As Omaha Mayor Jim Suttle prepares to raise property taxes, Suttle is defending his campaign promise to cut those taxes.

Earlier this year when he was running for Mayor, Suttle aired at least two campaign commercials promising, “…to lower property taxes.”

During a city hall news conference last Thursday, Nebraska Watchdog asked Suttle if he broke that promise. The Mayor would not say yes or no but did say that on May 15th, three days after the election, he was “blindsided” by some bad economic news.

That was the day former Omaha Mayor Mike Fahey announced the latest city sales tax receipts. Those numbers showed the March 2009 receipts were down $1 million from March of 2008.

Suttle says those figures drastically changed the city’s budget picture. Overall the sales tax receipts for January and February combined were up $400,000 from the same two months in 2008.

Suttle, who spent the last four years on the City Council and was a member of the council’s finance committee which oversees the budget, says he did not expect the March numbers to fall so far.

Former Omaha City Finance Director Carol Ebdon tells Nebraska Watchdog that although the January and February sales tax receipts were up, other economic indicators were falling behind including building permits and recycling revenue. Ebdon says the city council’s, “… finance committee members knew there were concerns.”

Former Omaha City Councilman Frank Brown who was on the finance committee with Suttle tells Nebraska Watchdog that at the beginning of 2009 the budget was, “…$5 million in the hole and in a few months it was worse. I can’t imagine someone on the City Council not knowing.” (Omaha City Councilman Chuck Sigerson who is recovering from a stroke and heart attack was the third member of the committee.)

According to an investigation by Nebraska Watchdog the city’s budget problems were well documented and date back several months before Suttle promised to cut property taxes.

In addition Nebraska Watchdog has obtained a transcript of a confidential candidate interview conducted by the Omaha Chamber of Commerce with Suttle on September 29th, 2008.  According to the transcript when Suttle was discussing the financing of the new downtown ball park Suttle expressed concern over the city budget,  “I’m nervous about Keno and the hotel tax and the car rental, what’s going on with the economy and what’s going on with other factors.”

The public records regarding the city’s budget problems date back over a year.

• July 16th, 2008: In the 2009 recommended budget prepared for the City Council Ebdon wrote, “General Fund Revenues are not keeping up with inflation, many are stagnant or even declining.”
• December 2nd, 2008: Mayor Mike Fahey holds a news conference to discuss the possibility of cutting $4 million from the 2009 budget and “…projects that sales tax revenue, which makes up 46% of our General Fund Revenue, will stay flat in 2009.”
• December 23rd, 2008: Fahey announces a plan to cut $6.2 million from the 2009 budget.
• January 27, 2009: During the annual State of the City Address Fahey said, “As we begin 2009 and start to prepare our 2010 budget, we will be faced with ongoing economic uncertainty.”
• May 1st, 2009: Fahey announces the December budget cuts do not go far enough, “Unfortunately, those cuts are not the end of the recession’s impact on Omaha…we now project an additional $6.5 million shortfall.” Fahey tells reporters the next Mayor may have to raise property taxes.

Asked by Nebraska Watchdog if the Fahey administration ever believed a tax cut in the 2010 budget was possible Ebdon said, “I don’t think anyone in the administration thought that was likely.”

Reported by Joe Jordan, joe@nebraskawatchdog.org