Slot machines on the casino floor at the Seminole Hard Rock Casino in Tampa, Florida. Five Nebraska communities want permission to build casinos, in addition to the state’s six horse-racing tracks. (Octavio Jones/Getty Images)
LINCOLN — State Sen. Mike Flood took aim Tuesday at allowing incoming Nebraska casinos to tap public tax-increment financing as a way to defray development costs.
The Norfolk lawmaker said he wouldn’t object to an already-approved plan for a $220 million casino at Omaha’s Horsemen’s Park. But going forward, he said, using the subsidy to help construction of multimillion-dollar gambling parlors “on the backs of taxpayers is just plain wrong.”
He said that the Omaha WarHorse casino is projected to generate $45 million annually and that such profitable ventures don’t need TIF to work.
“Whatever your views are on gambling,” Flood said, “we should all agree that casinos have no place taking millions of dollars in property tax subsidies for their development.”
Flood spoke during a public hearing on Legislative Bill 713, which he and Sen. Mike Groene of North Platte have sponsored to prevent tax-increment financing for construction related to casinos.
Under the state revitalization tool referred to as TIF, increased property tax revenue from a new development is diverted to cover eligible development costs. After TIF ends (generally in 15 years), the increased tax revenue reverts to funding public school districts and local governments.
In testimony before the Urban Affairs Committee, Flood acknowledged that Nebraska voters approved casino gambling in November 2020. But he said he didn’t think voters or the Legislature intended for casinos to benefit from a subsidy such as TIF.
State Sen. Carol Blood, a member of the committee, asked why it would be appropriate for the Legislature to tell local government officials, who approve or deny TIF projects in their jurisdictions, how to conduct business.
“My concern is local control,” said Blood, of Bellevue, which is one of five communities where new casinos are proposed in addition to the state’s six horse-racing tracks.
That sentiment was echoed by Christy Abraham of the League of Nebraska Municipalities, who said her group supports local discretion. She said TIF is used to help cover costs of public infrastructure and other improvements related to the projects.
Supporters of the Flood-Groene bill included Pat Loontjer of Gambling With the Good Life, who said her organization remained vigilant despite having lost its main 25-year fight against casinos.
“Whatever your views are on gambling, we should all agree that casinos have no place taking millions of dollars in property tax subsidies for their development.”
– State Sen. Mike Flood
Loontjer said she, too, believed that voters viewed casinos as a way to ease their property tax burden and that TIF for casinos would divert property tax revenue to pay for casino development.
The Urban Affairs Committee did not take action on that bill, nor other TIF-related bills and amendments that dominated Tuesday’s two-hour hearing. Indeed, the afternoon session proved to be a TIF-a-palooza of sorts, with other testimony related to the often-controversial economic development tool.
To access TIF, projects must be in designated blighted areas and show they would not occur “but for” the TIF boost.
Among other TIF measures discussed was an amendment by State Sen. Justin Wayne, which he said is designed to sharpen the use of the “extremely blighted” designation that allows TIF to stretch five years longer than the traditional 15 years.
Wayne said his amendment to Legislative Bill 798 is targeted at what he has called abuse by the City of Omaha to use the benefits of the extremely blighted designation for a proposed streetcar system, which would run from downtown to midtown Omaha.
“If that’s considered extremely blighted, North Omaha and South Omaha don’t have a chance,” he said.
Specifically, the Wayne amendment would require cities to adopt policies ensuring that the extended TIF period is used for goals that include affordable housing; flood mitigation; preservation of historic buildings and anti-poverty programs in established neighborhoods.
Jennifer Taylor, an assistant attorney for the City of Omaha, spoke on behalf of the Mayor Jean Stothert administration. She described the streetcar as a 100% public infrastructure project that would promote development of the urban core and surrounding neighborhoods.
Taylor said the streetcar project is projected to bring $3 billion of development to the downtown and midtown area, compared to about a half-billion dollars if it was not built.
“The streetcar will enable the city to open areas for development that would not be available but for the streetcar,” Taylor said.
Also Tuesday, State Sen. Megan Hunt of Omaha spoke in favor of her Legislative Bill 836, which would provide a mechanism for cities to remove a blighted designation if warranted. Currently, no road map exists, she said, to review or remove the designation that allows for TIF.
Specifically, the legislation would require cities to review a blighted label after 30 years, and every five years after that.
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