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CITY OF LINCOLN   •   NEWS RELEASE   •   FOR IMMEDIATE RELEASE

Date:
August 2, 2001
For More Information Contact:
Diane Gonzolas, Citizen Information Center, 441-7831
Don Herz, Finance Director, 441-7411

Mayor Identifies List of Possible Cuts
If the Occupation Tax Not Increased

Mayor Don Wesely today said that if the city's telecommunications occupation tax is not increased, some city services will face budget cuts. The Mayor has proposed increasing the occupation tax from 3.8 percent to 5.75 percent, Omaha's current rate. The increase would generate about $1.6 million for the ten months it would be in effect during the 2001-2002 fiscal year.

"These are not cuts I want to make, but if revenues are reduced, then spending must be cut to balance the budget," said Mayor Wesely. "It is in the best interests of the city to increase the occupation tax to fund these important items. However, I do feel it is important to make this list public so everyone knows the consequences to the city if the occupation tax is not increased."

Wesely said the occupation tax increase would be less of a burden than a property tax hike for citizens and businesses. "While I would have preferred proposing no tax increase, taxpayers do have some control over how much occupation tax they pay since it is based on usage," Wesely said.

The Parks and Recreation Department could be cut by more than $470,000 if the occupation tax is not increased. Significant potential reductions include:

If the occupation tax is not increased, the Administration's efforts to fund the Police and Fire Pension at the actuarially recommended amount would be hampered. The Mayor has proposed adding $250,000 to the pension fund to close the gap between what the city has contributed and what is recommended. Wesely said the city must face making much higher pension contributions because of inadequate funding in the past.

Other major cuts include:

The Mayor had previously agreed to cuts suggested by the City Council. Those cuts include a manager's position for the Heritage Gift shop, implementation of information technology plans, and opening the Woods Sprayground. The replacement of school crossing signs and 275 residential street signs would be funded with unused funds from next year's snow removal account.

"I have been working with members of the City Council on this budget since December," said Wesely. "I will continue to work with them to finalize a budget that meets the needs of the citizens and provides property tax relief."

The Mayor's proposed budget cuts the property tax rate by 3.1 percent.

The City Council will have a public hearing on the proposed budget at 5:30 p.m. Monday, August 6, and will vote on changes at 11 a.m. Thursday, August 9. The Council is scheduled to adopt the budget at 1:30 p.m. Monday, August 20. The meetings August 6 and 20 are in the City Council Chambers. The meeting August 9 is in Council Chambers. Both locations are on the first floor of the County-City Building, 555 S. 10th Street.

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