Sales tax debate: Round one

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April 18th, 2011

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Lincoln, NE – Should cities in Nebraska be allowed to raise sales taxes? Governor Dave Heineman says no. But the lead senator pushing the idea, Omaha’s Brad Ashford, isn’t backing down.

Omaha Senator Brad Ashford says he thinks he has the votes to get around Gov. Dave Heineman's promise of a veto, and put a sales tax option on the ballot for voters.

Last week was Round One: Senators voted 27-13 to advance a bill sponsored by Senator Brad Ashford of Omaha. The legislation would let every city in Nebraska increase sales taxes by half a percent – some by more, if they’re below the current maximum of one and a half percent. But there would an important caveat: local voters would have to approve. Ashford says that’s key.

“The point is to let cities do what they wish. And let the constituents, my constituents, have a say in what tax policy in our city is.”

Ashford said Omahans might vote to pay more sales tax in place of some alternatives.
“In Omaha I think we’ve seen an increase in property tax, an increase in restaurant tax, and I think the citizens would gravitate toward something that would reduce those taxes.”

Under the bill, a city could simply ask voters if they wanted to shift taxes they pay now from property to sales. But Governor Dave Heineman suggested tax increases are more likely, and said the Legislature should not pass Ashford’s bill.

“If this bill does not pass, there will be no tax increase. If it passes, there will be the possibility of a tax increase, particularly on the citizens of Omaha. Twenty seven senators voted for this bill, and the simple fact is, they are enabling a tax increase.”

Ashford said Heineman’s opposition makes his task harder, but not impossible. He goes through the legislative math. It takes 25 votes to pass a bill, and 30 to override a governor’s veto.

“He has five votes, in effect. With a veto, it takes 30 votes to override – he has five, and each of us has one. So if we get 30 votes, then the bill becomes law.”

There are still two more rounds of voting before it would get to that point. Meanwhile, Ashford said his job is to persuade his colleagues that this is good policy. That’s likely to produce plenty of argument from those who say allowing tax increases is the wrong way to go.

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