LINCOLN, Neb. (AP) — Businesses tapping the Nebraska's tax break program designed to create jobs could invest more than $4 billion over the next several years and create about 10,400 jobs.
The figures touted Monday by Gov. Dave Heineman represent the cumulative investment and job growth plans of businesses that have filed 116 applications for tax breaks through the end of July.
The program so far has been more popular — and potentially more expensive — than officials predicted. They had estimated that once fully operational in 2014, the tax break bill would provide an estimated $200 million a year in breaks to qualifying companies.
The actual cost of providing the breaks under the new system could be more than double that.
The total value of the tax breaks for the businesses that have applied through the end of last month could hover around $600 million. And the total payout from the state could exceed $500 million for applications from last year alone.
The breaks are available under a package of business incentives approved two years ago by the Legislature. Lawmakers attempted to retool the old package to be more competitive with other states.
While the new package costs more, it also contains provisions critics of breaks wanted. How much companies receive will be disclosed and businesses are encouraged to pay higher wages. The more they pay in average salaries, the more tax credits they get.
Heineman said the beefed-up incentive program has provided a job growth edge that complements other aspects of the state attractive to businesses, and he stressed the wide geographic distribution of businesses looking to grow using the breaks. Tax breaks are available to businesses in a tiered system in which the amount of the breaks is tied to job growth and investment levels.
Fifty-five of the 116 projects were planned for the Omaha metro area; 18 in or around Lincoln and 43 in other parts of the state. The financial services sector plans to create the most jobs — more than 3,600.
The sector with the most planned projects is manufacturing and processing. Those companies submitted 51 applications for tax breaks with the goal of investing about $364 million and creating 2,500 jobs.