Of the issues and candidates on the ballot in this election – legalized gambling, payday lending rates, city council seats, mayoral and school board races – none are more visible than the renewal of North Platte’s Quality Growth Fund.
The Chamber of Commerce and the Development Corporation are going all-out with advertising to encourage voters to support the fund.
The quality growth fund grows from a small slice of city sales taxes. It does not come from income or property taxes.
The money serves as an incentive to attract new business, and/or encourage existing businesses to expand. Without it, North Platte may not withstand the economic slowdown that we currently face, Chamber CEO Gary Person said.
The quality growth fund program began in North Platte in 2003. By state law, it must be authorized by voters every 10 years.
“This is a very critical vote for North Platte’s future,” Person said. “People need to look at it that way.”
Person said it is disheartening to hear talk that the town is dying.
“They are talking about their own town that way,” he said. “The town is only going to be as good as we make it.”
North Platte is one of 74 Nebraska communities that have a quality growth fund. Without it, North Platte would be at a disadvantage to other places when it comes to attracting new businesses.
“Every community in the state can say that it is a great place to live and do business, that it has great schools and offers a great lifestyle,” Person said. “What differentiates communities is the amount of incentives and their available industrial parks. When a community has industrial parks, and money to put into extending streets, sewer and water, then it really has something to offer.”
Person said he had three conversations on Monday, Sept. 21 with prospective companies interested in North Platte, and they all asked about quality growth fund incentives.
“That’s what they asked,” he said.
“One of first things that Nebraska businesses who are looking to expand want to know is — what is your LB 840 plan?” Person said, referring to the legislative bill that authorized cities to collect quality growth funds.
“Some people hate the word ‘incentives,’” he said. “However, if it were not for the Homestead Act, the Kincaid Act and the Trans-Continental Railroad Act – some of the most important incentives in history — there might not be much here at all. But thanks to those incentives, families came, put down roots and stayed.”
Person said North Platte needs to be as competitive as possible when it comes to growth because of its location.
“The further west you are, the harder it is to convince entities to locate here. A lot of that is because the population is sparser. Employers perceive there will be a limited workforce, that building materials will be harder to come by, that there will be more shipping costs,” he said.
Also, he said areas to the west don’t have as much exposure to the eastern power brokers in business development, so “we strive to outwork them, and incentives are a big part of what we have to offer.”
Where it comes from
Currently, North Platte’s Quality Growth Fund is growing by more than about a half-million dollars each year, shaved from the high end of the city’s sales tax collections. But there is no assurance that the money will always be there.
First and foremost, city sales tax money goes to support city services such as streets and police, and to make sure those essential services are funding, only a small portion goes into quality growth fund — only after the sales taxes collected increase by 2% from the year before. If sales taxes don’t increase, the incentive fund stops growing.
It is the only growth fund with that mechanism it in the state. If the economy is growing, North Platte’ Quality Growth Fund is going to get funded, Person said.
Surprising sales tax increase
North Platte’s sales tax revenue has grown each year since the fund was established in 2003 — even this year, despite the economic slowdown from COVID-19 and retail shops that have closed.
June and July were the highest sales tax revenue months in the history of North Platte.
Person points to several possible reasons for the unanticipated revenue. He said people traveled less, thus spending less money elsewhere. And, interest rates are low, making it a good time to buy vehicles. People also did home repair projects, taking advantage of the time on their hands. And, online merchants had to collect sales taxes and send the money back to Nebraska communities.
Over the years, the quality growth fund has helped businesses big and small with low interest loans and grants. Funds have been used to help big businesses such as Hobby Lobby and Love’s Travel Center, and smaller businesses such as Wild Bill’s, and smaller businesses such as a communications supply store in North Platte and spinner bait manufacturing company in Sutherland.
The fund can sometimes provide an extra bit of financing to enable a business to expand, Person said.
Again, he notes that 10% of the money in the quality growth fund must be spent to help small businesses.
The fund has been used to give builders a shot in the arm to build homes in North Platte. The first phase of the shot in the arm was to spur construction of 48 single family homes. They are all sold, Person said.
In the second phase, 150 housing units are either built or under construction at the present time. Three-quarters of them are sold, he said.
The housing construction has benefitted 83 business who provide supplies or do the construction work, he said, so the benefits are spread throughout the community.
Person said communities must have housing activity to attract growth, providing space for new employees to move to town. However, housing renovations are as important as new homes.
He foresees a phase three of the shot in the arm program, incentivizing renovations to existing homes, perhaps with through the use of Sen. Mike Groene’s “mini-TIF” program.
The growth fund can be used for job creation, gap financing, infrastructure, Person said. There is more flexibility now than when the program started nearly 20 years ago.
“In a small community, it might be used to keep a grocery store open, or to open a rec center,” he said. “In a larger community, it’s apt to be used to attract new businesses.”
“We want to be as competitive as possible,” Person said.