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Sen. Mike Groene

Sen. Mike Groene

District 42

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Home District Column 9/27/2018

September 27th, 2018

I continue to be a critic of cities misusing Tax Increment Financing (TIF) for solely economic purposes because I understand that high property taxes are the “cause” and TIF abuse is the “effect”. This past year, special interest groups won as I unsuccessfully fought the passage of LB496 which added private housing construction costs to expenses that developers could recover by the diversion of TIF tax dollars. We need to pause and be concerned when builders are telling us that avoidance of high property taxes are the deciding factor if building homes is profitable or not.

Our freedom is protected by the rule of law. Without it, a society fails. When does “the end justify the means”? Is it ok to speed because you’re late for work? Is it ok to steal because your family is hungry? Is it ok to bend the use of TIF for purposes unrelated to urban renewal? Where do we stop and how minor a cause is defensible? I prefer not to start.

I drove by the proposed Philips and Dixie area being considered for designation as blighted and substandard. I fail to see how it fits into the constitutional or statutory language defining such an area. The area has been developed over the last 20 years, infrastructure is in place and the only reason it is not fully developed is that the present owner originally had plans other than residential use.

Building new homes is a desirable economic activity, what means are used to encourage it is the debatable question. The final answer rests with an elected city council and mayor; the appointed members of the Planning Commission and Community Development Authority can only recommend what they deem to be allowable under state statute and city ordinance. Without clear guidance from elected officials, they cannot be blamed for the conclusions they come to. The buck stops with the elected officials.

I am a firm believer in defining the problem and fixing the cause. Here are some facts I hope the city council will consider:

1)      Since the 2010 Census, North Platte’s population has declined by an estimated 845 to 23,888. The county has declined 1,008 to 35,280. With simple math and using a family of four, over the last seven years there should be well over 200 additional housing units available.

2)      Recent news stories have noted that between three large local employers there are over 300 good paying jobs going unfilled. Based on what I have heard from other employers, the total countywide is closer to 500.

3)      Of the top 25 cities by population, North Platte has the 6th highest property tax rate in the state. When I talk to citizens who leave the area, property taxes is the second major reason for doing so behind following extended family members to where they have relocated. It must be remembered that the family who buys a TIF’d house will receive none of the benefits, they will pay market price and they will pay high property taxes on their home.

4)      Hard working North Platte area citizens rely on the value of their homes being part of their retirement equity. When government injects a stimulant into a market, it drives down the price of existing homes and hampers those contractors who choose to build on free market principles. Is one of the city council’s goals to improve the housing market by lowering home prices at the expense of existing homeowners?

TIF is meant for urban renewal. A recent housing study pointed out what is already known: poor housing quality exists in our oldest urban areas, yet there has never been a TIF project north of B Street. Could a better approach be to give contractors of all sizes an opportunity to use TIF in an older neighborhood to replace, one at a time, homes or small business properties in poor condition?

There are many reasons why people live where they do: job, taxes, lifestyle, family, climate, shopping and educational opportunities, but I have yet to meet someone who moved to a city for the perfect home in which they can watch TV and sleep.

Sen. Mike Groene

District 42
Room #1306
P.O. Box 94604
Lincoln, NE 68509
Phone: (402) 471-2729
Email: mgroene@leg.ne.gov
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