Omaha will put infrastructure bond proposal to voters
Omaha, Nebraska, voters will decide if the city can sell up to $200 million of debt to fix roads.
The city council on Tuesday night voted unanimously to put the proposal on the May ballot.
The bond measure will ask voters to raise property taxes to fund up to $200 million of general obligation bonds to pay for road repairs throughout the city. Omaha city officials said it would cost homeowners roughly $35 a year in property taxes for every $100,000 in valuation.
Omaha Mayor Jean Stothert first announced the plan on Jan. 23.
“The condition of our streets is a top priority for me and for our taxpayers,” Stothert said in a statement. “Our streets have been underfunded for at least 50 years. We can stop the deterioration of our infrastructure but it will take all of us to agree it’s worth the expense. Our needs are greater than our revenue.”
Stothert said the money would close a $34 million gap between what the city currently spends on roads and resurfacing projects and what it should spend.
Last year, Stothert consulted with a team of independent engineering experts to evaluate current street infrastructure and estimate the cost to develop the city’s first pavement rehabilitation and reconstruction program. The city spends $41 million a year on street repairs but the evaluation showed it needs to be spending at least $75 million a year. The $200 million in bond funding would allow the city to put $40 million more into street repairs each year for five years.
Stothert said that the bonding proposal lets voters make the decision.
“A long-term funding solution will reduce annual repair costs but we have to make the financial commitment,” she said. “Without voter approval, we will continue to prioritize spending on road infrastructure, but we will never catch up and the funding gap will increase.”
Other options considered included an increase in the wheel tax, sales tax or property tax. Stothert said she would not support a tax increase that does not have voter approval.
Omaha has roughly $600 million in outstanding GO debt that is rated Aa2 by Moody’s Investors Service and AA-plus by S&P Global Markets. The outlook is stable.
Doug Kagan, the longtime leader of Nebraska Taxpayers for Freedom, spoke at a council hearing last week.
“Delaying reconstruction will only cause additional financial obligation in the future,” Kagan said. “We believe that our mayor has managed city finances prudently with pledges to squeeze the city budget in several ways and a promise to lower the property tax impact from the bond issue if possible.”
Nebraska Governor Pete Ricketts in his State of the State speech said lowering property taxes is a top legislative priority. Ricketts is backing a bill which would provide about a 13% to 15% break in property taxes paid to schools.
Ricketts said that the Omaha bond measure highlights the importance of putting property tax increases to voters.
"The taxpayers need to evaluate whether or not they want to vote this down or vote it up,” Ricketts said. “Therefore, the property tax payers in Omaha have that in their hands whether they want to raise their own property taxes."