A host city should protect its reputation

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Lincoln should never take for granted a reputation as a good host city for conventions, tournaments and other events that draw people from across Nebraska.
But city officials seem to be risking Lincoln's reputation with a proposal to annex the state fairgrounds and begin imposing the city sales tax on events there.

Here's what Van Neidig of Battle Creek had to say of the proposal: "I think the thought of that is an insult to the wishes and intentions of the voters of the state of Nebraska. It's selfish, it's self-serving, it's reactionary."

We suspect that Neidig's views will be widely shared across the state if the city exercises that option.

At the same time, there's little doubt that the local community faces painful choices as it searches for a way to come up with about $200,000 a year as the required local match for about $2 million in state lottery proceeds under the terms of Amendment 4 approved by voters in November.

The city is facing a record revenue shortfall in the magnitude of $8.7 million next year, largely due to lagging sales tax revenues.

It's worth noting, however, that financial analyst Charles Lamphear, former director of the Bureau of Business Research at the University of Nebraska-Lincoln, last year estimated the local economic impact of the fair and other fairgrounds-related events at $27.8 million. Lamphear said he used very conservative methodology to arrive at the figure and suggested the economic impact could be has high as $32 million to $33 million.

Judging from that analysis, the local community got a pretty good deal when Nebraska voters, by a substantial margin, agreed to supply a revenue stream of $2 million a year to help improve the State Fair.

We doubt very much that voters, having just dug into their pockets to help the fair, expected to find the city of Lincoln's fingers rummaging around for a few cents more.

As Roger Henrichs, president of the Nebraska State Fair Board, put it, imposition of the city sales tax will be a bigger expense on the fair's bottom line and will help push up prices.

In happier times, the city of Lincoln might have been able to begin charging a city sales tax at the fairgrounds without ruffling feathers.

But under today's circumstances, annexation and imposition of Lincoln's city sales tax at the fairgrounds could be seen as ungrateful and inhospitable. The money raised by the tax might not be worth the long-term damage to Lincoln's image as a host city.