Neb. high court rules for city in hotel tax case - Washington Examiner
A ballot-box challenge to the way the city of North Platte spends hotel tax revenue is invalid because it forced residents to cast one vote on two unrelated issues, the Nebraska Supreme Court ruled Friday.
The court ruled that the two issues for voters — whether to use the money to pay off a federal loan, and spend the rest on property tax relief — did not have a "natural and necessary" connection.
"Because the petition presented distinct but dual propositions for a single vote, voters could not express a preference on either without approving or rejecting both," the court said in its ruling.
The ruling was the newest development in a fight over the hotel tax, which was enacted in 1999 specifically to fund a visitor's center and a local landmark celebrating the western Nebraska city's railroad heritage. The 2 percent tax is to be collected through February 2029, when a federal loan for the project is expected to be paid off.
William Tilgner, Dallas Dye and Edward Rieker — all members of the Western Nebraska Taxpayers Association — gathered signatures in 2009 to get a referendum on the ballot. Their petition specified that the tax revenue be used only to pay off a U.S. Department of Agriculture loan that helped build and operate the Golden Spike Tower, and put all other hotel tax revenue toward property tax relief.
The city filed a lawsuit, arguing that the issue didn't qualify for a vote, and a judge decided to keep the referendum off last year's ballot. The three men appealed, and the state's highest court agreed to hear the case.
Under a 2004 agreement, North Platte agreed to turn over all the hotel tax revenue to a not-for-profit corporation in exchange for construction and operation of the Golden Spike Tower and visitor's center. Now complete, the 120-foot-tall tower overlooks the Union Pacific rail yard at North Platte — believed to be the world's largest rail yard — and the center features educational and historical displays. The city has the option of buying the attraction for $1 once the federal loan is paid off.
The referendum was printed on the May 2010 ballot, but a Lincoln County judge threw out the petition just before the election and instructed the county clerk not to count those votes. The judge agreed with city attorneys that state law prohibits petition referendums on measures that are needed to fulfill contractual obligations, such as the one that created the hotel tax.
The three men argued in their appeal that the hotel tax isn't subject to that state law because it applies only to measures required to carry out contractual obligations for projects that had been approved by an earlier measure that could be subject to referendum. For example, if a measure was passed to approve a project and a second measure was approved to fund that project, then the second measure couldn't be altered through the petition process, but the first measure could.
Gene Summerlin, an attorney for the three men, noted Friday that the court rejected that argument and sided with his clients on three out of the four arguments presented in the case.
North Platte City Attorney Doug Stack was not immediately available.
The residents also argued that no formal measure was ever passed to approve the Golden Spike project, so the hotel tax isn't protected from the petition process.
The city of North Platte agrees that there was no formal measure to approve the Golden Spike project but a motion was passed to authorize the contract with the private corporation, which can be considered a resolution and would make the state law applicable.
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Online:
Golden Spike Tower: http://www.goldenspiketower.com/
Nebraska Supreme Court: http://www.supremecourt.ne.gov/
24 Sep, 2011--
Source: http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNHESiC3VtEJJqLe5tV0G_ypliHMjQ&url=http://washingtonexaminer.com/entertainment/2011/09/neb-high-court-rules-city-hotel-tax-case
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