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Economic Development Sales Tax Renewal

On May 10th, Ord voters will have the opportunity to renew Ord’s Economic Development Program and its associated 1% sales tax. Since 2001, Ord and Valley County have benefited from an active economic development program. Residents now have the opportunity to vote to continue this program, which has allowed Ord to retain and create good paying jobs, businesses, and attract significant capital investment.

BIG PICTURE

Ord currently has a 1% sales tax for economic development, which was approved by Ord voters in 2001. If renewed by Ord voters, it will remain at 1%.

Funds collected will continue to be used for the same purposes as they have for the past 15 years.

The ballot contains two questions: one for the economic development program and one for the 1% sales tax that supports it. Both must be approved by Ord voters in order for the community to continue its economic development efforts. That is why Ord voters are being asked to vote ‘YES’ twice on May 10th to keep the positive momentum going in Ord.

 

BELOW are FAQ’s about the economic development program, its history, and what its renewal means for the future of Ord and Valley County.

 

  1. What have the collected funds been used for?
    • Infrastructure necessary for the location, relocation, or expansion of businesses. Projects include: Shopko Hometown, Cobblestone Inn & Suites, Green Plains Ethanol (formerly US Bio), Mortensen Industrial Site, Nebraska Distillers Products, and Rolling Hills Subdivision.
    • 48 low-interest loans totaling  $3,662,888 to entrepreneurs for business start-ups, transitions, and expansions. These loans leveraged $7,325,776 in projects. Most recipients can be classified as small businesses with 5 or fewer FTE employees. Business sectors include: Healthcare, Skilled Trades, Manufacturing, Hospitality & Tourism, Childcare and Retail.
    • Griess Automotive Ribbon Cutting    3048527484_09ec3531ee_o

 

  1. How long has Ord had an economic development program and how is it funded?
    • In 2001, Ord voters approved the current economic development program and a 1% local option sales tax to fund that program. Since that time, Ord business has increased nearly every year — an average of 14% per year.

 

  1. Do other cities have economic development programs and associated sales taxes?
    • More than 210 Nebraska cities now have a local option sales tax, with the majority utilizing the funding for economic development activities.
    • lb840 communities

 

  1. What is Ord’s current local sales tax rate, and how much will it be if approved by voters?
    • Ord’s sales tax rate is 1.5%. Of that, 1% is for economic development and the remaining 0.5% is being used to pay off the Downtown Revitalization Bond. If approved by Ord voters on May 10th, the rate will remain 1.5%. The Downtown Revitalization Bond is expected to be paid off in 2023, at which point the 0.5% will sunset and no longer be collected.

 

  1. What are the sales tax rates in other towns?
    • Nebraska state regulations allow cities to have up to a 2% sales tax if approved by voters. Whilesome cities have incorporated the 2% maximum, most have the 1.5% level, with some at 1% and a few at 0.5%. Many cities have higher sales tax rates than Ord, including Alma, Chadron, David City, Fairbury, Geneva, LaVista, Minden, Nebraska City, Norfolk, Waterloo, Sidney, and York – which all have a 2.0% sales tax.

 

  1. What types of purchases are subject to sales tax?
    • According to Nebraska regulations, sales taxes are collected for most business purchases, except: grocery, medical and agriculture inputs. Therefore, sales taxes are paid on most retail and restaurant purchases. The state’s 5.5% sales tax, applies to applicable purchases throughout the state.© Angie Svoboda 2009

 

  1. What are some examples of the impact of sales tax on typical purchases?
    • A trip to the local hardware store to purchase supplies for a home project that costs $34 are supper increased by 51 cents with the current sales tax rate of 1.5%, and would not increase from the renewal of the economic development program and its associated 1.0% sales tax. A family at a local restaurant for $22 currently would continue to have a 33-cent sales tax.
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  1. Why is a city sales tax considered less burdensome on local residents than a property tax increase? How does tourism help with sales tax?
    • Visitors to the Ord area contribute a good share of the local sales tax – helping with Ord’s development activities. An increase in property taxes to pay for development would the funding burden solely on Ord residents.

 

  1. How long will the sales tax be in place?
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    • If the voters approve to renew the economic development program and the associated 1% sales tax funding, the program’s term will be 15 years. Therefore, unless voters approve another program term in the future, the program and sales tax will expire at the end of the 15-year term.

 

  1. What does Valley County Economic Development do?
    • VCED_logo
    • Provides business improvement/start-up low interest loans ($3,662,888 in loans thus far towards $7,325,776 of business projects in Valley County).
    • Provides business consultations and planning support.
    • Provides business attraction and promotion.
    • Provides 0% interest façade loans for local businesses.
    • Provides funding for road/utility/infrastructure improvements.
    • Leverages dollars with the Ord Area of Chamber of Commerce in order that the Chamber can operate at a high level.
    • Provides Ord Area/Valley `County tourism promotion development, activities and management.
    • Provides community development project support.
    • Provides city facility planning and housing development support.
    • Provides local non-profit group support.

 

  1. What are Ord voters being asked to do?
    • In order to ensure that development and improvement activities in the Ord area continue, voters are being asked to vote “Yes” twice (for the two ballot propositions) on May 10th for the updated economic development program, and the 1% city sales tax for economic development and city improvements.