HUMAN RESOURCES Nebraskans recognize the close relationship between the quality of their work and the quality of their lives. PEOPLE Non Agricultural Workforce Nebraska is the heartland. Here, in the center of 2001 Annual Average: 909,000 the United States, you’ll find a rich population of farm families, small-town dwellers, urbanites, 35% white-collar professionals and blue-collar 30% 29% laborers. 25% 23% 20% 17% Nebraskans have a national reputation for a 13% 15% strong work ethic, with high productivity and 10% 7% low rates of absenteeism. 6% 5% 5% 0% POPULATION AND LABOR FORCE According to U.S. Bureau of Census counts, Nebraska’s population was 1,711,263 in 2000, up 8.4 percent from 1990. Job growth helped attract new residents. The state’s non-farm payroll grew 23 percent from 1990 to 2000, compared to 21.7 percent nationally. Nebraska Department of Labor, 2001 Nebraskans live and work in environments ranging from rural to small city to metropolitan PRODUCTIVITY areas. In 2000, the Lincoln metropolitan area Nebraska’s labor force has a tradition of high had an estimated 250,291 persons, while the productivity. When coupled with a positive Omaha metro area had a total population of attitude you have reasons why Nebraskans take 716,998. such pride in their work. An example of this Manufacturing Work Force attitude is the inclusion of a “Right-to-Work” provision in the state constitution. Average 35% 0.33 workers’ compensation rates are among the nation’s lowest. 30% Average Hourly Earnings of Manufacturing Production Workers 25% 20% 14.98 14.94 $15.00 14.66 14.60 15% 14.38 14.39 0.11 $14.50 14.25 0.09 0.09 10% 0.08 0.08 0.06 $14.00 0.05 5% 0.03 0.03 0.02 0.02 $13.50 0.01 13.01 0% 12.93 $13.00 12.37 $12.50 $12.00 Nebr. U.S. Calif. Ga. Ill. Iowa Kans. Minn. Pa. Tex. Avg. U.S. Department of Labor, Beureau of Labor Statistics, 2001 Nebraska Department of Labor, 2001 EDUCATION Nebraska’s high school graduation rates average more than 85 percent – among the highest in the nation. More than 70 percent of these graduates annually take the ACT or SAT college aptitude tests – again, one of the highest percentages in the country – and consistently score well above national averages in every subject. High School Graduate Or More Percent of Population 25 Years COLLEGES AND UNIVERSITIES Old And Over In addition to technical and community colleges, Nebraska has 23 public and private college and 95.0% university campuses offering bachelors and advanced 0.904 0.897 0.908 degrees. Five provide postgraduate programs in science 90.0% 0.881 0.855 0.857 and technical disciplines. Two major medical schools 0.841 85.0% 0.812 0.826 are located in Nebraska, as well as two pharmacy 80.0% 0.792 schools, two schools of dentistry and other related health professional schools. 75.0% 70.0% The University of Nebraska’s strong support for business Nebr. U.S. Calif. Ga. Ill. Iowa Kans. Minn. Pa. Tex. development is exemplified by the expansion of Avg. cooperative agreements with industry, a growing U.S. Bureau of the Census, 2001 technology park in Lincoln, and the Institute for Information Science, Technology and Engineering in TRAINING Omaha. Because of the mechanical adeptness and trainability of Nebraskans, many companies find traditional training periods can be considerably TRAINING PROGRAMS shorter. Some manufacturer’s products can be A comprehensive, on-the-job training program is offered made in Nebraska using fewer man-hours than in and administered by the Department of Economic other locations. These reductions in time and Development for new and expanding Nebraska costs will result in higher productivity and businesses. Nebraska state agencies work together profitability for your company. through a Job Training Liaison, providing a full range of training and recruitment resources for business and industry. The Liaison weaves available programs into In addition, Nebraska’s labor development customized packages meeting specific needs, saving time program teams up the financial and technical and money during start-up, while increasing productivity resources of the Department of Economic and reducing turnover rates. Development, Department of Labor and 14 technical community college campuses across the state to provide custom-designed recruitment Services provided on a company’s behalf may include and training assistance. Businesses may get labor force recruitment, screening and assessment assistance for pre-employment and/or on-the-job programs, and customized training for new and existing training, or other specific tax credits. employees. COMMUNITY COLLEGES NEBRASKA INDUSTRIAL COMPETITIVENESS Nebraska’s statewide community college system ALLIANCE (NICA) is an important key to providing a superior, NICA, a cooperative effort involving service skilled and prepared labor force. Fourteen organizations of government, business and education, is campuses offer comprehensive occupational another important resource for employers. Services curricula and conduct special training programs include a Manufacturing Extension Program (MEP), to meet the needs of industry. These colleges which provides technical assistance to manufacturers also work closely with the Department of across the state. Economic Development to assist with customized training programs. TAXES Nebraska offers an array of money-saving tax advantages and business assistance programs to attract and retain business and industry. Nebraska’s constitution prohibits deficit financing. State and Local Tax Collections Per Capita No state-levied property tax. $3,600 3,489 No tax on intangibles. $3,400 $3,200 “Sales-only” corporate income tax $3,000 2,864 3,020 2,952 apportionment factor. (Corporations $2,800 2,755 2,795 2,802 pay 5.58% on the first $50,000 and $2,600 2,554 2,607 7.81% over $50,000 based on federal $2,400 2,350 taxable income attributable to Nebraska $2,200 operations.) $2,000 Nebr. U.S. Avg. Calif. Ga. Ill. Iowa Kans. Minn. Pa. Tex. No property tax on business inventories. U.S. Bureau of the Census, 2001 Personal property tax depreciation schedules permitting full 100% SALES AND USE TAX depreciation. The present sales and use tax rate is 5.5%, plus an additional 0.5% to 1.5% in 114 municipalities. Performance-based state and local sales tax credits and refunds for qualifying UNEMPLOYMENT COMPENSATION firms. The standard contribution rate for a new Nebraska employer is 3.5% of the first $7,000 of wages paid each No sales tax on electricity, coal, gas, person employed during the year. In 2001, the average and fuel oils when more than half used rate on taxable payroll was 0.7% - one of the lowest in directly in processing or manufacturing. the nation. Estimated Unemployment Compensation Cost Per Insured No sales or use tax on ingredients used Employee in manufacturing or processing of a product destined for ultimate retail use. $300 296 $250 223 220 No sales tax on food, prescription drugs 189 207 and some services. $200 173 $150 128 117 One-time capital gains tax exemption $100 from personal income tax on employee- $50 49 43 owned corporate stock. $0 Nebr. U.S. Avg. Calif. Ga. Ill. Iowa Kans. Minn. Pa. Tex. Sales tax refund on air and water Nebraska Department of Labor, 2001 pollution control equipment. No sales tax on common carriers’ Workers' Compensation Manufacturing Rates (Per $100 of Payroll) vehicles and replacement parts. $6.00 5.02 4.7 $5.00 $4.00 3.43 3.21 3.17 2.83 2.87 2.7 2.58 2.6 $3.00 $2.00 $1.00 $0.00 Nebr. U.S. Avg. Calif. Ga. Ill. Iowa Kans. Minn. Pa. Tex. Actuarial and Technical Solutions, 2001 TRANSPORTATION Nebraska’s convenient and secure location with its fully integrated transportation systems, provides quick, easy access to anywhere in the country. MARKETS RAIL Over 75 million people and several major Nebraska enjoys excellent rail service from some of the metropolitan areas are located within an easy country’s largest railroads. Omaha, headquarters of day’s drive of Nebraska. The state’s balanced Union Pacific, is one of the largest rail centers in the economic base and vast market potential have U.S., and North Platte is home of the nation’s largest provided a profitable home for many Fortune freight classification yard. Passenger service to major 500 companies. communities is provided by Amtrak. AIR SERVICE INLAND WATERWAY More than 80 municipal and commercial airports The Missouri River on Nebraska’s eastern border are located in Nebraska. The state is served by connects the state with ocean traffic from the Gulf of most of the nation’s largest airlines, providing Mexico and the Atlantic Ocean. Barge service is direct access to the regional and international available to all parts of the Federal Waterways System. airports. Omaha’s Eppley Airfield is served by 12 major airlines, in addition to commuters and charters, providing approximately 200 flights daily. In 2000, the Omaha airport had a million more passenger enplanements and deplanements than in 1990. HIGHWAYS Nebraska is only one day by truck from major market centers serving 50 million persons. I-80, the country’s only continuous coast-to-coast interstate highway, runs the entire length of the state. I-29 borders Nebraska on the east and provides excellent north-south access, while I-25 is in close proximity to the state’s western border. Nebraska also has a Priority Commercial System of highways providing a continuous network of routes especially designed for large volumes of commercial vehicles. Important components of the system are multi-lane, divided expressways, providing higher speed connections between larger communities and the interstate highway system. UTILITIES Nebraska’s public power and electric grid system assure reliable service and plentiful supply with industrial rates among the lowest in the nation. ELECTRICITY Nebraska is the only 100% public power state in the union. These public power systems control an efficient and dependable mix of generating systems supplying low cost power for current and projected needs. The majority of Nebraska’s electrical energy is produced by coal-fired power plants. The cost of coal is comparatively low because of the state’s proximity to the largest coal reserves in the nation. Nebraska’s two nuclear power plants provide about a third of the state’s electrical generating capacity. Average Bill For Industrial Electric Service (cents/kw hour) NATURAL GAS The average cost of natural gas in Nebraska for $0.06 0.056 commercial and industrial uses is among the nation’s lowest. Industrial quantities of gas are available on a $0.05 0.045 0.042 0.045 0.046 0.043 0.045 firm or interruptible basis in most Nebraska 0.04 $0.04 0.036 0.039 communities. $0.03 Industrial Gas Rates $0.02 $6.00 $0.01 5.44 $5.50 5.36 $0.00 Nebr U.S. Avg. Calif. Ga. Ill. Iowa Kans. Minn. Pa. Tex. U.S. Department of Energy, 2001 $5.00 4.73 4.75 4.64 4.42 $4.50 4.35 WATER Nebraska’s underground water supply provides a $4.00 3.81 huge resource for industrial, domestic and 3.51 agricultural use. Below the state’s surface is $3.50 3.24 almost 80 percent of the Ogallala Aquifer – 2.4 $3.00 billion acre-feet, or more than six times the Nebr. U.S. Avg. Ca. Ga. Ill. Iowa Kans. Minn. Pa. Tex. amount of water in Lake Erie. Along with over $/MM BTU from Gas Facts 2001 American Gas Association 2001 5,000 miles of flowing streams and numerous natural and manmade lakes, Nebraska has plentiful water resources that can be easily tapped at a multitude of locations. TELECOMMUNICATIONS Nebraska has been the leader in the deregulation of intrastate telecommunications rates and services, shortening the time required for the implementation of cost saving innovations. Nebraska’s telecommunications companies have installed digital switching systems and fiber optic cable throughout the state, ensuring Nebraska has a state-of-the art network meeting the needs of Nebraska firms in the 21st century. Omaha has long been a recognized leader in telecommunications and tele-technology industries serving a global market, with an estimated 20 million calls coming into Omaha daily. U. S. News and World Report recently featured Omaha in a story, “They’d rather be in Omaha: As the heartland goes high-tech, the cornfields are rocking”. INCENTIVES Nebraska has a pro-business tax climate and uses targeted business tax incentives and exemptions to foster economic growth. PERFORMANCE-BASED TAX INCENTIVES II) Companies making wage commitments as well as Tax credits are available to both large and small adding significant new employment and investment in businesses that invest in Nebraska. The credits Nebraska can also qualify for wage benefit credits are earned according to the size of the provided by the Invest Nebraska Act (LB620). The investment and number of jobs created. Small credits may be used against withholding tax liability and businesses can earn credits by investing a can fund programs for employees as well as offset a minimum of $75,000 and creating a minimum of company’s income taxes. two full-time positions during a tax year. Larger businesses can earn credits based on several Businesses qualify for these incentives in the state’s investment and job creation categories, including metropolitan areas by adding at least 500 employees and a minimum investment of $3 million and the $50 million in investment, or 250 employees and $100 creation of 30 jobs. million in investment, and paying the new employees at least 110% of Nebraska’s average wage. The resulting tax allowances can include corporate income tax credits, sales and use tax Outside the metropolitan areas, the qualifying refunds, and certain classes of personal property requirements are $10 million in added investment and 25 tax exemptions. new employees paid an average wage that is at least the state’s average. SUMMARIES I) A non-retail primary employer investing $3 III) For smaller projects, the Employment Expansion million in qualified property and creating 30 new and Investment Growth Act (LB1124, LB270), provides or additional jobs can earn the following $1,500 tax credit per employee and $1,000 tax credit per incentives provided by the Nebraska $75,000 of capital investment if two new jobs are created Employment and Investment Growth Act and a capital investment of at least $75,000 is made. (LB775): These credits can be applied to a state sales tax refund or 1. A refund of sales and use taxes paid for up to 50% of a business’ annual income tax liability over purchases of depreciable property used a 5-year period. in connection with a qualified project. IV) Other projects adding investment and employment 2. A 5% tax credit on compensation paid and paying above-average wages in one of the state’s to the company’s new employees. rural counties may qualify for incentives under the Rural Economic Opportunities Act (REO). The investment 3. A 10% tax credit on the investment and employment requirements vary from county to made in depreciable property related to county, and are lowest for counties with the smallest the project. labor forces. A business investing $20 million in qualified The new employees should be paid an average wage at property is entitled to sales and use tax refunds. least 25% more than the county’s average wage or equal to the multi-county regional wage. Qualifying projects If a business invests $10 million in qualified earn income tax credits equal to 5% of the total property and hires at least 100 new employees, it compensation paid to new employees in each of seven is entitled to additional incentives of personal consecutive years, plus 10% of the new investment made property tax exemptions for a 15-year period for for up to 10 years. turbine-powered aircraft, mainframe computers and peripherals, and agricultural products’ processing equipment acquired for use in connection with the project. Credits may be used to reduce Nebraska corporate income tax, or obtain a refund of sales taxes paid on purchases for use at the project. Businesses are eligible to earn credits for a 7- year period, and accumulated credits may be used during a 15-year period. FINANCING Nebraska provides financing services through conventional commercial channels, federally sponsored programs, and state supported programs. A portion of Nebraska's Community Development Block Grant (CDBG) funds have been dedicated to economic development projects. The Nebraska Investment Finance Authority (NIFA) provides low interest financing for eligible industrial projects. Community and regional industrial development corporations organized throughout the state have funds available to assist in financing small- to medium-sized projects, or to partially defray the expenses attendant to larger industrial developments. Programs and services available to businesses in 4. LOCAL OPTION MUNICIPAL Nebraska include: ECONOMIC DEVELOPMENT ACT (LB840) 1. INDUSTRIAL REVENUE BONDS This statute provides the ability for communities All Nebraska counties and municipalities, as to add a sales or property tax for economic well as the Nebraska Investment Finance development projects. Authority (NIFA), are authorized to finance land, buildings and equipment for industrial 5. Nebraska Redevelopment Act (LB830) is a projects. The rates of interest on the bonds are source of funding improvements. normally lower than on most loans and can provide financing of up to $10 million. 6. U.S. Small Business Administration (SBA) is a source of low-interest financing. The Nebraska Development Finance Service (NDFS) also provides assistance in assembling 7. Rural Economic and Community Development financing. (RECD) provides low interest financing. The Nebraska Energy Office can provide low 8. Economic Development Administration (EDA) interest loans for energy efficiency improvements. provides funds for low interest financing. 2. COMMUNITY DEVELOPMENT BLOCK 9. Small Business Innovation Research Program GRANTS (CDBG) (SBIR) is a source of research and development The CDBG program applies to all Nebraska funds. communities and must support job-creating activities for low- and moderate-income 10. NEBRASKA ENTERPRISE ZONES residents. Funds are awarded to local Within Nebraska’s Enterprise Zones, special tax governments to finance programs that credits are given for qualifying businesses that accomplish these goals. increase employment and make investments in the area. The Economic Development Loan Program (CDBG) Funds is a source of funds for financing and job training. 3. COMMUNITY IMPROVEMENT FINANCING Community Improvement Financing is Nebraska’s version of Tax Increment Financing (TIF). This is a method of financing public improvements associated with a private development project in a redevelopment area by using the projected increase in the property tax revenue that will result from the private development.