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CAPITOL VIEW: Gov. Heineman yet to veto bill allowing towns to raise taxes PDF Print E-mail
Written by Wauneta Breeze   
Thursday, 21 April 2011 21:02

Possibly to avoid being trite, Gov. Dave Heineman has stopped short of asking Omaha Sen. Brad Ashford: “What part of NO! do you not understand.”

He could ask the same of Mayor Jim Suttle and other people and organizations who want Nebraska communities to be able to vote – if they want to – on whether to increase their local sales tax rates to a maximum level of 2 percent.

This issue is important now and could be even more important down the road.

At Heineman’s urging the Legislature has done away with direct state aid to cities, counties and natural resources districts to the tune of $44 million over two years.

School districts are looking at tens of millions of dollars less in aid dollars from state government, represented in part by federal stimulus package dollars.

If any local governments did boost their sales tax to 2 percent it would be added to the state tax of 5.5 percent. Some shoppers would say that’s a little steep.

Heineman is just saying “NO!” But he hasn’t said the word “veto,” although no one can figure out why.

The bill advanced from the first of three rounds of debate on a 27-14 vote. It would need 30 votes from the 49-member Legislature to override a veto.

Heineman’s professed reasoning for objection to the direct democracy approach to potentially higher local sales taxes: Voters might approve a proposal to raise their own sales taxes – especially in Omaha. The state’s largest city faces unfunded pension liabilities of about $700 million.

Supporters of the bill contend it would give voters a chance to decide whether – when higher taxes are needed – if they would prefer the additional revenue come from higher property taxes or increase sales tax. Since the latter are about as popular as mumps, the odd might well favor Heineman when it comes to how voters would lean.

Interestingly, Heineman’s position is contrary to a longtime mantra among conservative Nebraskans: “Local control! Local control! Local control.”

There is at least the possibility that Heineman is sufficiently far-sighted to realize that giving away its sales tax base would be bad policy for state government.

Let’s say some communities would go to a 7.5 percent combined sales tax.

Now let’s say that the economy goes through another episode of acid reflux and coughs up some more nasty fiscal situation, and left state government in real need of more revenue.

Would the governor, or the Legislature, want to face the public and say: “We’re gonna’ boost the statewide sales tax to 6 percent; so, some communities will have an 8 percent combined sales tax rate.”

It wouldn’t be as difficult as getting the Revenue Committee to show up at the Ohio State game wearing Buckeye colors, and explaining why at the 50-yardline for halftime entertainment.

Well, probably not.


ED HOWARD is the statehouse correspondent for the Nebraska Press Association.