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Cities could pay people to relocate using sales tax

Wednesday, January 30, 2013

LINCOLN, Nebraska -- Individual communities could create incentives for people to relocate there under a bill presented by Sen. Kate Sullivan of Cedar Rapids to the Urban Affairs Committee Tuesday.

Sullivan's bill (LB295) would change the language of an existing law that allows communities to use local option sales tax revenue for economic growth.

The proposed bill would add language permitting individual communities to use that money to create incentives, such as student loan forgiveness, for people to relocate to those communities.

"It's actually a really simple bill," Sullivan said.

Sullivan said communities often have jobs but they do not have skilled workers to fill those positions.

Caleb Pollard, executive director of the Ord Area Chamber of Commerce and Valley County Economic Development, said his area would fit in that category.

"In Valley County, our single biggest threat to our long term viability is not a lack of business," Pollard said. "It is a lack of people."

This bill would allow communities to decide if and how they want to use money going toward these incentives.

"The city councils and the village boards would have the final say," Sullivan said. "It doesn't cost the state a single cent."

No one testified against the bill, but Sens. Colby Coash of Lincoln and John Murante of Gretna expressed concern that the term "relocation incentives" may be too broad.

Lynn Rex, the executive director of the League of Nebraska Municipalities, said that if the language were more specific, senators would possibly be dealing with proposals for exemptions in the future.

"I think it does need to be broad in its character because every city is different," Rex said. "There is no one size fits all."

She added that councils will want to make specific incentive proposals because they will want citizens' support. The public will not likely vote for an incentive that seems unreasonable, she said.

Mike Feeken, executive director of the St. Paul Development Corporation, agreed with keeping the term broad to meet the individual needs of communities.

Sullivan echoed the idea that cities should have to the authority to decide the nature of the incentives.

"The funding is coming straight from the local control," Sullivan said, "and I think we better give them the flexibility to craft their own program to spend their dollars."

Sen. Amanda McGill of Lincoln suggested revising the proposed bill to find language that could keep it broad while defining a few guidelines that define "relocation incentives."

K. C. Belitz, president of the Columbus Area Chamber of Commerce, also testified in support of LB295 with an example of how such a bill could help Columbus gain more people.

After recruiting in northern Michigan, Belitz found potential workers with the skills needed to fill the jobs in the Columbus area. They hesitated to come, though, because they did not know how they would be able to move, he said.

The Columbus Area Chamber of Commerce helped nearly 30 people move from northern Michigan to Nebraska, but the available resources were not enough to make a significant difference, he said.

The city was not involved in this instance, but with LB295, the city would be able to help relocate people by providing more resources.

"Certainly, we'd love to see communities have this option as another tool," Belitz said.

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