Nebraska State Sen. Heath Mello will make a second try to use sales taxes on sewer fees to help Omaha pay for its $2 billion sewer project.
Mello said Tuesday he’ll introduce a bill in the next legislative session to give the City of Omaha an estimated $80 million to $100 million in sales tax revenue over 20 years.
The money would come from the increased sales taxes that Omahans will pay on their sewer use fees.
The fees are going up because of the federally mandated reconstruction of Omaha’s sewer system.
Mello said Omahans pay more than $20 monthly in sewer use fees now. He said the fees are projected to increase to $50 in the next few years because of the sewer project.
The state and the City of Omaha collect sales taxes on those fees. Mello proposes to set aside those additional taxes generated by the increased fees.
The state’s portion would be returned to the city to help pay for the sewer project. The City of Omaha would be required to dedicate the city’s additional sales taxes to the project as well.
“I don’t think the state and city should reap additional taxes because of the federally mandated project,” Mello said.
He introduced similar legislation in 2011. It cleared first-round consideration, but he pulled it because it didn’t have enough votes to override an expected veto by Gov. Dave Heineman.
Mello’s new version of the bill is designed to broaden its appeal in the Legislature.
It would use some of the sales taxes levied on increased sewer fees to create a fund for other Nebraska communities who also face expensive, federally mandated sewer projects, Mello said.
Ninety percent of the increased sales taxes would go back to Omaha, he said. And 10 percent would go into the fund for smaller communities.
“It’s not simply an Omaha bill,” Mello said. “It’s a statewide bill.”