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January 21, 2011


Omaha mayor faces recall over dining tax; Lincoln mayor riding high

by Deena Winter

Often, while covering the arena project, it seemed like Lincolnites weren’t really “getting” how the project was going to be paid for.

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.

Read more from City Hall, Haymarket Arena
9 Comments Post a comment
  1. E
    Jan 21 2011

    For a city full of “intellegent” people, Lincolnites are pretty stupid. Maybe it’s just the arrogance of the University of Nebraska-Lincoln and city politics that paints a false image of intellegence. FOLKS, we’re being taken advantage of and everyone’s asleep at the wheel or drinking the Beutler “Kool-Aid!”

  2. Terry Gill
    Jan 21 2011

    Deena, you’ve left out the fact that Beutler has consistantly trimmed city government, lowering the retirement pensions and cutting postions. Like someone else said, what Buffington is claiming she can do are things that Beutler has already done.

    Omaha is facing a financial crisis, Lincoln is not. That is the difference.

  3. Jan 21 2011

    Terry — Ah… but Lincoln has had multi-million-dollar budget gaps to close every year since Seng was still mayor — and Mayor Beutler himself has said Lincoln will have another one this year. Omaha may be in worse trouble, but Lincoln hasn’t exactly been rolling in money.

  4. ej
    Jan 21 2011

    Apples to oranges comparison, IMHO. In Lincoln, the bars/restaurants are getting something in return: the potential opportunity for more business. In Omaha, the bars/restaurants see their patrons getting stuck with the bill for Suttle’s mismanagement. I don’t see Lincoln/Beutler – Omaha/Suttle as a logical comparison. From here, it appears that Suttle pretty much botches everything he touches.

    And I, for one, always assumed the bar/restaurant tax would apply citywide. I’m surprised to hear so many people evidently think otherwise, though, I’ve yet to hear that from anyone I know.

  5. Gene
    Jan 21 2011

    Maybe because Beutler doesn’t have a bunch of Republicans pouring money into a recall effort? This article spells it out pretty well:

  6. Jane H Kinsey
    Jan 21 2011

    As I said in my letter to the editor a few weeks ago, Omaha is alert to being misused by their leaders. They have had 4 recalls of mayors over the years and, even if not successful, it keeps their Mayors in line. Too many citizens in Lincoln are like sheep. They vote for whatever the leaders say and don’t really study the issues. Many taxes or fees have been already raised here. When the next mayor has to raise property and other taxes to balance the budget, maybe they will wake up. Of course, maybe the possible or real recall in Omaha will shake him/her up and he will be more careful about his taxing actions. There is now a budget surplus in Omaha and it didn’t just appear magically. Taxes did their job.

    • Gene
      Jan 25 2011

      They’re going to use a third of that surplus on this recall election if it wins. Does that seem wise?

      Also, if the mayors of Lincoln and Omaha are so similar, I’d like to know why Suttle continues to get Deena’s high praise but Beutler gets daily criticism.

  7. Local Lincoln Doc
    Jan 23 2011

    Folks who repeatedly spell “intelligence” and “consistent” wrong can not expect to be taken seriously in their questioning of the truly visionary folks who recognize how important the arena is to our city’s future. Certainly the commerce will spread throughout the city and will not be limited to the Haymarket. When Nebraskans come to Lincoln, they go out as far as Southpointe, Gateway and even the far southeast stores. Even if the growth of commerce were limited to the Haymarket, it would be a boon to our city.

  8. Jan 24 2011

    i love, love, love the last one!!!


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