Don't short-change ethanol

Like it or not, it appears that two economic development packages will win overwhelming approval in the 2005 session of the Nebraska Legislature. That became apparent this week when the two bills -- LB 90 and LB 312 -- received near-unanimous approval following first round debate.

Legislative Bill 90, the so-called rural incentive package, was approved 36-1, while the $50 million per year annual tax incentive bill, LB 312, gained 39-1 approval. In both cases, State Sen. Ernie Chambers cast the only no vote.

Reached by phone this morning in his Lincoln office, State. Sen. Tom Baker said he was "very pleased" with the economic development package. "I especially like the fact that tax credits were extended to businesses creating as few as two jobs and investing $125,000 in expansion," he said.

Sen. Baker had a major hand in the legislation. A bill he introduced, LB 695, was incorporated into LB 312. The senator said his plan, which exempts business and manufacturing equipment from sales tax, will result in an annual saving of $20 million for business and industry after it takes effect Jan. 1, 2006.

Not everyone shares Sen. Baker's enthusiasm for the economic development plans. Among them are Van Korell and Ron Friehe, ethanol advocates who are members of the board of directors of SW Energy Inc., the group which is pursuing the development of an ethanol plant at Perry. "While we're happy with everything we get, it's important to note that this plan won't come close to funding the ethanol incentives," Friehe said.

Friehe fears rural senators got the short end of the stick in negotiations with Omaha interests over economic incentive packages. To show what he means, Friehe pointed to the tax incentive program approved Monday on a 39-1 vote in the legislature. That bill -- of great benefit to larger cities -- will receive $50 million in funding annually, compared to the $3.4 million annually proposed for additional ethanol incentives. "Looked at that way, LB 90 will give rural areas 6 percent of what the larger cities could get," Friehe said.

In response, Baker said the ethanol incentives in LB 90 should meet the state's incentive requirements for this year. This would leave additional incentives for future legislatures to determine.

While the debate goes on, LB 90 and LB 312 are on the path to becoming law. Because job development is such a critical need in all areas -- especially rural regions -- Nebraskans need to explore every aspect of the measures and take advantage of any program that will encourage economic growth. But, as they do so, they must not forget the great value of ethanol development. Because of the state ethanol program, Nebraska has become a leader in the industry, and needs to maintain that position with continued incentives and encouragement from the legislature.