OWH editorial: Sen. White's tax exemption proposal deserves "serious consideration and debate"

What’s really important on sewer tax debate

Omaha World-Herald Editorial
January 28, 2010

The proposal by State Sen. Tom White to exempt Omaha’s gargantuan sewer separation from sales tax deserves serious consideration and debate.

Over 20 years, that tax would total a projected $327 million. The Omaha city government’s share would be around $46 million. Omaha taxpayers would foot that sales-tax bill in addition to the utility rate increases.

The utility rate increases are unavoidable, given that the federal government has mandated this project. But the sales taxes are optional. In fact, they could be rightly termed a windfall for the state and city governments.

Mayor Jim Suttle makes a reasonable counterargument in pointing to the city’s major long-term financial challenges.

So, Nebraska lawmakers need to examine thoroughly what, on the one hand, the burdens would be on taxpayers and, on the other, what the real-world ramifications would be for the city government by cutting off this revenue stream.

Once all the facts are under discussion, a well- informed, prudent decision can be made. The committee hearing is set for Feb. 11.

Several things are certain at this point, though. One — lamentably — is that the City of Omaha’s general standing at the State Capitol right now is poor. The fault doesn’t lie completely with Suttle; frictions and frustrations have arisen among various players on several matters.

Still, the mayor’s efforts on the sewer separation issue — firing off a blistering letter to White, calling up state lawmakers and then fulminating over the phone — have not helped his cause. They’ve harmed it. Senators who are no particular fans of White have expressed exasperation with the mayor’s blustering tactics, saying his approach has alienated lawmakers.

Some individuals in the Omaha government demonstrate capable diplomatic skills, but the general strain in relations between the city government and the Legislature is a problem. Both sides — city officials and lawmakers alike — need to extend respect and remedy this situation, which threatens Omaha’s interests.

Meanwhile, White — a Democrat who’s running against Republican U.S. Rep. Lee Terry in the 2nd District — will likely find this issue a no-lose situation for him politically, no matter whether his legislative proposal passes or not.

White has raised a legitimate issue of direct financial relevance to hard-pressed taxpayers. The issue gives him the opportunity to denounce unfunded federal mandates and to rail against what he terms an unfair “double tax” and even a “triple tax.”

He can earn cheers by taking a shot at the state tax commissioner’s assertion that a fee shouldn’t be considered a tax.

White may even receive points for political independence by fighting in this instance with Suttle, a fellow Democrat, even though White’s reputation in previous sessions at the Capitol has largely been as a brass-knuckles fighter leading fellow Democrats into battle during floor debates.

What’s most important in this debate, though, isn’t the political fortunes of any elected official. Rather, it’s what’s best, overall, for the public interest.

So, lawmakers need to carefully weigh the need for tax relief against the City of Omaha’s financial challenges. And Omaha officials and state senators need to work on rebuilding constructive relations.