Never mind.
Mayor Jim Suttle softened the impact of his proposed entertainment tax when he said Tuesday that the group overseeing the Qwest Center Omaha would not have to pay the levy.
His decision means that the 2 percent tax would generate less money for the cash-strapped city — about $9 million annually, down from about $10 million. That figure assumes an 80 percent compliance rate with the tax.
Just last week, the Suttle administration said it would exempt nonprofit groups from the tax, with the exception of the Metropolitan Entertainment and Convention Authority, which runs the Qwest Center Omaha. Ron Gerard, the mayor's spokesman, said then that the city could not afford to exempt MECA.
On Tuesday, Gerard said it was an “equitable solution” to do just that.
Suttle's tax plan, part of his 2010 budget, would fall heaviest on restaurant and bar tabs, amusement parks, concessions and movie tickets, among others.
All seven City Council members said last week they were opposed to the tax.
Although the mayor's decision means Qwest Center concertgoers wouldn't pay an extra 2 percent on tickets, concessions at the arena and convention center would be subject to the tax. That's because MECA hires a for-profit company to provide food services.
MECA President Roger Dixon said he was disappointed that food and beverages at the Qwest Center and the new downtown ballpark still would be taxed under Suttle's proposal.
Dixon said the tax would encourage conventions to check out other cities, where they might pay a little less on their restaurant bills and other entertainment.
“It puts us at a competitive disadvantage,” he said in an interview after a public hearing on the entertainment tax at Tuesday's City Council meeting.
Exempting MECA from the tax would cost the city about $1 million annually.
About a half-dozen opponents, including Dixon, spoke at the hearing; one person spoke in favor of the tax.
Suttle's original proposal was projected to raise more than $10 million. But nonprofit arts groups spoke out against the tax, and Suttle exempted them.
The mayor has been looking for ways to generate more revenue and address a $11 million city budget shortfall projected for 2010. That gap is on top of this year's $12 million budget shortfall.
He's faced strong opposition to the entertainment tax from MECA, the arts community and restaurant owners. About a half-dozen representatives from those groups spoke before the council. Even more attended the meeting.
“Restaurants are doing everything they can right now” to attract customers, said Chad Hartmann of the Omaha Restaurant Association. “Two percent may not sound like a lot to many people. However, it is a great amount of money.”
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