Nebraska’s current business incentives law expires at the end of this year, and it’s imperative that the Legislature keep the state competitive by approving new incentives legislation during the current session. Putting a successor policy in place will give needed certainty to companies now considering Nebraska for possible investment.
Lawmakers have a sound proposal, Legislative Bill 720, that deserves passage. The legislation, by State Sen. Mark Kolterman of Seward, features strong concepts that are an improvement over the current Nebraska Advantage Act. For example:
» It incentivizes projects offering higher- wage jobs. The bill also sensibly recognizes regional wage differences across Nebraska. As the Blueprint Nebraska initiative has explained, it’s important for Nebraska to bolster its long-term economic prospects by generating more higher-paying jobs in high-productivity industries. LB 720 helps the state pursue that important goal.
» It shortens the payout timeline and requires annual reporting. These changes would reduce the chances of big fluctuations in year-to-year tax-credit obligations and better help state and local governments anticipate tax-credit obligations in their budgets.
» It simplifies procedures and shifts incentive management from the Revenue Department to the Economic Development Department, easing bureaucratic complications.
On Thursday, the Legislature’s Revenue Committee will hold a hearing on an amendment Kolterman is sponsoring for LB 720. Under the amendment, the state will provide incentives to reduce possible job losses if a Nebraska company is purchased by an outside corporation.
The amendment also includes a section setting out incentives to bolster development of biotechnology and bioproducts companies in Nebraska — an economic sector of importance to both urban and rural communities.
Incentives have proven a significant net benefit to Nebraska: From 2000 to 2017, the state provided $415 million in incentives, and new business activity from the investment generated $516 million in new tax revenue and 50,500 jobs. This job creation was spread to communities across the state. Just few examples: Scottsbluff, Alliance, McCook, Neligh, Holdrege, Beatrice and Nebraska City.
In Omaha, projects using such incentives have brought 40,000 jobs and $10.2 billion in capital investment since 2004.
Without an incentives policy, Nebraska would be automatically cut from consideration by companies for specific projects.
The Legislature can strengthen Nebraska’s competitiveness for the long term, with benefits throughout the state, by approving this much-needed new incentives policy.