LINCOLN — By the bare minimum of 30 votes, state lawmakers on Wednesday overrode Gov. Dave Heineman's veto of a bill that will allow cities, with voter approval, to increase local sales taxes by up to a half-cent.
The 30-17 vote on Legislative Bill 357 was the first of two vetoes overriden by legislators on the final day of the 2012 session.
The governor and the Greater Omaha Chamber of Commerce had portrayed LB 357 as a tax increase and a measure that would hurt business recruitment.
But backers of the measure, including the Cities of Omaha and Lincoln and the League of Nebraska Municipalities, said it simply gives citizens the right to vote on how they want to be taxed locally.
“That was just too compelling,” said State Sen. Brad Ashford of Omaha, the bill's primary sponsor. “It allows citizens to be engaged in planning for the future of their community.”
Under the measure, a city council could place a proposed sales tax increase on the public ballot only if 70 percent of its members agreed. Supporters said the bill will give cities a new tool to build new streets, swimming pools and beltways.
Omaha Sen. Gwen Howard supported the override vote after talking Wednesday to Omaha Mayor Jim Suttle.
She said the mayor assured her that part of any sales tax increase in Omaha would be devoted to paying for the $1.7 billion sewer project that has been mandated to comply with the federal Clean Water Act.
Suttle's spokeswoman, Aida Amoura, however, said later that it was premature to say how such funds would be used if voters approved a sales tax increase.
“Obviously, the mayor is happy about this because it gives Nebraska taxpayers a choice on how to spend their tax dollars,” Amoura said.
She said any decision on how to use such funds would not be proposed without getting public input.
Under LB 357, about half of any new sales tax revenue in Omaha would have to be used to replace funds from the city's tax on restaurant and bar bills — a tax that would go away if a sales tax increase passed.
The rest of the revenue could be used for infrastructure needs. An interlocal agreement with another governmental entity, presumably Douglas County, would be required to use all the new revenue.
Fremont Sen. Charlie Janssen was among the senators opposing the override attempt.
“We have enough taxes. We don't need another one,” Janssen said.
He said senators had “killed jobs” by refusing to help the horse racing industry Wednesday but were willing to raise taxes.
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