Is Tax Burden Crushing Nebraskans?

[joeglow]

Is Tax Burden Crushing Nebraskans?

The report notes that wage and salary growth in Nebraska lagged behind that of neighboring states and the U.S. from 1995 to 2007, while state and local taxes increased more than in bordering states and the U.S. average. Left unchanged, the authors say those and other factors will depress the economy over the next decade, leaving the state's median income below the national median income by 2015.

"The current practice in Nebraska is to protect tax revenue, sustain a healthy state-government cash reserve and offer highly focused incentives to certain business groups," the report says. "In other words, very little is happening to current tax policies that will entice working-age people to live in Nebraska."

One way to lower taxes, the economists say in the report, is to limit state-spending growth to a rate pegged to the growth rates of population and inflation.

Currently, "The government may simply over-provide key services and amenities such as roads and highways, education, or parks," the report says.

The economists also recommend that the state slow growth in spending on K-12 public schools, tying growth to the rate of inflation. From 1965 to 1995, state government spending on schools increased by almost 14 percent annually, the report says.

[HskrFanMike]

Generally speaking, the people claiming to be "crushed" by taxes are probably the people best able to pay taxes.  (At least that's been my experience.)

That being said, I do think taxes could be lower, and I'm encouraged that rather than scream "my taxes are too high", they've offered specific suggestions on what should be cut from the budget.

Currently, "The government may simply over-provide key services and amenities such as roads and highways, education, or parks," the report says.

The economists also recommend that the state slow growth in spending on K-12 public schools, tying growth to the rate of inflation. From 1965 to 1995, state government spending on schools increased by almost 14 percent annually, the report says.

Now, do we really want to reduce spending on roads, highways, education, or parks?  I'm sure retirees and those who don't have kids will say "of course cut education"; they aren't affected by education cuts.

What I'd like to see is people who complain about taxes offer up what services THEY CURRENTLY USE they'd like to see reduced or cut.  For example, retirees cannot offer up education; that doesn't affect them.  It's easy to ask others to make sacrifices.

Businesses should look at programs that impact them and recommend options for reducing or elimination.

[HskrFanMike]

On second thought...
http://www.omaha.com/article/20090708/NEWS01/707089918

Among the chief focuses are cutting the state's above-average tax burden, creating new business incentives, promoting entrepreneurship and creating local endowments that could build more public amenities.

The report's authors said such “man-made'' amenities are particularly important in a state that doesn't boast oceans, mountains or warmer climates.

Ok...cut taxes, spend more money on amenities and business incentives.

Anybody see a problem with this?

The authors offer few specifics as to what state and local services could be cut or downsized to make way for the tax cuts.

In other words, more of the same old "MY TAXES ARE TOO HIGH!!!11!!111!!!!!"

And then the death knell:

Thompson acknowledged that taxes aren't the top consideration for most people in picking a place to live, with jobs, cost of living, schools, weather and attractions all big considerations.

So in other words, they are advocating cutting the things that make areas more desirable ... to lower taxes, which they admit aren't as important.


 :roll:  :roll:  :roll:  :roll:  :roll:  :roll:  :roll:  :roll:  :roll:  :roll:  :roll:  :roll:  :roll:  :roll:  :roll:  :roll:  :roll:  :roll:  :roll:  :roll:  :roll:  :roll:

What a waste of time and effort.

[icejammer]

Thompson acknowledged that taxes aren't the top consideration for most people in picking a place to live, with jobs, cost of living, schools, weather and attractions all big considerations.

So in other words, they are advocating cutting the things that make areas more desirable ... to lower taxes, which they admit aren't as important.

Precisely.  Just take a look at Iowa, lower taxes, but not really any higher growth than Nebraska population-wise.

[joeglow]

So, are we saying Ernie Goss is an idiot.....unless he is calculating the impact of the CWS?

[icejammer]

So, are we saying Ernie Goss is an idiot.....unless he is calculating the impact of the CWS?

I don't think anyone said that.  However, tax policy change, in and of itself, is not going to double the state's growth rate, there's got to be more to it than that (and as the OWH article implies, the strategy may rely heavily upon a higher international immigration rate).

[Big E]

So, are we saying Ernie Goss is an idiot.....unless he is calculating the impact of the CWS?

I don't think anyone said that.  However, tax policy change, in and of itself, is not going to double the state's growth rate, there's got to be more to it than that (and as the OWH article implies, the strategy may rely heavily upon a higher international immigration rate).

Can we tax Spanish?

Anyway, my easy steps would be the following:

1) All state employees (where possible) switch to a 4 day x 10 hour work week (vs 5d x 8h).  The state legislature should follow a similar schedule when in session.  (I'm stunned more non-service oriented companies don't do this anyway, but that's a topic for another day...)

2) Consolidate rural school districts.  You think the redundancy in local governments is outrageous?  You have no idea the amount of money being burned in piles to keep schools open in some of these towns and counties.

3) OH MY GOD WITH THE |expletive| ROADS.

[Stargazer]

Nebraska is one of only 5 states not facing a budget shortfall in 2009... apparently we're doing something right.

[Big E]

Nebraska is one of only 5 states not facing a budget shortfall in 2009... apparently we're doing something right.

Yeah... high taxes and |expletive| service.

[joeglow]

Nebraska is one of only 5 states not facing a budget shortfall in 2009... apparently we're doing something right.

Don't we have a budget shortfall?  Weren't we just wise enough to run surpluses in the good years and save it in a rainy day fund?

Personally, I don't understand the need to grow rapidly.  I don't want to be Chicago, Dallas, New York or any California city.  While they offer more amenities, they tax out the arse (Texas having no income tax being the exception) and still can't manage to get surpluses when the economy is great.  I would rather see an emphasis on smart finances and growth in a fiscally responsible manner.

[HskrFanMike]

So, are we saying Ernie Goss is an idiot.....unless he is calculating the impact of the CWS?

No, I'm not going to argue that Ernie Goss is an idiot.  He's forgotten more about economics than I'll ever know.

But that being said, I read the articles and found myself shaking my head because I think they set out to make a case for something, but lost their focus along the way and focused on taxes instead.  And while they make a good case for lowering taxes, they found themselves contradicting their initial reason for focusing on taxes.

Either that, or they set out to put together a case for lowering taxes and the reasons for why that's necessary were secondary.  To some people, lower taxes are important enough that you don't need a reason to do it.  They just hate paying taxes.  And to those folks, you don't need a reason.

[joeglow]

So, are we saying Ernie Goss is an idiot.....unless he is calculating the impact of the CWS?

No, I'm not going to argue that Ernie Goss is an idiot.  He's forgotten more about economics than I'll ever know.

But that being said, I read the articles and found myself shaking my head because I think they set out to make a case for something, but lost their focus along the way and focused on taxes instead.  And while they make a good case for lowering taxes, they found themselves contradicting their initial reason for focusing on taxes.

Either that, or they set out to put together a case for lowering taxes and the reasons for why that's necessary were secondary.  To some people, lower taxes are important enough that you don't need a reason to do it.  They just hate paying taxes.  And to those folks, you don't need a reason.

-I think it is an issue of you have to lose money to make money.  Cutting tax rates and offering incentives will attract more business, which will create more jobs, resulting in a larger income tax base, more sales tax revenues, etc.  However, we can't just cut taxes and not cut spending (well, we could, be we would be like California, then).

The problem is that there is no perfect formula and if you get it wrong by too much, the damages could be huge.

[nativeomahan]

Do we really need 93 counties?   Some with fewer than 1,000 people...

[cdub]

Do we really need 93 counties?   Some with fewer than 1,000 people...

No, but good luck changing that.

[MrPoloShirt]

90% of government could be eliminated saving the tax payers money.

[S33]

90% of government could be eliminated saving the tax payers money.

You mean to tell me we don't need a czar for every sector of government new or old? That's a different concept!

[MrPoloShirt]

90% of government could be eliminated saving the tax payers money.

You mean to tell me we don't need a czar for every sector of government new or old? That's a different concept!

What's more, we don't need nearly "every sector of government" in the first place!

[joeglow]

90% of government could be eliminated saving the tax payers money.

You mean to tell me we don't need a czar for every sector of government new or old? That's a different concept!

What's more, we don't need nearly "every sector of government" in the first place!

I am starting to feel what it is like to be an old cynical person.  Look at Education:  We have Omaha School District, the State Department of Education and the Federal Dept. of Education.  I think you can cut some of the State level and ALL of the Federal level.  These are NOTHING BUT admin people who simply eat up money.  Good luck changing that, though.

[Big E]

Look at Education:  We have Omaha School District, the State Department of Education and the Federal Dept. of Education.  I think you can cut some of the State level and ALL of the Federal level.  These are NOTHING BUT admin people who simply eat up money.  Good luck changing that, though.

I assume you would want to roll Millard, Elkhorn, and District 66 in to OPS as well, right?

[joeglow]

Look at Education:  We have Omaha School District, the State Department of Education and the Federal Dept. of Education.  I think you can cut some of the State level and ALL of the Federal level.  These are NOTHING BUT admin people who simply eat up money.  Good luck changing that, though.

I assume you would want to roll Millard, Elkhorn, and District 66 in to OPS as well, right?

In fact, yes.  The way that we, as a nation, provide the majority of funding for schools (local property tax base) is the dumbest thing ever.  Talk about INSURING the cycle of poverty continues.  I like Hawaii's set-up of the entire state being one district.

[S33]

Look at Education:  We have Omaha School District, the State Department of Education and the Federal Dept. of Education.  I think you can cut some of the State level and ALL of the Federal level.  These are NOTHING BUT admin people who simply eat up money.  Good luck changing that, though.

I assume you would want to roll Millard, Elkhorn, and District 66 in to OPS as well, right?

In fact, yes.  The way that we, as a nation, provide the majority of funding for schools (local property tax base) is the dumbest thing ever.  Talk about INSURING the cycle of poverty continues.  I like Hawaii's set-up of the entire state being one district.

Can't really argue that as I've never really looked at it from that angle.

[Dark Eyes]

I pay more in property taxes on my house and two cars than I do for all utilities combined (MUD, OPPD, phone/cable/internet).

My two cars are 12 and 9 years old, respectively.   The tax bill was much worse when they were newer.

Local taxes are going to increase thanks to the new baseball stadium, and principal coming due on Qwest Center.   Suttle is already talking about tax increases just to cover basic city services.

Residents of high-tax cities have been known to move to lower-tax locations, and Omaha is definitely heading in that direction.

[HskrFanMike]

Local taxes are going to increase thanks to the new baseball stadium, and principal coming due on Qwest Center.   Suttle is already talking about tax increases just to cover basic city services.

Sorry, but I do have to correct this.  Unless you rent a car or stay at a hotel within the city limits, your taxes are not going up "thanks to the new baseball stadium."  
[Snarky comment:  Unless you live in Sarpy County, that is... ]  

Qwest Center and basic services, that's probably correct though.

[joeglow]

[Snarky comment:  Unless you live in Sarpy County, that is... ]  

-I don't disagree with this as the likely outcome.  However, just as I don't believe Sarpy County, I don't believe Omaha as well.

[RegisResident]

I'm originally from NY and taxes are definitely higher here than NY.

Some examples:
In NY it costs about $60 every 3 yrs to register a vehicle and $15/yr. to have it inspected- it doesn't matter how new or old your car is; compared to Omaha where when I first moved here my 8 yr. old car was $230/yr. to register- when my car was 10 yrs. old it was still $150/yr. Last yr. I bought a new car (because my old one was costing more to maintain per month than a car payment) and I'm expecting to pay $400 to renew my registration.

The house that my family owns in NY is assessed at 4 times the value of my condo, but the property taxes for my condo are only 1/2 of the property taxes we pay in NY.


I think if we are going to have such a high property tax rate, sales tax rate, vehicle registration rate, we should look at removing the income tax. If we are going to keep the income tax, then the state/city administration needs to make the government much more efficient.

[DTO Luv]

I think a huge source of our burden goes to maintaining depleting rural NE.

[Dark Eyes]

Unless you rent a car or stay at a hotel within the city limits, your taxes are not going up "thanks to the new baseball stadium."

If that revenue is below projections, the city (and its taxpayers) are on the hook to make up the difference.

Revenue from the Hilton hotel was below the city's projections.    

So I'm not convinced that the cost of the new stadium will not be at least partially borne by Omaha taxpayers.

[cdub]

I'm originally from NY and taxes are definitely higher here than NY.

Some examples:
In NY it costs about $60 every 3 yrs to register a vehicle and $15/yr. to have it inspected- it doesn't matter how new or old your car is; compared to Omaha where when I first moved here my 8 yr. old car was $230/yr. to register- when my car was 10 yrs. old it was still $150/yr. Last yr. I bought a new car (because my old one was costing more to maintain per month than a car payment) and I'm expecting to pay $400 to renew my registration.

The house that my family owns in NY is assessed at 4 times the value of my condo, but the property taxes for my condo are only 1/2 of the property taxes we pay in NY.


I think if we are going to have such a high property tax rate, sales tax rate, vehicle registration rate, we should look at removing the income tax. If we are going to keep the income tax, then the state/city administration needs to make the government much more efficient.

The City can't pick up (or lessen rather) the burden caused by every other taxing jurisdiction.  They have tried and now they are in a ringer.  The auto taxes were the most shocking to me coming over from Iowa.

[HskrFanMike]

I'm originally from NY and taxes are definitely higher here than NY.

Some examples:
In NY it costs about $60 every 3 yrs to register a vehicle and $15/yr. to have it inspected- it doesn't matter how new or old your car is; compared to Omaha where when I first moved here my 8 yr. old car was $230/yr. to register- when my car was 10 yrs. old it was still $150/yr. Last yr. I bought a new car (because my old one was costing more to maintain per month than a car payment) and I'm expecting to pay $400 to renew my registration.

The house that my family owns in NY is assessed at 4 times the value of my condo, but the property taxes for my condo are only 1/2 of the property taxes we pay in NY.


I think if we are going to have such a high property tax rate, sales tax rate, vehicle registration rate, we should look at removing the income tax. If we are going to keep the income tax, then the state/city administration needs to make the government much more efficient.

Part of the problem with property tax comparisons is that if you take a house that's worth $500,000 in New York and build an identical house in Omaha, the Omaha house is probably only worth half the New York house.

As for taxes between Iowa and Nebraska go, everybody points to property taxes ... which are significantly higher in Nebraska, I'll grant you.  But nobody ever mentions that income taxes are about 25% lower in Nebraska.

[icejammer]

As for taxes between Iowa and Nebraska go, everybody points to property taxes ... which are significantly higher in Nebraska, I'll grant you.  But nobody ever mentions that income taxes are about 25% lower in Nebraska.

Probably not mentioned because it's not true for most people - I can tell you the difference between NE and IA for me has been between about 5-10% over the last decade.

[nebugeater]

In 1989 when I moved from St Joe Mo to Cedar Rapids Ia I figured out that car insurance was lower in Iowa, at least at that time. With the same insurance Company, the Same coverage, the same two cars and the same discounts applied my cost was cut in 1/2 from Missouri to Iowa.

[RegisResident]

If our taxes weren't high enough before, Suttle is trying to add a new tax and raise an old tax.

New Tax: Entertainment Tax @ 2% (making a night out on the town a total of 9% in taxes when sales tax is included)

Old Tax: Property Tax going up 2.4%

Don't get me wrong, I like Omaha but the taxes are ridiculous.

[cdub]

If our taxes weren't high enough before, Suttle is trying to add a new tax and raise an old tax.

New Tax: Entertainment Tax @ 2% (making a night out on the town a total of 9% in taxes when sales tax is included)

Old Tax: Property Tax going up 2.4%

Don't get me wrong, I like Omaha but the taxes are ridiculous.

City tax rates are still 2nd lowest in the metro.  I'm not saying Suttle is great but people on message boards everywhere are showing their lack of understanding.  The genius Daub cut and cut and cut in his tenure.  heck, the first chance he had after promising that the Qwest wouldn't raise taxes was cut because there was a little room to do so.  The finance dir. told him not to do that because we'd end up short later and he didn't care.  Suttle has made a PR mess for himself but hes probably right that taxes had to go up.  The entertainment tax might be getting a lil silly high for those sales items though.  I especially loved one comment on WOW, " I GUARANTEE that there are hundreds of thousands if not millions in waste"  uh huh, sure.  Politicians in Omaha love to cut, if there was much room, theyd still be cutting I'm sure.

[joeglow]

 I especially loved one comment on WOW, " I GUARANTEE that there are hundreds of thousands if not millions in waste"  uh huh, sure.  Politicians in Omaha love to cut, if there was much room, theyd still be cutting I'm sure.

Really?  You think the city is efficient?

[cdub]

I know that, outside of police and fire, there are not millions of bucks of waste.  

I'm not saying that there are millions in PD and FD, I'm saying I have no idea about those two.

[DTO Luv]

The property tax increase is only $24 per $100,000 of assessed value. $24 dollars a year ($2 a month) isn't going to bankrupt people.

[joeglow]

The property tax increase is only $24 per $100,000 of assessed value. $24 dollars a year ($2 a month) isn't going to bankrupt people.

-And neither will 100 a year ($4 a month) in entertainment tax.
And neither will rolling back Bush's tax cuts.
And neither will a $5,000 ($10,000 for family) annual premium for government insurance.

The problem is, EVERY time this happens, the same people come out and say "well this step is such a small step, it doesn't matter."  However, about 10 years of this and you suddenly realize all those little steps just carried you a quarter mile down the road.

[TechnicalDisaster]

I know that, outside of police and fire, there are not millions of bucks of waste.  

I'm not saying that there are millions in PD and FD, I'm saying I have no idea about those two.

According to the city budget, Police get $1.2million in overtime pay.  That is the first place I would look for cuts.  If we can't afford raises, we can't afford OT.

If you want to see their budgets, they are available to view here:

http://www.ci.omaha.ne.us/departments/f ... F_fire.pdf

and here:

http://www.ci.omaha.ne.us/departments/f ... police.pdf

The entire city budget is here:

http://www.ci.omaha.ne.us/departments/f ... efault.htm

[Brad]

According to the city budget, Police get $1.2million in overtime pay.  That is the first place I would look for cuts.  If we can't afford raises, we can't afford OT.

How much of that gets reimbursed.  I always heard that The Qwest Center/Omaha Royals/Civic Auditorium always reimbursed the city for overtime for officers working their events???

[TechnicalDisaster]

According to the city budget, Police get $1.2million in overtime pay.  That is the first place I would look for cuts.  If we can't afford raises, we can't afford OT.

How much of that gets reimbursed.  I always heard that The Qwest Center/Omaha Royals/Civic Auditorium always reimbursed the city for overtime for officers working their events???

Police pensions are based on your best year of pay, so even if that OT is repaid in a Qwest reimbursement, tax payers have to foot the bill every year we pay for pensions.  Stop OT, you cut the cost of pensions immediately, until the loophole is fixed.

But, the only reimbursements reported in the Police budget are from these agencies:

The allowance for reimbursement is comprised of federal, state and local funding. The School Resource Officer
Grant, Justice Assistance Grants, Byrne Discretionary Grant, GREAT Grant, Truancy Grant and Homeland Security
Grant are the federal and local portions of the reimbursements. The State reimbursements are from the
Metropolitan Area Drug Task Force and Violence Against Women Grants.

If Qwest is reimbursing the city for police, that money isn't reflected in the police budget as far as I can see.  I did a search of the entire budget and only reimbursements from Qwest are the listed debt payments.  It might be reported somewhere else through a MECA budget?