Towns try sales tax to boost growth

Searching for ways to keep their towns competitive, several towns in Southwest Nebraska are turning to sales taxes of 1 percent or less to finance their economic development efforts.

The movement started in Curtis, with approval of a half-cent sales tax, and Beaver City, where a 1 percent sales tax won support. Now, a third Southwest Nebraska community, Cambridge, is going to the polls to decide whether to enact a 1 percent sales tax.

The election in Cambridge will take place in a little more than two weeks -- on Tuesday, Nov. 8. If approved, Cambridge city officials estimate the tax will generate $80,000 in revenue per year. Of that amount, two thirds ( or approximately $53,000) would be devoted to economic development purposes, while the remaining one third (approximately $27,000) would go for water rate relief for Cambridge citizens.

Previously, Cambridge had financed economic development efforts with funds from the city's electrical department. Since those funds are now limited, Mayor Mark Harpst said the council decided to put the sales tax issue on the ballot. "We're letting the voters decide if economic development funding should be continued," he said.

Sales taxes for economic development in western Nebraska are not new. In fact, Gothenburg, located less than an hour north of Cambridge and Curtis, has had a sales tax for economic development since the early 1990s. During that time, the Gothenburg community has achieved a number of successes, including the Baldwin Filter plant, the Frito Lay corn cleaning facility; Hoovistol Trucking; and the Pony Express hydroponic tomato complex, with more than 10 acres under roof.

By approving a sales tax of one percent or less for economic development, the citizens of area towns are not guaranteeing that new businesses and jobs will be created. However, by establishing the development funds, they will be a step ahead of the towns who are missing opportunities because of lack of funding.

First, Beaver City and Curtis approved the economic development tax. Now, Cambridge is deciding. Other towns will follow, in the opinion of Rex Nelson, executive director of the McCook Economic Development Corp. "We need to do anything we can to grow our communities," he said. "It's a matter of survival."