiction they do not live in.â€
â€œSemantically, itâ€™s targeted at the people who make decisions in Omaha,â€ Krist responded.
â€œSenator Krist, it sounds like youâ€™re trying to pick a fight with me,â€ Cornett said. But Krist interrupted her to say, â€œAbsolutely not, Iâ€™m just trying to put it on the record that this is targeted at Omaha.â€
â€œItâ€™s targeted at bad tax policy,â€ Cornett countered.
Senator Brad Ashford of Omaha urged the Legislature to consider the cityâ€™s financial situation, and the burden repealing the tax would take. He said Omaha didnâ€™t have many alternatives to boost revenue.
â€œThe alternative was to raise sales tax,â€ he said, â€œbut of course the Legislature wonâ€™t give us the authority to raise sales tax.â€
Ashford asked the Legislature not to â€œput the city of Omaha in any more jeopardy than it already is.â€
â€œIf youâ€™re going to change the wheel tax, donâ€™t do it in the middle of a budget year,â€ he said. â€œGive the city of Omaha the opportunity to react.â€
But the Senator from Bellevue countered there are many other revenue options, and noted Omaha could still raise property taxes, while many other Nebraska cities have hit their tax lids.
â€œWe all understand the financial situation the city of Omaha is in,â€ Cornett said. â€œWe all understand their unfunded pension liability.â€ But, she emphasized, â€œThat is their unfunded pension liability.â€
Concerns were also raised about how the tax would be collected. Omaha Senator Brenda Council noted the city already has a tax in place for nonresidents within a three mile radius, and has been able to collect it since 2006. The debate took up all of the morning at the Capitol. Lawmakers adjourned without taking action, and will likely return to debate next week.
Comments are closed.