Nebraska's Future Bright with Bold, Frugal Leadership

Senator Bill Avery
Senator Bill Avery

Nebraska's economic future can be positive, but it hinges on frugal, yet bold leadership on both the state and local levels, according to State Senator Bill Avery of Lincoln's District 28. And that means putting investments in the right places.

Avery, a Professor of Political Science at the University of Nebraska-Lincoln for more than 30 years, retired when he was elected to Nebraska's Unicameral in 2006.

Nebraska will have to overcome some obstacles to achieve that bright future, he said. Nebraska is known for having high property taxes because of its small tax base; the state has a declining work force, which is thought to be one of the state's most pressing problems; the smallest communities are struggling to survive; and demographic changes will continue to impact communities of all sizes.

On the other hand, Nebraska has many good things happening. "The economic future for this state will continue to be pretty good as long as the agricultural economy stays strong," he said. There are many spinoff industries that have developed from agriculture and are competing in the global economy. "And if we get to where I think we will with cellulosic ethanol production, some of the pressure on corn can be relieved, and that will be good in the future, too," he said.

Avery believes Omaha and Lincoln will both be strong in the future - Omaha with its wealth, its information technology infrastructure and Offutt Air Force base, where United States Strategic Command has its headquarters; Lincoln with the flagship campus of the University of Nebraska and its planned Innovation Campus, the city's proposed arena and the Antelope Valley development project.

"In many ways, Lincoln is poised for a tremendous economic takeoff," he said. The arena in the west Haymarket district would attract a certain demographic, as will the University of Nebraska-Lincoln's research campus. Nebraska's Unicameral voted in the spring of 2008 to move the State Fair to Grand Island in 2010 so the research campus can be built on the fair's current site.

Innovation Campus
"I think the research campus at the university is going to be a tremendous engine for new growth and an incubator for new knowledge," he said. It will also attract a large number of well-educated people to lucrative jobs, which will impact every segment of the economy.

Although there was controversy about moving the Nebraska State Fair to accommodate the research campus, Avery said the state senators representing Lincoln got together and agreed that the research campus was the group's number one priority, even though they hoped the fair could remain in Lincoln at a different location. When it came time for the Unicameral membership to vote, it passed easily. "It is a tremendous investment in the future. That's the future for Nebraska. That's the future for the university," Avery said.

There are interesting research studies on how communities attract and keep young workers, he said. "Things like tolerance toward diversity, especially tolerance toward sexual preference diversity, not just ethnic diversity," he said. Additionally, the availability of museums, art galleries and other forms of entertainment - more than just movies and sporting events - are attractive to young workers.

"The proposed arena will appeal to some people, but not necessarily to people who are thinkers and who deal with new knowledge - concept workers. That's not to say they can't be football fans or basketball fans; it's just that they're more likely to go to the art gallery or to the Lied Center (for Performing Arts)," Avery explained.

"I think the research campus at the university is going to be a tremendous engine for new growth and an incubator for new knowledge.

Avery sponsored LB 912, which was passed by the Unicameral in early 2008. The bill is expected to provide about $700,000 per year in state sales tax revenues for the proposed arena project.

The arena would be built just west of downtown Lincoln, and would replace the city's existing Pershing Auditorium. Pershing was built in 1956 and has a capacity of 7,500; the proposed arena would seat approximately twice that number and would include the new technology and infrastructure that many events require.

Antelope Valley Project
The Antelope Valley project combines flood control, transportation and community revitalization for Lincoln's historical core, and is a partnership between the Lower Platte South Natural Resources District, the City of Lincoln and the University of Nebraska-Lincoln.

"Lincoln has taken some risk, and a hugely expensive one," Avery said. "And it's not just flood control - it's urban re-development. And it's going to be tremendous," he said.

Besides preventing floods by carrying heavy rain runoff to Salt Creek, the project is changing the landscape of some of Lincoln's oldest neighborhoods and developing new roadways, parks, bike trails and shopping and entertainment venues.

Nebraska has to be smart in planning for its future, and that may involve a collaboration of people from many perspectives.

Nebraska's legislature has already passed legislation to recruit and retain businesses to Nebraska, and is crafting additional bills to work with economic development issues.

However, one of Nebraska's largest issues is the declining work force, particularly skilled workers, Avery said. "It doesn't matter what you do with the Super Advantage Act or the Nebraska Advantage Act - tax breaks, whatever - if you don't have the workers, they're not going to build that plant, and that's one of our problems," he said.

He has twice proposed a bill to get a scholarship fund set up to train students in Nebraska in areas of high need. The bill would provide students scholarships in needed careers; the recipients would return to Nebraska communities to work for a period of years as payback for the scholarships. "It keeps people here, it helps us to build," Avery said.

"There's a lot of misinformation (about taxes) because we have groups that cherry-pick their information and like to put Nebraska in the worst possible light," he said.

In comparison with the rest of the country, "we're not particularly high in state income taxes; we're about in the middle on sales taxes. Where we're high is on property taxes," he said. Nebraska's higher property taxes are because Nebraska's small population doesn't provide a broad tax base. Much of the property tax is determined by local governments and jurisdictions, counties and cities. The state can give rebates, which it has done, and could enact other measures, but in the end, it's really a local issue, he said.

Comparing the tax structure of Nebraska with tax structures of other states can be misleading, he said. For example, Wyoming has a small population and low taxes, but it imposes a severance tax on extractors of natural resources if the resources are to be consumed in other states, such as petroleum, coal and natural gas. Nebraska does not have those resources, so is unable to access that revenue. "This makes it possible for (Wyoming) to pay their teachers more than we pay ours without having to hit the taxpayers very hard," he said.

Avery is pursuing tax relief for residential homeowners; he is especially concerned about the impact of property taxes on people with fixed incomes, especially considering the uncertain economy.

Military Economy
The military economy in Nebraska amounts to $2.5 billion, Avery said. Nebraska has 27 military facilities, which surprises many, he added. Offutt Air Force Base, headquarters of U.S. Strategic Command, accounts for $2.2 billion of that total; the National Guard facilities throughout the state account for the other $300 million, Avery said.

The state senators pay close attention to those facilities to be sure they adhere to all federal regulations; if they don't, there's a chance the government will close a facility, taking a segment of Nebraska's economy with it.

Rural vs. Urban
Nebraska's small towns struggle to survive, but small towns continue to matter to the people who live there - even though they may not make a significant impact on the state's economy.

"If you start closing down factories like the one in DeWitt, where the inventor of theVise-Grip™ built his first shop - that really matters to the people in DeWitt, but does it matter to the rest of the county, to the rest of the state? In the long run, it probably does not have a huge impact," Avery said.

On the other hand, Omaha is going to be the economic driver. "Nebraska will get some of that action, but probably not as much, because Omaha has an infrastructure - particularly an IT infrastructure - that is very impressive and is integrated with StratCom, which is also a big asset," he said. "And they have money. Omaha is a wealthy city, and they have people who are willing to invest their money in public projects. And Lincoln can't compete with that."

Avery said Nebraska's future is going to be more and more people wanting to live in Lincoln and Omaha, and it will be a struggle just to keep those communities around.

However, as long as there are meatpacking plants in small communities, then those places will be fine. But if you take away the main employers, he said, there's nothing left.