LINCOLN, Neb. — City leaders in Curtis will do just about anything to bring new faces to their small western Nebraska town.

Free land to build a house? Done. Golf course membership and swimming pool passes? No problem. Up to $1,000 in cash for families with young children? You got it. Residents were so concerned about the town of 900 stagnating that they started funneling their resources into financial incentives to attract more young families.

Now Nebraska lawmakers want to know if a similar approach might work throughout the state. A legislative committee is scheduled to meet in North Platte on Aug. 24 to hear public comments on the idea, at the request of Sen. Dan Hughes of Venango.

Hughes said he wanted to research so-called relocation incentives out of concern for Sidney, a city with an uncertain future after its largest employer, Cabela’s, was purchased by Bass Pro Shops for $5.5 billion. Hughes said he’d like to know whether Nebraska is competing effectively with other states’ programs to attract skilled workers.

Keeping jobs and people in smaller cities “is a huge concern, especially if you’ve got an industry that is not tied to agriculture,” Hughes said. “Certainly I’m more sympathetic to western Nebraska, where I’m from, but it’s a problem across the state.”

In Curtis, the economic development corporation relies on grants to pay for incentives, Schultz said. The corporation offers down payment assistance and cash awards for families with school-aged children who plan to buy or build a home in town. The city offers land for residents and businesses that inquire about the benefit before moving to the area.

“We figured we at least have to try (to attract more families), even if we go down swinging,” said City Administrator Doug Schultz, who serves on the board of the nonprofit that administers the program.

Schultz said at least 15 to 20 families have received free land in the roughly 15 years since the program was enacted. Although the total numbers are small, he said, the new homes make a noticeable difference in a small town like Curtis. The city pitches itself as a small-town alternative for people working in nearby McCook and North Platte.

Many small communities have expressed interest in incentive programs over the years, but they face challenges when public money is involved, said Lynn Rex, executive director of the League of Nebraska Municipalities. Rex said Nebraska’s constitution imposes restrictions on lending the state’s credit, which prevents governments from giving tax money directly to individuals for a private purpose.

“You can’t just cut a check and say, ‘Come back to Nebraska,'” she said.

One exception is for cities that have adopted so-called LB840 programs, which allow them to use local tax revenue for economic development projects with voter approval. Senators passed a law in 2013 to let cities use that money for relocation incentives. But not all cities have adopted LB840 programs.

Rex said the restriction prevents Nebraska from creating major incentive programs similar to one Kansas launched in 2011.

Kansas offers five years of income tax exemptions for out-of-state residents who move to one of rural 50 counties and up to $15,000 in student loan payments. Participants had to live in their chosen county for at least five years to keep the incentive. The program relies on a combination of state and local funding.

“It’s a heck of a deal,” said Jeff Hofaker, the city administrator in Sutton, Nebraska, who took advantage of the program at his previous economic development job in Phillips County, Kansas. “It was and still is a very good program.”

Hofaker said he’d like to see a similar program adopted in Nebraska.

He said the Kansas program helped attract recent college graduates who hadn’t yet decided whether to return to their hometowns or move to a larger city. Some of the participants started their own businesses. Most came from more populated areas of Kansas or nearby states, Hofaker said.

Hofaker said Nebraska lawmakers should try to find a way to create a similar program or allow cities more flexibility with how they spend local money.

“Nebraska needs to look practically at ways we can broaden the economic tools in our toolbox,” he said.


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