Omaha mayor proposes controversial 4% tax on restaurant, bar and catering bills
Omaha Mayor Jim Suttle’s new 4% tax proposal for restaurant, bar and catering bills is not too palatable for local restaurant owners and industry leaders. The new tax is part of his 2011 budget, along with hikes in the wheel tax and the property tax rate. All three increases would bring in a total of $44 million in new revenue. Omaha is facing a projected $33.5 million budget deficit for next year and Suttle believes that this increase in revenue is needed to help fill this hole and help shore up the police and fire pension funds, while maintaining integral city services. The former president of the Omaha Restaurant Association said, “We feel it targets one particular industry unfairly. We feel it’s a regressive tax. And we don’t think it’s going to do what he (Suttle) thinks it will do. We think it’s going to deter people from spending.” If the tax is passed, Omaha restaurant or bar patrons will be paying 11% on their bills in taxes. The mayor’s budget estimates believe that the 4% tax would add $23.5 million to revenue streams, $2.3 million of which would be invested in the Omaha Convention and Visitors Bureau to bring more tourism to the city. Critics find many faults in the tax hike. “Adding another tax is not going to make people want to spend more money,” said a restaurant owner. “Maybe our customers are going to order less to make their bills smaller. If that happens, the sales tax revenue drops, too.” The Omaha Restaurant Association executive director believes that the bill will result in Omaha diners eating and drinking out less often and ultimately make it much more difficult for restaurants to maintain already razor thin profit margins in a tough economy.
Aksamit, N. (2010, July 21). A not so appetizing tax plan. Omaha World-Herald.