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January 10, 2011

Wall Street Journal on Suttle recall

by Deena Winter

The Wall Street Journal weighs in on the proliferation of recalls nationwide, focusing on the one up north, in Omaha.
WSJ theorizes that Jim Suttle’s misfortunes are more a part of Obama-backlash. But I think this sentence in their story might be more relevant:

During his campaign, Mr. Suttle pledged to hold the line on taxes. Then sales-tax revenues crashed just before he took office, leaving the city facing a $10 million budget shortfall.

In response, Mr. Suttle cut the budget by $7 million, then pushed through two real-estate taxes, a commuter tax and a restaurant tax that generate about $37 million a year (a roughly 5% bump to the city’s $662 million annual budget). For the owner of a median-price home of $133,000 in Omaha, the real-estate taxes cost $90 a year.

About $13 million in the additional tax revenue has been used to pay down the $850 million in unfunded pension obligations, said Pam Spaccarotella, the city’s finance director.

Lincoln’s mayor has also presided over increases in the telecommunications tax and bar and restaurant taxes — but voters approved the bar and restaurant tax to pay for about half of the arena project, and the telecom tax went largely unnoticed by the Average Joe.

However, next year, if Beutler is re-elected, I think it’s unlikely he’ll avoid raising property taxes to fund the next budget. Parks Director Lynn Johnson recently told the parks advisory board that the city used about $4 million in one-time money to balance this year’s budget, and in order to balance the next budget are to find more revenue (most likely by increasing property taxes) or significantly reduce city services and continue reorganizations.

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