Council approves reduced cigarette tax
October 2nd, 2012
Omaha, NE – The Omaha City Council approved a reduced cigarette tax hike today to help pay for a new multi-million dollar Cancer Center in Omaha.
Reduced to three percent, from the original seven percent proposed, the tax should raise the price on a $5 pack of cigarettes by about 15 cents. It would take the form of an occupation tax imposed on tobacco sellers and would help raise about $35 million for the University of Nebraska Medical Center over 10 years. That would help them build a new $370 million campus that would combine cancer research and treatment in Omaha.
Councilmember Jean Stothert joined the minority to vote against the tax. She introduced two amendments to send the tax to a public vote and delay the council’s decision but both were rejected. “Since this ordinance has become public, we have all heard from thousands of people,” Stothert said. “We’ve heard from the grocery industry, the convenience stores, the gas stations. We’ve heard about the negative impact on the retailers. We’ve heard about the negative impact on low-income people of our city.”
Stothert said calls to her office have been “one thousand to one” opposed. “And yet after we hear all these people, we seem to be sending a message here that we’re kind of turning a deaf ear to this,” she said. “That we think we know better about what to do about how to spend the taxpayer’s money, and that concerns me.”
Stothert, who was joined in opposition by Councilmember Franklin Thompson, said she supports the Cancer Center, but the council should find another way to help UNMC construct it. She suggested the city couldn’t afford a new tax because of financial challenges that include an underfunded pension liability and a federally-mandated sewer overhaul project with a billion-dollar-plus price tag.
But Council President Thomas Mulligan said those challenges should not stand in the way of development, and he said the project would provide what the city needs most: jobs.
“The Greater Omaha Chamber is supportive of the Cancer Center project and of the city’s contribution to the project,” Mulligan said. “An economic development opportunity of this magnitude cannot be allowed to slip away.”
Mulligan said the project’s leaders, including Omaha businessman Mike Yanney and University President J.B. Milliken, say the project may not happen without the city’s assistance. “So just as the Century Link Center project Omaha and TD Ameritrade Park Omaha have helped transform downtown, this project will provide another welcome economic boost to the region,” he said.
At a press conference earlier this week, UNMC said the new Cancer Center, which will be built near the University’s current campus in midtown, will create 1,200 new jobs at the facility and 3,457 indirect jobs in construction and surrounding development. The tax passed on a vote of 5-2.