By Kris Pierce-Douglas County Democratic Party Chairman
Every election we hear the slogan, “Are you better off now than you were 4 years ago?” This slogan is used by all sides of the political spectrum and by incumbents and challengers alike. So, let’s put this question to the test in relation to our mayor’s race.
Let’s begin and honestly recognize what Mayor Suttle inherited when he entered office in 2009. Now before anyone begins the argument of “he was a city councilman and he should have known about these things”, let’s remember that Omaha has a Strong Mayor form of government as set out in our charter. There is no councilmember that knows all the ins and outs of the day to day operations of the city, so let’s pull back just a bit on this argument for a moment. So, back to the beginning.
On his first day, Mayor Suttle took the reins of a city where the sales tax revenues had been declining sharply for several months with no end in sight. The Fire/Police Pension short fall was north of $600 million and the City was aware of this long before 2009. The bond rating companies would announced that they will downgrade Omaha’s credit score to as low as Aaa (AAA is highest then AAa and so on).
I know what you are all thinking, gee Kris this sounds like the lame excuses Obama gave when he took over the White House. You would be correct, it sounds the same, but our Nebraska values and laws don’t allow us to have “DEFICIT SPENDING” in which we can just print and borrow our way out of this mess.
Not that anything to do with taxes and government budgets are simple, but in simple terms: the City was taking less money in (sales tax revenue), the Fire/Police Pension was requiring larger and larger payments by the City to meet those obligations and because the City’s “credit rating” was downgraded; we had to pay HIGHER interest rates on the money we borrowed (bonds).
Higher Interest on Bonds + Higher Payments to Pension + Lower Revenue = BIG HOLE
I am sure you all remember the SUMMER of 2009. Yes that was the summer when the City was closing pools early while libraries went part-time or closed altogether. Some of this was softened by the generosity of many great Omahans. At the same time, Mayor Jim Suttle had to present his first budget for Omaha.
He had to make some tough choices, really tough choices. The public input at the town hall meetings and public hearings were all about “cutting the budget” and in the same breath saying “but not MY library or MY pool”. Everyone wanted cuts, but cuts that didn’t affect them.
Jim Suttle made some very tough and unpopular decisions. He knew the City needed to bring in more revenue because there wasn’t an end in sight for the recovery of the sales tax. He needed to keep the services that the citizens of Omaha expected; Omaha needed a previously cancelled police academy class funded and the Fire/Police Pension shortfall needed to be addressed in order to regain our AAA Bond Rating.
What were his options?
Well an increase in the sales tax was not an option. In fact when increasing the sales tax generally was discussed as a replacement for the Restaurant Tax, Councilwoman Stothert and others wouldn’t even allow the voters (taxpayers) of Omaha make that decision for themselves. Property tax increases were an option, but why make homeowners carry the entire burden when 40% of residents of Omaha do not pay property taxes.
Mayor Suttle took the approach of ensuring that as many Omahans as possible had “skin in the game” because we all benefit from the services the City provides. To take care of the revenue shortfall from falling sales tax revenues, the Mayor and the City Council passed the 2010 budget with an increase in property taxes.
The Mayor then tackled the $600 million shortfall in the Fire/Police Pension. This is, in my opinion, where he got it right. The most diverse revenue stream, outside the sales tax, that can be implemented is through a broad occupation tax (not a fan of the tobacco tax even though I am a nonsmoker). Love or Hate them, they are legal and requires passage by the City Council. With the goal of spreading the burden as much as possible and also relying on events such as the College World Series, the Mayor proposed the infamous Restaurant Tax. This proposal generated as much conversation as Mayor Suttle’s first budget; there was debate, arguments, accusations, finger pointing and our friends at the Omaha Alliance for the Private Sector led by Dave Nabity.
Now it is important to note that all but about 8% of the revenue from the Restaurant Tax goes directly to filling the shortfall of the Police/Fire Pension and it will automatically sunset if the sales tax ever increases by ½ of 1%
All the opponents said it would hurt small businesses and would discourage people from going out to eat. In fact one prominent member of our community even said that restaurants would either, “move out of Omaha or would have to file for bankruptcy”. Unfortunately for them and very fortunate for Omaha, the Restaurant Tax has saved our City in more ways than one and instead of hurting businesses, the Restaurant Tax has increased each year it has been in place which means MORE people are spending money at restaurants.
A continuing opponent of the Restaurant Tax, Councilwoman and Mayoral Candidate Jean Stothert is on the record stating that she will repeal the Restaurant Tax, hire more police officers AND improve city services. She freely admits she does not know where she will find the $25 million per year that the Restaurant Tax produces which goes to shore up the Police/Fire Pension and the City Budget.
So, here we are about 4 years later and we find ourselves as the Best City to have survived the recession, a Top 10 City in the United States to start a new business, and a Top 10 City in the United States to raise a Family to name just a few reasons why we are much better off than we were just 4 years ago.
How did we get here? There were tough choices to be made back in 2009 and whether you like him or hate him, Jim Suttle stood up and made the choices that were best for Omaha. There are still tough choices for Omaha on the horizon and I would feel a lot better knowing our Mayor will make those tough decisions rather than just talking about a plan without any details.
Now before you think I am just being a mouthpiece for the Suttle campaign, even though I am the Chair of the Douglas County Democrats, don’t assume they talk to me about anything. I encourage you to do the research, because you all know that I just tell it like I see it. Have there been some missteps in the Suttle Administration? You better believe it, but look at the big issue (outside the 2010 Flood – you know I had to get that in here somewhere) which is our City’s financial status. We have to admit, we all are better off than we were 4 years ago. As a new homeowner, I want my property taxes cut…who doesn’t! (Big shout out to PIR reader Ted Quick)