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Amendment 2 would boost most blighted areas

Amendment 2 would boost most blighted areas

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Justin Wayne speaks at Memorial Park during a rally to remember James Scurlock on Sunday.

Since Nebraska voters first approved its use in 1978, tax-increment financing (TIF) has been a key component of economic development efforts in communities throughout the state — from Omaha to Scottsbluff, from South Sioux City to Falls City. While much of the attention on this year’s ballot initiatives has been on high profile issues like gambling and payday lending, voters will also have a chance to enhance Nebraska’s TIF laws to encourage more development in communities that are among the hardest hit during most economic downturns.

In Omaha, TIF has played a significant role in helping spur major developments, creating vibrant new commercial districts like Aksarben Village, Midtown Crossing, and the Blackstone District. While each of these projects has clearly met the legal requirements for the use of TIF and enjoyed broad support from the Omaha City Council, they stand out not for where they are located, but where they are not located.

Historically, the basic goal of TIF has been to revitalize those portions of our community that have been left behind. What we’ve seen in Omaha is that because developers are able to access TIF in many newer neighborhoods, there’s less incentive for them to explore that same type of development in struggling communities like North and South Omaha. Amendment 2, which appears on the November general election ballot, is designed to incentivize developers to use TIF in those areas that need the most help.

Currently, our state constitution limits TIF financing to a period of 15 years, which is the most restrictive TIF repayment period of any of the 49 states which allow the use of TIF. Because that 15-year limitation applies the same at both 72nd & Dodge and in North Omaha, developers will choose the easier development at 72nd & Dodge every time. To combat this problem, Amendment 2 would allow the Legislature to extend the TIF repayment period from 15 years to 20 years, but only in those areas that have been designated by the city as “extremely blighted.”

Based off existing definitions in state law, extremely blighted areas are those areas of the city in which the average unemployment rate is at least 200% of the statewide average and the average poverty rate exceeds 20%. In addition to a number of census tracts in North and South Omaha, areas that potentially meet these narrow criteria can be found in a handful of communities throughout the state, including Fremont, Grand Island, Lincoln, Scottsbluff and South Sioux City.

As chairman of the Legislature’s Urban Affairs Committee for the past four years, I’m well aware of cases where TIF has been used for projects that some have deemed questionable. While the Legislature has made significant strides in addressing these past abuses of TIF, part of how we can prevent future abuses is to encourage developers to use TIF where it can do the most good. By voting for Amendment 2, Nebraskans have the opportunity to enhance a proven economic development tool and provide a “carrot” to help rebuild Omaha neighborhoods that have been left behind.

Sen. Justin Wayne represents District 13 in the Nebraska Legislature. He is chairman of the Urban Affairs Committee.

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