LINCOLN — Two Omaha lawmakers are taking aim at the University of Nebraska Medical Center's request for money from local government to help build its new cancer center.
State Sen. Brad Ashford said Friday he plans to seek $40 million in state funds during the upcoming legislative session to replace the contributions promised by the City of Omaha and Douglas County.
“This is a state project. It ought to be paid for out of state money,” Ashford said. “The state ought to take the responsibility for funding its own education institutions.”
Ashford, who is running for mayor of Omaha, said the city should not have been put on the spot to come up with $35 million or risk losing the cancer center.
He said university officials should have come to the Legislature if more money was needed for the center.
Sen. Bob Krist plans to co-sponsor the bill, as well as introduce legislation setting stricter limits on occupation taxes. The city turned to an occupation tax on tobacco to fund its contribution.
“Where does it stop?” Krist asked. “It's the state's responsibility to fund the university and its programs.”
He said the bill would set out a legal definition for occupation taxes that would not include taxes charged at the point of sale.
His proposal also would specify how occupation taxes could be used and would impose a penalty for collecting more than $6 million a year from a particular tax.
A law passed earlier this year allows cities to levy occupation taxes without seeking voter approval if the tax is expected to yield less than $6 million a year.
Krist said his proposal would require cities to reduce an occupation tax by the amount collected above the $6 million limit.
The City Council this fall approved a 3 percent occupation tax on cigarettes to generate $35 million for the center. The 3 percent tax adds some 15 cents to the average price of around $5.10 for a pack of cigarettes. A public vote was not required because the tax would raise less than $6 million a year.
The Douglas County Board voted to provide $500,000 a year for 10 years, for a total of $5 million. The money is to come from the county's inheritance tax revenue.
Omaha City Councilman Chris Jerram, who cosponsored the city's tobacco tax ordinance, said the idea of getting state money is “highly speculative” and “a long way down the road” from getting approval from the Legislature and Gov. Dave Heineman.
If the Legislature fully replaced the local funding, Jerram said he would look at whether the city needed to continue its tobacco tax ordinance.
But Jerram also said the local funding already is impressing philanthropic foundations and donors, and he'd hate to see “even the best intentioned bill” spook off donors.
The medical center plans to use the city and county contributions, along with private donations and $50 million of previously approved state funds, for a $370 million project.
The centerpiece of the project is a $323 million cancer center: a $110 million research tower; a $63 million, 108-bed inpatient center; and a $150 million outpatient center.
A $47 million ambulatory, or nonemergency, center would bring the total project cost to $370 million. That center would not be cancer-related.
World-Herald staff writer Jeffrey Robb contributed to this report.
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