The Tax Dragon Bit Us

A little more than two years ago, I spoke at a city council meeting about my desire to not have the council adopt a tax increment financing plan for the proposed new subdivision at Prairie Winds on the east end of town.

My argument, which before the economic chaos that enveloped our country and our county, was that using tax increment financing would effectively reduce the number of people paying for current and future obligations, thereby reducing the amount of revenue to the City. My fear then, now realized, was that we would be faced with additional obligations and the loss of that those taxes would create additional burdens on our town.

It turns out that I was correct in my assessment, though not for the particular reasons I thought then.


Sidney's letter to the State Treasurer's office and their subsequent reply seems to indicate that the three million or so missing dollars being complained about by Council has already been used by various economic development projects such as the aforementioned Prairie Winds deal and others.

According to an article in the Sidney Sun-Telegraph on Friday, Nebraska Tax Commissioner Doug Ewald said that the monies being sought by the Council have already been returned in economic development incentives.

“Those projects, many of which are also receiving benefits from state tax incentive programs, have been authorized by the City of Sidney, but reduce the property tax base of not only the city, but also the school, county, and other local governments,” he added.

Ewald's comments directly state what I warned Council about when they were hot to trot over a land deal that has yet to produce a single house. Ewald went further to explain the underlying reason why the City would ultimately fail. If the city were successful in its bid to reclaim the money it says it is owed, then every other taxing authority such as county and school boards would be lining up to get theirs back too.

Councilman Bob VanVleet perhaps said it best when it spoke of state aid.

“It is a typical government thing, when you think you are getting a helping hand from any government program, it usually comes back to bite you,”

Gary Person said that the TIF programs we have implemented have resulted in over 1000 jobs being created. I would challenge him to detail what jobs he is speaking about.

Mike Rowland
Bloggers Note: Klark Byrd of the Local Sun-Telegraph obtained the quotes from his story which were used herein