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Mayor drops home stimulus proposal

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BY DEENA WINTER / Lincoln Journal Star

Thursday, Sep 18, 2008 - 06:03:41 pm CDT

Mayor Chris Beutler announced Thursday he has decided to stop pushing a city home stimulus plan that would have given grants to people who buy homes.

He said it was clear the proposal wasn’t getting traction at the City Council or with the public.

“A wise man once told me that you shouldn’t try to ride a lame horse,” he said. “Well, it appears the home stimulus package is ailing and it’s time for the mayor to dismount.”

Story Photo
Mayor Chris Beutler

His plan would have offered cash grants of $1,000 to $5,000 to people who bought new homes worth up to $325,000 or existing homes worth up to $150,000.

Beutler said it’s his job to offer ideas to try to improve Lincoln;  some of those ideas work and some don’t.

“It is clear the community wants us to focus our time and resources on other needs,” he said. “I got the message.”

The stimulus wasn’t embraced by the pro-growth, pro-homebuilder City Council as warmly as expected; Beutler originally included it in his budget, but the City Council didn’t pass it, saying it preferred to deal with the issue separate from the budget.

Last month, the mayor announced revisions crafted by homebuilders and Realtors — who offered to kick in $100,000 for the program. Beutler had proposed funding the program with $600,000 from the city’s $10 million Special Assessment Revolving Fund.

But the need for a local stimulus package seemed less pressing after the federal government came out with a housing stimulus.

Councilman Ken Svoboda said considering the national mortgage crisis, it’s probably best not to tinker with a local program.

“I’m a little bit disappointed, although I knew it was going to be a tough sell with some of my colleagues,” he said.

He said he thinks the council would have been more receptive if it had been brought into discussions earlier.

“They felt that they were blindsided immediately and that kind of set everybody off on a wrong path,” he said.

He didn’t like the original proposal, but worked with the administration and home builders and Realtors to come up with revisions he thought the council would eventually pass.

“It was probably best just not to allow it to continue and give people false hope,” he said.

Beutler said despite having to back away from the stimulus proposal, he feels he’s done “very well” getting his agenda accomplished in the first year-and-a-half as mayor.

“As things go, this was not a huge deal overall,” he said. “I don’t feel badly about it. You can’t hit on all cylinders every time.”

Reach Deena Winter at 473-2642 or dwinter@journalstar.com.


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whatever wrote on September 18, 2008 6:45 pm:
" A dumb idea from the beginning. Lincoln's fiscally irresponsible builders and their buddies on the City Council certainly don't need to be feeding at the welfare trough and that is exactly what it was. Good decision Beutler, never bring this idea up again. "
Linda wrote on September 18, 2008 7:49 pm:
" Thank you, Mayor Beutler. I really don't think this would have prompted folks to buy real estate. You recognized it from the lack of support and you have moved on. Thank you! Too many times, we the citizen of Lincoln, never hear anyone say this idea won't fly. We all feel that too many personal ideas and agendas dictate what gets put into motion. Thank you. "
Max A. wrote on September 18, 2008 8:20 pm:
" Yahoo! The Mayor got it! Thank you Mr. Mayor for using your common sense on this issue. We the taxpayers could not afford this idea. "
George J. wrote on September 18, 2008 8:35 pm:
" Smartest thing he has done all week! "
Harry the Antenna Guy wrote on September 18, 2008 9:19 pm:
" Foolish idea from the start. Maybe he can be trained. "
New to Lincoln wrote on September 18, 2008 9:24 pm:
" Great job way to go Now listen to the people about not spending any more taxpayer money on that white elephant that is called an arena. "
Mark wrote on September 18, 2008 9:39 pm:
" Hey Mr. Mayor and city council, here's a news flash: Maybe if you people would start getting some decent paying jobs here like heavy manufacturing perhaps then people who were making a decent living wage could pay their taxes, support their family, and maybe, just maybe people might consider buying homes. Please get Lincoln out of the red and get some good jobs around here. Stop catering to the university and think about the working men and women who are trying to survive. "
Shane wrote on September 18, 2008 10:31 pm:
" Mark here is a newsflash for you. Those jobs were here in Lincoln and in many other points across the USA but are now in Mexico or overseas. That is NOT a Lincoln problem that is a NATIONAL problem. Perhaps when big business and their stockholders are readay to think about something other than only their bottom line then a compromise can be reached. Just going for the cheapest labor possible isn't good for the country.

The tech park should generate well paid jobs and keep more of the college graduates here and put most of the lande at the fairground back on the tax rolls "
Ross wrote on September 19, 2008 1:21 am:
" This idea is beyond the understanding of most readers. Too bad basic Economics instruction isn't a mandatory prerequisite for citizenship (or for a job as a newspaper editor). The Housing Stimulus proposal would have been good for everyone in Lincoln even if everyone didn't recognize it. At most the proposal called for a $4,000 investment from the City, the builder was to pay another $1,000. In turn the city would collect $4,700 in impact fees, about $1,500 in sales tax on materials; the construction workers get paid and keep their jobs; the city gets sales tax on the wages the construction workers spend in the community; suppliers, sales people, retailers all earn wages and get to keep their jobs; the city gets sales tax on their spending; and so on. PLUS the consumer (not the builder) gets $5,000 to spend locally so the cycle continues and the city takes in even more money. This was never a subsidy for builders, it was a money-maker for the city. And, if no new homes are sold under the program the city doesn't invest a dime. "
Maybe wrote on September 19, 2008 7:12 am:
" Maybe we should drop the Mayor. Another hair brain idea he tried shoving down the throats of taxpayers. "
Outside the Box wrote on September 19, 2008 8:27 am:
" The mayor has regained my full respect by listening to the voices of his citizens. Good job! "
isotope wrote on September 19, 2008 8:41 am:
" Ah..Ross..you make it all sound so rosy. But not all the money would have gone for new homes (so there goes the impact fees, construction sales,etc. in your formula), and not all the new homes would have been at the upper scale of $325,000. In addition, you don't calculate the costs of adding new homes and growing Lincoln - sewers, fire & police support, roads, lighting, and other services. Plus, you also have to consider that some of the homes would have sold anyway without the handouts, to get a true ROI on the stimulus plan. Your haughtily stated "economics" lesson is a bit one-sided - there are costs as well as benefits to growth. "
Beaker wrote on September 19, 2008 8:59 am:
" Ross, as an informed reader, I disagree. "Your cycle" that is mentioned only perppetuates a problem. Yes it would save some people's jobs, but all it is a is a subisdy for failing sector. Every sector is cyclical, it can't just continue to grow and grow. There are down turns and up turns. We are currently in a down turn. It could be due to over building and too much inventory, over priced homes, poor credit decisions and the current financial markets, but it is just that a down turn.

This subsidy would only strech out the pain. It burdens the taxpayers who are struggling as it is already. Is it better that the few suffer for the many? Sometimes it is. You can't spend your way out of a down turn, the current administrations all over the country have proven that. Plus, what happens when/if no one has any money left or we just continue to increase debt? WE all become indentured servants of the financial systems, local, federal, and foreign governments. The more debt you have, the less freedom you have. Think about it.

Sometimes you have to take your lumps and bruises, and fight on. The government should not be a security blanket for evey sector of business. It can't afford to be, or communism would not have failed for a reason. "

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