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 councilâ€™s decision but both were rejected. â€œSince this ordinance has become public, we have all heard from thousands of people,â€ Stothert said. â€œWeâ€™ve heard from the grocery industry, the convenience stores, the gas stations. Weâ€™ve heard about the negative impact on the retailers. Weâ€™ve heard about the negative impact on low-income people of our city.â€
Stothert said calls to her office have been â€œone thousand to oneâ€ opposed. â€œAnd yet after we hear all these people, we seem to be sending a message here that weâ€™re kind of turning a deaf ear to this,â€ she said. â€œThat we think we know better about what to do about how to spend the taxpayerâ€™s money, and that concerns me.â€
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 couldnâ€™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.
â€œThe Greater Omaha Chamber is supportive of the Cancer Center project and of the cityâ€™s contribution to the project,â€ Mulligan said. â€œAn economic development opportunity of this magnitude cannot be allowed to slip away.â€
Mulligan said the projectâ€™s leaders, including Omaha businessman Mike Yanney and University President J.B. Milliken, say the project may not happen without the cityâ€™s assistance. â€œSo 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,â€ he said.
At a press conference earlier this week, UNMC said the new Cancer Center, which will be built near the Universityâ€™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.