Repeal of expanded sales tax authority proposed

A bill heard by the Revenue Committee Feb. 27 would remove cities’ authority to increase their sales tax by one-half cent.

The Legislature voted in 2012 to allow local option sales taxes to be levied at 1.75 percent and 2 percent with 70 percent approval of the members of a municipality’s governing body. The proposal then would be submitted to voters for approval.

LB266, introduced by Omaha Sen. Ernie Chambers, would remove the authority, maintaining the current sales tax rates. He said the tax disproportionately affects the poor.

“The poor don’t have a lot of discretionary income,” Chambers said. “We spend everything we get and then we’re in debt. When it comes to the poor, the sales tax hits them the hardest.”

Matthew Litt, state deputy director for Americans For Prosperity, supported the bill, saying individual families should be the state’s top priority.

“This bill protects Nebraskans’ hard-earned dollars in these tough economic times,” he said. “The needs of Nebraska families outweigh the interests of anyone else.”

Ken Bunger, representing the village of Waterloo, opposed the bill. He said the citizens of Waterloo passed a local option sales tax increase to fund street and roads projects.

“The resources of a village or small community are limited,” Bunger said. “The ability to have a larger local option sales tax is a big deal.”

The committee took no immediate action on the bill.