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I have recently been contacted by constituents concerning the Nebraska Advantage Act (NAA). It seems its value to Lincoln County is being misrepresented to them. It is a complicated issue that when explained, is easily understood.
The Act was created in 2005 to replace Nebraska’s first major economic development effort, LB775, which was passed in 1987 primarily to keep ConAgra from moving its headquarters out of Nebraska; it did keep them in Omaha another 30 years before finally moving to Chicago. I am not a fan of the present Advantage Act. It is not rural friendly, it involves prohibitive paperwork that discourages smaller rural companies from applying and it has not done what it was supposed to do: create high-paying jobs.
Some facts from its first 11 years in operation: 408 projects were in effect at the end of 2017 with a handful more having been completed. All projects combined have received $905.4 million in tax-credits; of those, businesses have so far claimed $415.1 million against their tax-liability ($52.5 million in 2017). It has created only 16,337 jobs, amounting to a taxpayer cost of $25,413 per job. No one in the economic development arena believes the Advantage Act has delivered a good return on taxpayer investment. In Lincoln County over the same 11 years, only two projects that could claim to have created jobs have used the economic incentive: Greenbrier in Hershey and the ethanol plant in Sutherland. The reality is that the NAA is a badly written, rigid economic development tool that favors large corporations who have the legal and accounting staff to wade through the requirements. The idea of the NAA was to attract good-paying factory and technology jobs to Nebraska. Instead, a large percentage of applicants are retail in nature and the largest users of the investment credit portion of the Act have not been manufacturers, but companies that are heavy in infrastructure with limited job creation, for example: windmill farms and data centers (Facebook).
The NAA was set to sunset last year. My second year in Lincoln, 2016, a bill was introduced to extend the sunset to 2020; at that time, rural senators were in the midst of a floor campaign to draw attention to the fact that excessive property taxes were harming rural Nebraska’s economy so we used the NAA extension as a bargaining tool. That strategy worked and there is now a clear (sunny) understanding in the Legislature that property tax reform and the development of a new statewide economic development plan must go hand in hand.
I am an appointed member of the Legislature’s Economic Development Task Force. Everyone involved from the State Chamber of Commerce, Nebraska Economic Development Department and members of the Legislature agree that the present Advantage Act should be allowed to sunset in 2020 and most agree we need to create a new, simpler economic development plan. The biggest complaint from businesses interested in locating in Nebraska is the over-complicated NAA application process followed by the burdensome reporting requirements. As a member of the Task Force, I plan to concentrate on making sure any new plan includes opportunities for small rural Nebraska businesses and gives added benefits to large companies that locate in rural areas. It must concentrate on new job creation in business areas that attract peripheral economic growth in retail and service businesses. It must also include provisions that are free-flowing, which allow the Governor and his Department of Economic Development room to react to large projects that may require inputs that cannot be foreseen in legislation. Finally, workforce development is another aspect of any economic development effort; as you all know, I am a huge proponent of encouraging our youth to pursue an education in the hands-on trades of electrician, plumber, welding, transportation (CDL drivers), etc. That means more rural blue-collar workers and more students in our community colleges.
It is easy to be trapped into believing that the status quo is good enough and attack those who seek a better answer. I believe the future of Lincoln County is bright; my job is to get the government out of your way and deliver the right economic tools for you to get the job done.
Contact Sen. Mike Groene: firstname.lastname@example.org or 402-471-2729.