A proposed 4 percent restaurant tax would end immediately if the Nebraska Legislature granted Omaha permission to raise the city sales tax rate and voters approved it, Mayor Jim Suttle said Thursday.
A sunset provision on the restaurant tax will be included in a budget ordinance, said Suttle spokesman Ron Gerard. That measure could go before the City Council next month.
Suttle has included the tax on restaurant and bar tabs in his 2011 budget proposal, which he released this week. His plan also includes an increase in the city's wheel tax and a property tax hike.
The restaurant tax, Suttle has said, would generate about $23.5 million, about $13 million of which would be set aside to help shore up the police and fire pension fund, which has a long-term estimated shortfall of about $500 million.
In order for this tax to be dropped, the Legislature would have to approve a measure giving Omaha the option to impose a local sales tax increase if voters approved.
Gerard said if voters approved a sales tax hike, the restaurant tax would be removed from their dining and bar tabs.
The city currently levies a 1.5 percent sales tax on top of the state's rate of 5.5 percent.
Suttle tried to persuade state lawmakers to back a half-cent increase in the city sales tax during the 2010 legislative session, but they balked.
Residents who attended a budget forum Thursday night at Millard South High School didn't key on the restaurant tax. About 150 people attended the meeting.
But they brought up a related topic Suttle's proposed police contract, which would set both the city's and police officers' contributions to the police and fire pension fund.
Nearly 50 people circled the mayor in the hallway outside the school auditorium after the formal presentation on the budget ended.
The group, sometimes with raised voices, asked Suttle why the police contract couldn't slash benefits further, as has been the case in the private sector.
Suttle said the contract would cut police benefits and asks officers to contribute more cash into the pension fund.
Several people in the crowd said that wasn't enough.
The mayor kept his cool in the roughly 45-minute exchange, even as he went toe-to-toe with angry constituents who said they had been taxed enough.
“My 401(k) went in the toilet!” shouted Bob Bischof of Omaha.
P.J. O'Halloran, who said he works part-time at Walmart and makes less than $9 an hour, wants Suttle to reconsider his wheel tax increase.
“I can't afford to license my car next year,” O'Halloran said. “How am I supposed to license my vehicle to get to my job?”
Suttle told the crowd that his budget was the only way to ensure that city services would remain intact.
“I know it hurts, I know it is painful,” Suttle said. “But I'm not going to tell lies. If the truth is painful, I'm going to tell you.”
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