Occupation tax OK'd on first reading

Tuesday, March 6, 2018

McCOOK, Neb. — A lodging occupation tax is a way to offset the property tax burden, according to McCook City staff.

It’s a way to distribute the burden more equally and a revenue stream not paid by City of McCook people, said Nate Schneider, McCook City Manager.

Asked about the original intent of the tax by Council member Janet Hepp, Schneider said at the regular McCook City Council meeting Monday night that staff has been trying for the past three years to find additional revenue to add to the general fund. He cited police and ambulance requests the city was unable to purchase last year, adding that with the occupation tax, “hopefully we would not increase the levy or raise the property tax.”

The council unanimously approved a 4 percent lodging occupation tax on its first reading Monday night, with proceeds going to the general fund. The tax would apply to those staying at McCook hotels or other lodging facilities and be implemented in July.

Schneider said he came to the 4 percent rate based on past council discussions that leaned toward the higher rate and what has been used in other similar-sized cities in Nebraska. Based on occupation rates the past few years at local motels, he told the council the tax could raise an additional $120,000 -130,000 in revenue.

City occupation taxes range from 6 percent in Alliance, with proceeds funding the Alliance Visitors Bureau to North Platte at 2 percent. Holdrege has a 4 percent rate. Some cities used the proceeds to fund specific projects, such as Norfolk’s 4 percent occupation tax that sunsets in 2022 and goes to a water park fund.

Hepp also asked if the city had a specific recreational fund and Schneider said all recreational facilities in the city, such as parks, ballparks, the pool, airport and streets, are funded through the general fund.

“Just because we aren’t earmarking it doesn’t mean it’s not being utilized,” he said.

Councilman Gene Weedin agreed that the general fund was a good place for occupation tax revenue as it gives the city more leeway in designating the money. “Maybe one year we need an ambulance, another year something else. It won’t restrict us in what we can do with the money,” he said.

Mayor Mike Gonzales added that the city has a variety of needs to be addressed, highlighted especially during the budget season, such as streets, the pool and city auditorium. 

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