Proponents of restricting money for the Golden Spike Visitors Center fired back in court Thursday, answering the city’s motion to kill the Golden Spike/occupancy tax ballot initiative. The city claims that it is illegal to put the issue before a vote of the people.
The ballot initiative, if approved by voters, would move the occupancy tax money left over after the Spike’s USDA loan payments are made and return it to the city as property tax relief.
The city alleges that Nebraska law prohibits the referendum process from interfering in a contractual obligation.
However, the defendants maintain the city/Spike contract is an “option agreement” and does not rise to the level of an obligation.
The city has an agreement with the Spike to provide occupancy tax funds to the project until 2029. Occupancy taxes come from a surcharge on motel rooms.
Further, the defendants allege that the agreement is unlawful because the “option agreement” was never subjected to city voters as required by law.
They also state that it is illegal for the city to give tax dollars to a private corporation’s endeavor because it is “violative of the Plaintiff’s (city’s) own law.”
The city also maintains that the initiative attempts to repeal a measure and enact a new one at the same time is a violation of state law.
According to the defendants, their sole goal is to amend an ordinance.
Finally, the city’s suit accused the defendants of violating the Nebraska Constitution by combining two unrelated questions into one issue on one ballot. The defendants denied this and moved that the complaint be dismissed at the city’s cost.
Petition sponsors William Tilgner and Dallas Dye filed together. Another sponsor, Edward Rieker, filed on his own and went a step further.
Attorney George Clough represents all three.
Rieker filed an alternative counterclaim, saying he is entitled to an injunction preventing the city from disbursing occupancy tax dollars to the Golden Spike.
Rieker alleges the Spike is a private corporation and funding it with tax dollars is a violation of both the state constitution and the city ordinance that enacted the occupancy tax.
According to the counterclaim, that city ordinance reads, “…that revenue collected on hotel accommodations shall be used by the city to assist the city (emphasis added) in constructing and operating a visitors center promoting the city’s railroad heritage.”
Rieker claims the Spike is not a city project but the project of a private entity.
“In the event that the (city) prevails on any one or more of its causes of action” Rieker asked for an injunction barring the tax funds from going to the Golden Spike.
The court has yet to rule.
The question will go before voters in the primary election. The city council has approved the wording for the ballot.
If the court rules in the city's favor, those votes won't count.
Early voting begins April 5.