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City officials support sales tax measure
April 26, 2012 Jerry Purvis   

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GERING — Because of recent legislative action, Nebraska municipalities can now raise their sales tax rate by one-half percent if the voters approve.

The bill, LB 357, was passed this session by the Legislature but was vetoed by Gov. Dave Heineman. On the last day of the session, state senators overrode the veto 30-17. The governor said a higher sales tax would only put a more excessive burden on Nebraskans during a time when the economy is weak.

Currently, local sales tax is limited to 1.5 percent or less. The bill allows municipalities to raise that rate to 1.75 or 2 percent. But the measure must be approved by the voters and at least 70 percent of the municipality’s governing body. The added sales tax can only be used for infrastructure projects. Additionally, the sales tax would only be in effect for the next 10 years.

“What better way for people to be able to approve or disapprove of funding for needed projects,” asked Gering Mayor Ed Mayo. “If people want a project, this gives them a way to pay for it.”

Mayo said the Legislature had foresight in allowing the sales to be used in interlocal agreements, such as the school district, to complete a joint project. One example would be the tennis courts at Gering High School, which are also used by the public. New sales tax funds could help the district with upgrades to those facilities when needed.

Mayo said the new sales tax option would have the added benefit of reducing the city’s need for property tax funds.

“I think anything we do that isn’t too much of a burden on the public will help reduce our property tax rate, and that’s a plus,” said Gering City Council member Julie Morrison. “We have streets and water mains that need to be repaired. The infrastructure is always in need of repair because of constant use.”

Morrison added she supports the provision that a sales tax hike must be approved by the voters. That way, they don’t feel the city is overtaxing them.

Terrytown Mayor Kent Greenwalt also thinks the sales tax option will benefit his town. “It’s a good thing the people will be able to vote on this whether they approve or disapprove,” he said. “There are certainly some things we could use that added revenue for.”

This summer, Terrytown will be installing water meters on all residences and businesses. Many of the town’s water and sewer lines are the originals and will need to be replaced sometime in the future. Also, the town will need to erect a new water tower.
“Our water tower is outdated and very small,” Greenwalt said. “We’d like to have more capacity and replace it before the bottom falls out. That would be a real mess.”

Because the law is so new, no local municipality has yet put the issue to a vote of the people.
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