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LOCAL VIEW: Mayor, City Council Should Take Conservative Budget Approach

Published in Lincoln Journal Star July 31, 2001

It seems that most of the City Council budget deliberations so far, and virtually all of the public debate, has centered on the mayor's list of budget cuts totaling $1.6 million if we don't pass an increase in the occupation tax on your telephone bill. Many of those cuts are emotionally charged. As you have witnessed on Star City Channel 5 and seen in the media, each council member has his or her personal favorites to cut or retain. I do not have a list of my own, but more on that later.

First, I believe we should be focusing on the revenue side of the ledger. How much more money are you and your neighbors willing to pay next year for city government? The mayor's proposed budget increase of $7.2 million is a 7.5 percent increase over 2001. The 2001 budget was a 5.5 percent increase over the year before. Have you seen those kinds of increases in your wages over the past two years? The national average wage increase in each of the past years has been under 2.5 percent. Inflation has averaged about 2 percent.

Under the mayor's proposals as they currently stand, the city will collect 8.3 percent more in property tax plus 50 percent more in occupation tax on your telephone bill. The increase in property tax comes from increased property valuations. That means if you owned a home valued at $100,000 last year it is valued at $110,000 for this coming year. Virtually every city user fee will increase and we will use an additional $2 million out of the general fund reserve.

If we kept the city's property tax levy the same as last year, the city's share of the property tax on last year's $100,000 home would go up to $356.26. Instead the mayor suggests lowering the city's property tax rate slightly, so the city share would go up to $345.53. He covers the difference with the occupation tax increase that will add nearly $12 per year to the "average" phone bill. Your total taxation ends up about the same.

In addition to the large increase in spending, the problem I have with the mayor's plan is the "regressive" nature of the occupation tax. That means that someone who owns a $77,000 home will pay about the same amount of occupation tax as someone who owns a $277,000 home. Not fair.

My recommendation is: lower the city's property tax rate and reject the occupation tax increase. Without the occupation tax increase, folks with homes valued less than $100,000 will pay less total tax. Those with homes valued at more than $100,000 will pay slightly more. More fair.

It is true. My approach will take between $1.2 million and $1.6 million less tax dollars than the mayor's tax plan. That is only about 1 percent of the total budget. The mayor would still have a 6.5 percent increase or $6.1 million to work with.

As for the program cuts and budget trimming required to take fewer tax dollars, I believe the mayor, as CEO of the city, should have the flexibility to do what he thinks is right. But, let us remember that the city was able to find $12.5 million to invest in a new ballpark without any operating reductions at all. Just recently the city came up with $1.8 million for the fire department out of the general fund to cover start-up costs and operating shortfalls for the city ambulance service without having to shut down senior centers, or community pools, or park maintenance.

As the mayor has shown us in the past, there is much more to the city budget and the budgeting process than meets the eye. Given recent economic signs, taking a more conservative budget approach now is reasonable and responsible.

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