September 2, 2014

Passed last year, local option sales tax could be history this year (AUDIO)

Opposition mounted against a repeal of the local option sales tax enacted last year, but it appears supporters of repeal have the numbers on their side.

Passed only last year, the law authorizes local governments to ask their voters to approve a sales tax increase for specific capital improvement projects.

Gov. Dave Heineman vetoed the measure, but the legislature overrode the veto.

Sen. Ernie Chambers introduced LB 266. It has gotten stuck in committee. So, Chambers moved on Thursday to amend LB 308, sponsored by Sen. Paul Schumacher of Columbus. LB 308 would make changes to how the federal alternative minimum tax is applied in Nebraska.

Sen. Jerry Johnson, the former mayor of Wahoo, argued against repeal.

“But I think taking it away right now is premature. It’s not had a long history; I don’t think it’s had a bad history in its one year run,” Johnson stated during legislative floor debate.

Only five cities have exercised the option. Three succeeded in winning voter approval. Voters in Sidney, Alma and Waterloo passed measures to increase their sales taxes. Voters turned down similar measure in Bellevue and Nebraska City.

Sen. Steve Lathrop of Omaha said the legislature has given cities few options since it took away local aid.

“The quality of life in those communities happens at the city government level and if we give them no options, we’ve strangled them,” Lathrop stated.

Others grumbled about how Chambers maneuvered to get his bill to the floor, while some argued that any consideration of the new law should wait until a special committee conducts a thorough review of the state tax system.

Chambers’ amendment actually failed by one vote on Thursday, 24-16, with several senators not voting. Sen. Beau McCoy of Omaha switched his vote from in favor to not voting so he could call for a reconsideration of the vote. The legislature adjourned for the week Thursday without resolving the issue. When it returns, it will resume debate and might well have the 25th vote for passage.

AUDIO: Brent Martin reports [:45]