Restaurant Tax Legacy

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Episode Transcript

Speaker 1 (00:00):
Welcome to Check with Chip. Brought to you by Operation
Blue Dot Red turning second District Blue Dots Red, one
podcast at a time. Last week, at one of our
many evening classes and workshops we hold at retire Smart,
I was chatting with folks who are conservative Republicans. They
brought up former Mayor Gene Stothard's show on KFAB. I said,

(00:23):
I had not been able to catch much of it yet,
but what I heard sounded good. They said she's doing
a great job and they are fans of hers, but
they said she does aggravate them when she brings up
the restaurant tax and says it was never meant to
be temporary. That was on Thursday evening. By coincidence, the
previous morning, we had mentioned the restaurant tax on our

(00:44):
Retire Smart radio show that has recorded Wednesday morning and
airs on the weekend. So our reference to the restaurant
tax was broadcast on KFAB this past weekend. Gene Stothard
heard it and contacted me. She said, tell your bosus,
the restaurant tax was never meant to be temporary. She
provided detailed data on the restaurant tax and other city

(01:07):
fiscal and budget matters. It was great info. I thanked
her and congratulated her on the new radio show. But
something kept gnawing at me, something didn't sit right. I
finally figured it out. You see, I was in the
middle of some of the action at city Hall from
twenty ten to twenty thirteen, the year Gene was first

(01:29):
elected mayor. I was the spokesman for the Omaha Alliance
for the Private Sector, founded by Dave Nabady to advocate
for small businesses at city Hall on all manner of
fiscal and regulatory issues. I think I know where the
problem is in Gene's position on the restaurant tax. I
think I figured out where the disconnect occurs. I think

(01:51):
two things may be true and may explain the impasse
over the restaurant tax. One is that the people who
pushed for the restaurant tax, the people who wanted it,
the police and fire unions and city hall democrats such
as then Mayor Jim Suttle, did not view it as temporary.

(02:11):
They wanted a permanent new revenue stream dedicated to police
and fire pension funds. Gene is right when she says
there's nothing in the ordinance enacting the restaurant tax. That
says the tax is temporary. But here's the other thing
that's true. Jeene Stothard separated herself from the pack at

(02:31):
city Hall by leading the fight against the restaurant tax
as a city council member. At events put on by
the Alliance for the Private Sector, she railed against that tax.
It got a lot of us fired up. It was
a main catalyst of her first campaign for mayor in
twenty thirteen. The Flatwater Free Press published a story a

(02:51):
few months ago picked up by the Omaha World Herald
that revisited some of this history. The story included this
campaigned on eliminating the restaurant tax, but the Republican acknowledged
it would be difficult to do right away. Then, the
story quoted Stothart, the twenty thirteen mayoral candidate, to repeal it.

(03:12):
We will have to replace that twenty five million dollars
with something else. With smarter budgets, decreasing spending, and the
city running more efficiently, we can accomplish this, Stothard said
in an Omaha World Herald candidate survey. So it's right
there on the public record. We can accomplish this repeal

(03:33):
of the restaurant tax. As I read the story, I
recalled how many of us rallied to Gene as the
avenging angel who would swoop in and slay that insidious
tax that she acknowledged unfairly targeted one industry full of
small business owners. The story explained that once in office,
Mayor stothardt changed her position on the restaurant tax. From

(03:56):
the story, the biggest change to the tax during Stothard's
tenure came in twenty sixteen, when she supported expanding it
to food trucks. Stothard told Flatwater it would have been
quote financially irresponsible to ask the council to repeal it
end quote, noting that cutting tens of millions of dollars

(04:17):
from the budget would hinder the police and fire departments.
Slashing property tax levies, she said, was more beneficial than
nixing the restaurant tax, which didn't end up hurting restaurant
owners as she had initially feared. The story again quoted Stothard,
property owners must pay property taxes. If people don't want

(04:40):
to pay the two and a half percent restaurant tax,
they have the option to not eat in Omaha restaurants.
So as Mayor. Jene concluded that it was not possible
to reduce the property tax burden and the sales tax
burden on restaurant meals, and decided the property tax was
the bigger priority. Politicians are allowed to change their minds.

(05:02):
I know what it's like when you get into office
and actually dig into budgets and tax raids and start
crunching numbers and realize this looks different from the inside
than it looked from the outside. The problem, as I
see it, is that Gene created the impression in twenty
thirteen that she saw the restaurant tax as temporary. She

(05:24):
created the expectation that the tax would be temporary if
she won, that even if it took a few years,
its repeal would be accomplished by a Stouthard administration. That's
why there's still is backlash today. When Gene says the
restaurant tax was never considered temporary, we thought she was saying,

(05:45):
elect me, and you'll see just how temporary this tax is.
The blue dot red angle on This is the frustration
we read folks often feel over tax policy. Some of
you are old enough as I am, to remember Bush
forty one's infamous promise read my lips, no new taxes.
For some of us, the restaurant tax has joined the

(06:08):
rogue's gallery of quote unquote temporary local, state, and federal
taxes that are still on the books. When the restaurant
tax was enacted in twenty ten, then Mayor Subtle said,
it's only twenty five cents added to a ten dollars tab.
What's the big deal? But that's how every tax is presented.

(06:30):
We just need this tiny little nibble out of a
budget of millions or billions or trillions. When dozens or
hundreds of claimants succeed at this game, it adds up
in accumulated income, property and sales taxes, plus all kinds
of quote unquote fees that are really taxes. I believe

(06:52):
the honorable Genie Stothard will go down as one of
the greatest mayors of Omaha, certainly in my lifetime, and
she may not be done. I also note that Gene
faced reelection twice in twenty seventeen and twenty twenty one
after announcing her switch to the property tax as her
focus for tax reform, and she won. Was it a

(07:14):
factor in her twenty twenty five defeat. I doubt it.
I think the fallout from the restaurant tax dissipated over time.
I think the growing blue dot phenomenon was a major factor.
It's a visceral, gut level impulse to defy red state
Nebraska in any and every way possible. It's why I'm

(07:36):
writing books and doing this podcast to turn the blue
dot red. Republicans running for Congress have huge friendly chunks
of Sarpy and Saunders Counties to help them counteract the
impact of the blue dot in Douglas County. A Republican
candidate for mayor of Omaha does battle without those reinforcements

(07:56):
from the south and west. Anyway, I hope might take
reconciles or at least clarifies the conflicting views of the
nature and legacy of the restaurant tax. Now let's get
back to the mission of turning the blue dot red.
Fix it now, Chip dot com. That's where you can
find those books I mentioned. Fix it now, Chip dot com.

(08:20):
That's check with Chip. I'm Chip Maxwell. Thank you for listening.