Omaha mayor faces recall over dining tax; Lincoln mayor riding high
The financing was admittedly complicated: About half the $340 million price tag would be paid off by a new tax on bar and restaurant tabs, car rentals and hotel rooms. However, the words on the ballot pertained only to whether the city should be allowed to bond the proceeds of the so-called “turnback tax” — state sales taxes generated in the arena and nearby hotels and “turned back” to the city for the arena.
Two different revenue sources altogether, but people seemed to mix the issues and conclude that only the bars, restaurants and hotels near the arena would be paying the new bar and restaurant taxes. No matter how many times I wrote that it would be a “citywide” tax, people’s eyes probably glazed over when they started reading about the JPA and turnback taxes and the fact that they were only voting on $25 million of a $340 million project and whether Beutler or Bereuter was presiding over this whole thing… it was a challenge to explain.
I knew we had a problem when it became clear during a conversation with the editor of the paper that he didn’t grasp that the tax would be applied citywide. If he didn’t get it, (and presumably he read all 232 stories I wrote) how was the average voter going to get it?
I don’t know if the architects of the finance plan wanted the whole thing to be confusing (I mean, just trying reading this story I wrote trying to put it all in English), but if they did, that was genius.
It seems people are finally catching on, now that the new 2 percent tax began being applied to their bar tabs and McDonald’s meals this month. You’re seeing letters to the editor complaining about the “tax on a tax” (because the bar and restaurant tax is computed, and then sales tax applied to that). I’ve eaten at restaurants where the owner hands over the bill and says “You can thank the mayor for that arena tax.”
My husband bought food at a grocery store deli the other day and they applied the restaurant tax; the workers said it was a royal pain because they were struggling to change over their checkout system to accommodate the new tax.
Meanwhile, in Omaha, Mayor Jim Suttle faces a recall election on Tuesday largely due to unhappiness over a 2.5 percent dining tax (on bar, restaurant and catering tabs).
Ours is 2 percent, plus there’s a new 4 percent tax on car rentals and hotel rooms. In addition, Beutler’s administration convinced people to raise their property taxes for a stormwater bond, increased property taxes a bit, and expanded the city’s telecommunications tax to include phone equipment. How did Beutler get by with all that, while Suttle is up against the wall? And don’t say Rick Hoppe, his political mastermind/chief of staff.
Well, whereas Omaha needed the money to get out of a budget crunch and pay for their pensions and awful sewer system, we get an arena to try to compete with theirs.
However, I think another key is that Omaha’s bar and restaurant lobby geared up right away, fighting Suttle’s proposed tax hard. The media really covered it, too, and things snowballed from there. The Republicans seized on the opportunity, and here we are, waiting to see if they’ll get an election do-over.
In Lincoln, bar and restaurant folks mostly wanted the arena, because they hope it’ll bring in more business (even though the city’s own study showed the new development to be built near the arena will capture the vast majority of the arena-goers’ walking-around-money) so they swallowed the tax.
It seems some of them are just now beginning to be bothered by the aftertaste.