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Tuesday, October 18, 2011

Nebraska community revitalized with 1% sales tax

Rural communities that are struggling economically might take a lesson from Valley County, Nebraska, Julie Ardery of The Daily Yonder reports. From 2000 to 2008 the non-agricultural employment in the county increased 46 percent, compared to 7 percent statewide and 6 percent nationally over the same period. The current unemployment rate is 2.9 percent, less than a third of the national average. (Wikipedia map)

The city of Ord, the county seat, dedicated a 1 percent sales tax in 2001 to economic development countywide. Ardery writes that the "impacts have been dramatic" on employment, business, the arts, housing development, health care facilities and architectural preservation. The City of Ord, its Chamber of Commerce, Valley County and the non-profit Greater Loup Valleys Activities created Valley County Economic Development to provide loans from the revenue created by the tax to economic development projects. Director Caleb Pollard told Ardery these loans funded 38 business development projects over eight years, and 105 new businesses have opened since 2000. The additional tax brings in about $400,000 a year with an additional $180,000 coming from loan repayment.

The City of Ord was the first in Nebraska to spend revenues from city taxes countywide, but Pollard is proud of this fact, telling Ardery: "A rising tide raises all ships." The increase in revenue has drawn several Valley County natives back to the area to open businesses and caused "an epic shift in attitude," Pollard said. He told Ardery he's not worried about backlash from the "anti-tax crowd" when the issue is up for reauthorization in 2016 because there are many success stories as well has actual numbers to back up the relevance of the one percent tax. (Read more)

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