Omaha may get sales tax flexibility
March 16th, 2011
Lincoln, NE – A proposal to let cities raise sales taxes if voters approve is headed to the full Legislature.
The sales tax bill is sponsored by Senator Brad Ashford of Omaha, a city thatâ€™s tried various approaches to deal with its budget problems. Currently, Nebraska cities can tack a local sales tax of up to 1.5 percent onto the current state rate. This proposal would let cities tax another 0.5 percent, raising the maximum combined sales tax rate to 7.5, if local voters approve.
The proposal comes at a time when the stateâ€™s eliminating aid it had been giving to cities to help balance the state budget. Supporters of the change, including Sen. Abbie Cornett of Bellevue, chairwoman of the Revenue Committee, said this is a better approach.
â€œThis is for the voter to decide whether they feel this is an important necessity for their city,” Ashford said. “And if they donâ€™t feel that, then they donâ€™t pass it, and the city has to either cut or raise property taxes. It makes the local official directly responsible to the taxpayer.â€
The advancement of the bill could put the Legislature on a collision course with Governor Dave Heineman, who has opposed the idea.
On the legislative floor, where budget cutting has been the dominant theme this year, senators advanced a proposal to increase general fund spending to help small businesses by $11 million over the next two years. The bill got first round approval on a vote of 39-0.