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Targeted job creation incentives bill hits snag

February 4, 2019

Legislation designed to spur creation of high-wage jobs and capital investment in low-income and rural areas in Nebraska triggered a series of challenges Monday about its effectiveness and its costs.

Sen. Brett Lindstrom of Omaha, sponsor of the bill (LB604), told the Legislature’s Business and Labor Committee that he stands ready and willing to consider changes in the proposal, recognizing that there are “things we can work on” to improve the legislation.

“Nebraska has to have incentives to compete” for business investment and job creation, Lindstrom said, but he also is aware of the state’s current revenue squeeze and would be willing to consider implementation at a later date.

In its current form, Lindstrom’s bill would authorize allocation of up to $30 million in annual job creation incentives to the new program, with half of the money raised by private funding.

Benefits would be targeted at businesses with fewer than 150 employees.

Dave Rippe, director of the Nebraska Department of Economic Development, opposed the bill in a letter sent to the committee.

Rippe, whose department would administer the new program, filed a fiscal note in which he said “there is no mechanism for the department to prioritize or select funded entities who plan to invest in companies with high job growth.”

Sen. Steve Lathrop of Omaha questioned whether the bill’s language would really target high-wage jobs with accompanying benefits.

Renee Fry, executive director of Open Sky Policy Institute, expressed concern about the proposal’s impact on the state budget.

Research on current business incentives suggests they are “often excessively costly” without delivering intended benefits, including high-wage, full-time jobs, she said.

Ryan Dressler, senior associate at Advantage Capital in Cleveland, spoke in support of the bill. His firm focuses on investing in underserved rural and urban areas, he said.

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