Ord, Nebraska, and the 1% Miracle

A county in rural Nebraska quit waiting for state and federal help and passed a local sales tax to help itself, shoring up old businesses, starting new ones, and improving local institutions. From hot rods to high tech to housing, Valley County is on a roll.

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With job creation the Holy Grail of today’s public policy, crusaders for employment should set their sights on Valley County, Nebraska. Between 2000 and 2008, according to the U.S. Census, non-farm employment in this rural county rose a staggering 42%. (During the same time period, non-farm employment increased just 7% across Nebraska and 6% nationwide).

Caleb Pollard, director of Valley County Economic Development, reports that the current unemployment rate in Valley County is 2.9%, less than a third the national average. What happened?

“We weren’t going to stand for decline any longer,” writes Pollard. In 2001 the city of Ord, the county seat, voted in a 1% sales tax to be used for economic development projects countywide. The impacts have been dramatic, not just for local employment and business but for the arts, for housing development, for health care facilities, and for architectural preservation, too. And maybe more far reaching than all these successes, Pollard describes “an epic shift in attitude.”

There’s a housing shortage in Ord, Nebraska. With $900,000 leveraged
from its 1% sales tax, the city helped pay infrastructure and
engineering fees for a mixed-use, mixed-income housing development.
Local, county, state and federal officials joined Valley County Economic
Development staff to break ground in October 2010.

Having experienced outmigration and business closures for 90 years, the same withering away that’s taking place in many rural communities, people in Valley County decided that, in Pollard’s words, “drastic measures” were necessary.

The City of Ord (pop. 2100), its Chamber of Commerce, Valley County, and the non-profit Greater Loup Valleys Activities, Inc. created Valley County Economic Development in 2000 through an “interlocal agreement.” But agreements alone don’t create jobs.

Valley County Economic Development made its first sales tax loan in 2003: $40,000 to Valley Rods. The loan created three local jobs and brought three young men back to Ord — from left, Trent Proskocil, Robert Goldfish and Branden Proskocil.

A year later, the City of Ord voted in the 1% sales tax increase “by a wide margin,” writes Pollard. All proceeds have gone toward local economic development projects: expanding existing businesses, starting new businesses, developing sites, even building new housing.

“We made our first loan in 2003 and have been on a roll ever since,” Pollard reports. Over eight years Valley County Economic Development has capitalized over $4.4 million in investment and funded 38 business development projects “to the tune of $2.2 million,” Pollard writes.

The ambitious development effort has created waves. Since 2000, more than 105 new businesses have opened in Valley County. Pollard also points to “over $125 million in public-private investment (notable large investments include an ethanol distillery, new $23 million hospital, new $9.8 million high school, $1.3 million fire hall and a downtown revitalization project).”

Ord’s additional 1% tax on city sales has brought in an average of $400,000 per year in receipts; Pollard explains that “resuse, or loan repayment, adds an additional $180,000/year to the fund to give us approximately $580,000/year to work with.”

Skye and Doug Griess (center) were able to buy Paider Riverside Automotive with a $75,000 loan from Valley County Economic Development’s sales tax fund. They renovated an old facility and instigated others improvements in the central business district of downtown Arcadia, NE, pop. 350. Skye is a native of Arcadia.

And all those revenues have not been spent in the city of Ord alone. Pollard is proud to report that the economic development fund has supported projects in all four of Valley County’s towns. “We were the first Nebraska community to collect sales tax funds in the city proper for use in the county as a whole,” he says. “A rising tide raises all ships.”

Valley County Economic Development helped Brian and Kelly Magiera get a $106,000 community development block grant renovate a local theater for films, plays, and comedy performances.

With the current anti-tax fever running high, is Pollard concerned that local voters will rescind Ord’s 1% for economic development? Not at all.  “The program is set to sunset in 2016,” he explains. Then the issue will go back for reauthorization. “We can point to hard capital investments (which everyone loves) as evidence of success,” says Pollard. He knows there’s work ahead for any tax measure, even one with as many visible benefits as Ord’s sales tax has produced, but feels confident.

“We’re not afraid of the anti-tax crowd,” Pollard writes. “We’ve completed over $33 million in public bond levies in three years for a new hospital, high school improvements and a new fire hall. We’re used to fighting, and winning, this conversation.”


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