NEBRASKA LEGISLATURE

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Sen. Mike Groene

Sen. Mike Groene

District 42

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Home District Column 08/01
August 2nd, 2019

I strive to base the decisions and positions I take as your State Senator on truth and facts. For instance, you are well aware of my opposition to the statewide misuse of Tax Increment Financing (TIF). The state constitutional intent of the practice is clear. It is to be used for the betterment of the entire community by shifting planned new construction from the edge of town to blighted and substandard areas where the removal, improvement or replacement of older buildings, along with improvement to aged government infrastructure, aids the overall outlook of a community.

North Platte has done a couple of proper TIF projects: the original Pro Printing and the new Hobby Lobby are two that come to mind. A project to renovate the Pawnee Hotel would be another proper use of the program.

TIF was never intended to be driven by economic development concerns, but done correctly, TIF can become a catalyst to foster economic growth.

Examining the Community Redevelopment Authority’s (CRA) proposed Pacific Place Apartments TIF, I fail to see how the project would improve the overall economic or infrastructural outlook of the town. Between the time of the 2010 Census and the Census Bureau’s 2018 estimates, North Platte’s population has declined by 919 and Lincoln County as a whole by 1,103. Contrary to the housing study commissioned by the Development Corporation (DEVCO), which estimates a 315 rental unit shortage, the 2010 Census found North Platte had 890 vacant housing units. By 2018, that number is estimated to have grown to 972. To back up the Census numbers, I checked with local rental property managers. The consensus was their vacancy rates are above what is preferred and there is no shortage of availability of free market rental housing for an adequately paid workforce.

I heard comments that North Platte may have a shortage of Federal Section 8 and Nebraska Section 42 low-income housing. Section 42 housing automatically qualifies for large property tax reductions, in some cases over 70% and therefore there is no need for TIF. A shortage of low-income housing is understandable since local economic development assistance efforts have lately emphasized the hotel industry, where the majority of jobs are low-paying. North Platte’s location is a natural magnet for that industry. It does support the sales tax base and the restaurant trade, but a focus on bringing high-paying blue-collar manufacturing and service jobs to the area would do more to eliminate the need for low-income housing. Pacific Place Apartments is not registered as a low-income housing complex; it competes in an already crowded free market rental industry.

Questions that come to mind to be considered by citizens are:

  • What blighted condition will be improved by this project and what city infrastructure improvements are needed in an area where existing infrastructure is less than 25-years-old?
  • What is the intention of TIF: to create a financial benefit for the project owner and those businesses who help the project to be built or should it benefit the community as a whole by improving public infrastructure?
  • Finally, is it a concern that the developer claimed that the ability to avoid North Platte’s high property taxes through TIF, for the next 15 years, is the deciding factor that will make the project profitable?

What am I doing in Lincoln to help Lincoln County grow?

First, I am working with fellow Revenue Committee members to craft LB 289 as an answer to the very issue the Pacific Place developer implied: property taxes in Nebraska have become so burdensome that it is detrimental to the success of business. I am told that, high taxes overall is the number one reason why middle class workers and retirees move away from the North Platte area.

Second, we are attempting to influence the terms in Nebraska’s new economic development program, LB 720, to assure that rural Nebraska is guaranteed an equitable share of the benefit.

It is interesting to watch some local efforts, seemingly done haphazardly, with no concern that those efforts may add to an already high property tax burden or not seeing any acknowledgment of the negative overall effect those high taxes have on economic growth.

Contact Sen. Mike Groene: mgroene@leg.ne.gov or 402-471-2729.

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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