Economic incentives for businesses proposed

Small businesses that create additional jobs in Nebraska would be eligible for grants under legislation heard by the Banking, Commerce and Insurance Committee March 10.

Introduced by Ogallala Sen. Ken Schilz, LB395 would create a nine-member Nebraska Enterprise Authority within the state Department of Economic Development, which would award grants to businesses for recruitment, relocation, capital improvement and infrastructure development. Grants would be awarded based on potential economic impact and number of jobs created by the business. Businesses with fewer than 100 employees would be prioritized for the program.

Administering the program is expected to require four staff members and cost $429,000 in fiscal year 2015-16 and $407,000 in FY2016-17.

Schilz said states surrounding Nebraska are more attractive to businesses because they offer companies better financial incentives. Industries will look only at the state a limited number of times, Schilz said, before deciding not to revisit it as a location option.

“This is the kind of funding—the kind of tool in the toolbox—to help Nebraska move forward,” Schilz said. “It is a critical mechanism that tips the balance in favor of the state when the business is in the final selection stage of a decision.”

Tim O’Brien of the Nebraska Economic Development Association testified in support of the bill. He said the fund would better equip Nebraska communities to cater financial development packages to the wide range of potential business needs. Without the flexibility of discretionary funds, he said, the state will continue to lose projects to its neighbors.

“For a lot of projects, we aren’t very competitive,” O’Brien said.

Jeff Heng, division controller for Nucor Steel in Norfolk, also spoke in favor of the bill. Without incentives, manufacturers will not move to Nebraska, he said.

“This state has opportunity to be more aggressive with economic incentives,” Heng said. “To compete nationally, more must be done.”

Dave Rippe, executive director of the Hastings Economic Development Corporation, also testified in support of the bill. He said his community recently lost a project to a neighboring state because millions of dollars in incentives were offered.

“In a community of 25,000 [people], we certainly do not have the means to compete with the entire state of Iowa,” he said.

No one spoke in opposition to the bill and the committee took no immediate action on it.