Report: Money from growth goes lower property tax rate, build parks, libraries

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BY MATT OLBERDING / Lincoln Journal Star

It’s a familiar refrain from land developers and home builders: The city is not devoting enough money to streets in new areas of the city.

And while some people are skeptical of that view, a study by a University of Nebraska-Lincoln economist shows it’s true to a large extent.

In a follow-up to a 2005 study that showed growth in Lincoln pays  for itself through increased tax revenue and local spending, Eric Thompson, who is director of the Bureau of Business Research at UNL, produced data showing where the additional money generated by that growth — what he called the “growth dividend” — goes.

In any given year, according to Thompson’s research, new growth generates  approximately $4 million to $5 million in revenue for the city.

And the city has largely chosen to use that additional revenue to reduce its property tax rate and to fund capital projects such as parks, libraries, storm sewers and fire stations, Thompson said.

But with the exception of streetlights, the money has not gone to street and highway construction.

That doesn’t mean spending on roads hasn’t increased. It has, according to Thompson’s research, which examined a 15-year period from 1990-2005. But most of it has come from state and federal sources or the city’s wheel tax, and much of it has been dedicated to Antelope Valley projects.

Traditionally, property tax dollars have not been used for roads, but Thompson’s study suggests that to maintain the current level of capital spending, the city might have to consider allocating more of the “new growth” money to streets and highways.

That mirrors a proposal by Lincoln Mayor Chris Beutler to divert some of the sales taxes generated in new developments to pay for road construction and help close what is projected to be a $135 million gap for funding street needs in the next dozen years.

Beutler said in a statement Wednesday that he agrees with the report’s conclusion that Lincoln is not adequately investing in its future.

“The ... report reminds us that finding revenue to build roads and infrastructure for future economic growth is imperative,” he said  “That’s why I continue to explore potential new sources of revenue and new efficiencies to make our current road dollars go further.”

Rick Krueger, a local developer, said Thompson’s data “confirms what we all know” about the city’s lack of investment in roads in Lincoln’s new-growth areas.

Krueger said he was grateful for the study and hopes the city and Chamber of Commerce, which sponsored the study, do something meaningful with it.

Reach Matt Olberding at 473-2647 or molberding@journalstar.com.