Incentives for employers exceed Mayor Jean Stothert's budget by $4 million, even before the year is over

Omaha's sales tax refunds to employers expanding or creating jobs in Nebraska have ballooned in 2019.City Hall called the increase "significant and unexpected" in a news release about the second quarter financial report.The budget predicted $8.5 million in refund payments for the whole year based on trends since 2009.The city has paid $12.6 million in the first eight months, leaving Mayor Jean Stothert with a $4.1 million overage before the year is even finished."This incentive program is an economic development tool that has been successful for business growth in the state, but it comes at a cost," Stothert said in a statement. "When refunds are high, we benefit from new investment and new jobs in Omaha, but we also lose revenue that we count on to provide services to our citizens."City Hall points to legislation at the state capital that could help it better budget for sales tax refunds. The bill went nowhere.Another measure would require the state to provide notice to the city of companies planning to apply for refunds in the next calendar year. That's contained in the Nebraska Imagine Act (LB720). Lawmakers should debate it next session.Along with the higher refunds, city financial leaders have also projected sales tax collections to fall $2.4 million. Total revenue to date is under budget by $4 million, according to the news release.

Omaha's sales tax refunds to employers expanding or creating jobs in Nebraska have ballooned in 2019.

City Hall called the increase "significant and unexpected" in a news release about the second quarter financial report.


The budget predicted $8.5 million in refund payments for the whole year based on trends since 2009.

The city has paid $12.6 million in the first eight months, leaving Mayor Jean Stothert with a $4.1 million overage before the year is even finished.

"This incentive program is an economic development tool that has been successful for business growth in the state, but it comes at a cost," Stothert said in a statement. "When refunds are high, we benefit from new investment and new jobs in Omaha, but we also lose revenue that we count on to provide services to our citizens."

City Hall points to legislation at the state capital that could help it better budget for sales tax refunds. The bill went nowhere.

Another measure would require the state to provide notice to the city of companies planning to apply for refunds in the next calendar year. That's contained in the Nebraska Imagine Act (LB720). Lawmakers should debate it next session.

Along with the higher refunds, city financial leaders have also projected sales tax collections to fall $2.4 million. Total revenue to date is under budget by $4 million, according to the news release.