Occupation tax threshold would trigger public vote

Occupation tax revenue projected to exceed established thresholds would be subject to a popular vote under a bill advanced from general file March 28.

LB745 as originally introduced by Valentine Sen. Deb Fischer would have required that any proposed occupation tax be subject to a vote of the people, have a specific purpose and indicate a sunset date. Any change in the rate of a current occupation tax also would be subject to a vote. The bill would not eliminate occupation taxes currently in place.

“Nebraskans are concerned with occupation taxes levied by municipalities for things other than telecommunication purposes,” Fischer said.

A Revenue Committee amendment, adopted 27-3, would allow municipalities to adjust the rate or terminate an existing occupation tax without submitting it to a public vote.

York Sen. Greg Adams introduced an amendment, adopted 25-5, which would establish revenue thresholds for implementing new occupation taxes. Under the amendment, a proposed occupation tax would be subject to a public vote if the projected revenue exceeds:
• $1 million for cities of the metropolitan class;
• $750,000 for cities of the primary class;
• $500,000 for cities of the first class; and
• $250,000 for cities of the second class and villages.

Opponents of the bill argued the thresholds were too restrictive for local governments.

Omaha Sen. Steve Lathrop said the thresholds specified under the Adams amendment were too low and would infringe on cities’ autonomy.

“For us to require a vote of the people and lower the threshold for them to perform a function of administering the government, I think is the wrong direction to go,” Lathrop said.

Lincoln Sen. Bill Avery said it was important to set thresholds that still would allow elected officials to conduct business without disproportionate oversight.

“We have to be careful with how we tinker with the legitimate obligations of elected officials and restrict their ability to serve on behalf of the people who elected them,” Avery said.

An amendment introduced by Bellevue Sen. Abbie Cornett, adopted 38-2, adjusted the bill’s occupation tax revenue thresholds. Under the amendment, a proposed occupation tax would be subject to a public vote if the projected revenue exceeded:
• $6 million for cities of the metropolitan class;
• $3 million for cities of the primary class;
• $700,000 for cities of the first class; and
• $300,000 for cities of the second class and villages.

Senators advanced the bill to select file on a 38-2 vote.