LINCOLN — Cities retained the power to increase local sales taxes by a half-cent after attempts to either rescind or restrict that authority failed Monday.
A state law that was passed last year allows cities to raise local sales taxes from 1.5 cents to a maximum of 2 cents, with voter approval. The law was under threat, but several state senators argued that cities and towns deserved to keep the power to decide how to tax themselves.
State Sen. Jeremy Nordquist of Omaha said cities need options to raise revenue, and alternatives such as increasing property or wheel taxes are less desirable.
He and other supporters said that the taxing authority should stay in place, pending a study of the state tax system that is expected to be completed in December.
State Sen. Ernie Chambers of Omaha targeted the taxing authority, arguing that sales taxes unfairly affect the poor.
But his amendment to rescind the authority failed Friday by one vote. An attempt Monday to reconsider that vote also fell, 22-25.
Omaha Sen. Bob Krist then proposed a moratorium on any increases in local sales or occupation taxes, but that effort fell five votes short.
Three communities — Alma, Sidney and Waterloo — have won voter approval in the past year to increase local sales taxes to 2 cents. And the city of La Vista is considering putting it up for a vote next year to help finance redevelopment of a mostly vacant shopping center along 84th Street.
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