OpenSkyLIGHTS: Focus on Nebraska fiscal policy
$4.4 billion
Today is National Tourism Day, and according to the U.S. Travel Association, Nebraska business and leisure travel generated $376 million in 2022, the last year state-level data was made available. Compare that with Kansas, where $673 million was generated, South Dakota at $220 million or the king of tourism, California, which added $10.1 billion to its coffers from state and local tax receipts driven by tourism.
Nebraska may be well positioned to capitalize on a national trend around agritourism, which is expected to grow to a national market generating $15.78 billion by 2030. Agritourism, which may take the form of a humble pumpkin patch trip for families or a grander scale like Tennessee’s posh Blackberry Farm, saw a boom in interest during the pandemic that seems to have staying power, providing unique and immersive experiences outdoors and connecting urban dwellers with local food systems. From winery tours to Worldwide Opportunities on Organic Farms (a.k.a. WWOOFing), where people volunteer manual labor in exchange for lodging for days or months at a time, agritourism may offer an additional revenue stream for agricultural producers looking to diversify as they face market headwinds. Research shows that after an agritourism experience, Americans who live in urban centers were willing to spend 20% more on locally grown produce than prior to their experience, which has the potential to boost direct-to-consumer markets for agricultural producers.
In Nebraska, Senator Tom Brandt has introduced LR 434, an interim study to explore the potential for expanding agritourism in the state.
$658,003
Nebraska State Auditor Mike Foley compelled the City of Auburn to return $658,003 to the public coffers by raising concerns about a recent Tax Increment Financing (TIF) project. Just last week, Foley expressed strong concerns about the rapidly increasing use of TIF to fund development projects across the state.
Foley’s concerns in Auburn centered on the fact that TIF is granted for specific projects, and if funds collected exceed the cost of the project, they cannot be rolled into another project. He shared that at the end of 2023, the Auburn Community Redevelopment Authority held $1,101,893.60 in TIF proceeds, but only a portion of those property tax collections were being used to fund projects within the Auburn Core Redevelopment Plan area. Despite a denial of any wrongdoing, funds were returned where it will be divided among local governments that would have otherwise received the funds through property taxes.
49
Every state except for North Dakota experienced a decline in the fertility rate in the 2010’s, according to a report by Pew Research Center. Fertility rates are typically defined as the number of annual births per 1,000 women aged 15-44.
Although many of this trend’s short-term fiscal effects may offer savings to state budget line items like children’s health care, in the long term, economists are concerned that fewer citizens could lead to major decline in state revenue streams and labor force availability. Ratings agencies that establish credit ratings for states have already cited slow population growth in downgrades.
A drop in fertility could also decrease the cash flow to states via federal funding programs like Title I grants, the Children’s Health Insurance Program and Head Start, which include population counts in their allocation formulas. Some states are already concerned about decreased revenue via property taxes, including Vermont, which has had among the lowest fertility rates in the country for years. They project that smaller families may drive down the assessed value of larger homes, reducing property tax revenue needed to fund essential services like education.
While it seems that fewer births may result in cost savings to local school districts, most operating costs are relatively fixed, and contractions in enrollment are often spread among grade levels and geographic areas. Experts caution any school funding formula that relies too heavily on enrollment numbers alone.
2,438
Monday, September 30 is the final day for Nebraska’s political subdivisions to submit their annual budget to their county offices and the State Auditor. According to their office, 2,438 different municipalities, school districts, counties and other entities will submit their fiscal plans for the upcoming year. All subdivision budgets are publicly available for inspection. We encourage you to familiarize yourself with your local budgets and offer feedback to your locally elected officials.