There has been a lot of talk this Legislative session about business tax “incentives.” You may have heard some of the arguments: “We need them to bring quality jobs.” “We need to say ‘we’re open for business.’” “It’s the only way to help our economy grow.”
But the costs of Nebraska’s business tax “incentive” programs — and what we compromise as a result — is rarely discussed.
Right now, the Legislature is considering LB 720, the ImagiNE Nebraska Act. Here are just some of our concerns with this package:
- LB 720 with proposed AM 2207 would use taxpayer dollars to subsidize manufacturing and aircraft services jobs that pay only $16.69 per hour in Sarpy, Douglas and Lancaster counties and $15.58 per hour everywhere else. This would qualify a family of four for the Supplemental Nutrition Assistance Program (SNAP), free lunches, and Medicaid expansion. Why is the state willing to help CEOs, but not workers and their families? Case in point: TD Ameritrade — who has received tax incentives from the state of Nebraska — paid its CEO $8.6 million in 2018. Meanwhile, they were sold to San Francisco-based Charles Schwab. Call your senator right now and ask them to oppose LB 720.
- When the costs of incentives balloon, as they have with the two previous incentive programs, there is less money for education, health care, state employee salaries and other services that are proven to make our economy strong.
LB 720 is predicted to reduce state revenues by nearly $1 billion through Fiscal Year 2031, according to a legislative fiscal analysis. Past tax incentive programs (Nebraska Advantage Act and LB 775, which was crafted to benefit ConAgra) grossly exceeded their original projected costs to the state and did not deliver the benefits initially promised. Why is the state willing to help CEOs, but not schools and our communities? Call your senator right now and ask them to oppose LB 720.
- Employers aren’t required to pay for any health care benefits. LB 720 does not require businesses receiving “incentive” dollars to pay for benefits for new employees, including health insurance. Why is the state willing to help CEOs, but not a company’s employees? Call your senator right now and ask them to oppose LB 720.
- LB 720 is a business entitlement program that gives away Nebraska’s revenue base, regardless of whether the jobs and investments would have happened in the state. In fact, research shows only 2-25% of the investments in expanding businesses are made because of these “incentive” programs. So, we are subsidizing businesses for things they likely would have done anyway. Further, “incentives” get paid first as an entitlement. The legislature is then left with the rest of the revenue to build the state’s budget. In other words, “incentives” get prioritized over everything else and are paid out first. Why is the state willing to help CEOs, but not protect our state revenue? Call your senator right now and ask them to oppose LB 720.
Let’s be clear – we all want a strong economy with prosperous communities. But the price tag — and the impact on the budget associated with LB 720 — jeopardizes the stability of our state by leaving less money for quality state services, health care, good schools, safe neighborhoods and successful mainstreet businesses. That’s why NAPE has major concerns with the bill.
The bill will be debated soon. Please take a moment to contact your senator to share your concerns about LB 720. Find your senator here.