Study: Growth's positives outweigh drawbacks
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BY RODD CAYTON / Lincoln Journal Star
Growth is good. That's the gist of a study released Tuesday by Eric Thompson, director of the University of Nebraska's Bureau of Business Research.
Thompson did the study for the Lincoln Chamber of Commerce, which wanted to show the public that growth brings benefits to the city, not just costs, said interim Chamber president Wendy Birdsall.
The study determined that the average new housing unit generates more in tax revenue and other income than it costs the city government to put in infrastructure for it.
Thompson said growth has been responsible for additional retail and service activity in Lincoln that has kept the city's shoppers in town and drawn sales from the surrounding area.
The result: Lincoln receives "more than $1.1 million per year more in sales tax than would have otherwise been expected in a community of this size where growth had not occurred," according to the study.
The chamber welcomed that data, particularly in the wake of a special election last September in which voters rejected a $75 million bond issue for streets, sidewalks and trails, said Chamber board chairman Bruce Wright.
"It's a shame this information wasn't available prior to the bond election," he said.
Real wages — pay adjusted for the cost of living — grew by 70 cents an hour in Lincoln between 1990 and 2002, the study found. The mean hourly wage in Lincoln was $15.92 in 2003, according to Bureau of Labor Statistics data cited in the Thompson study.
That's a 14 percent increase in real wages, that is, wages adjusted for the cost of living, Thompson said. Real wages grew by 11.1 percent nationally during the same time period, he said.
Wright said while some reports have suggested that existing neighborhoods are paying for new development, the Thompson study shows that not to be the case.
Neighborhood activist Carol Brown, who opposed the bond issue, took issue with the data outlined in the Thompson study.
"Why are we in such dire straits?" she said. "We have been growing by leaps and bounds the last three years. Why don't we have money to … fix our sidewalks?"
Not all growth is necessary likely to help Lincoln, Thompson said. He especially cautioned against "leapfrog" growth that occurs outside the city limits. When such growth happens, Thompson said, people and jobs are likely drawn out of the city, and take their revenue with them.
In the past, He said, quality growth has kept new revenue coming into the city as new infrastructure needs came up.
Not so with a leapfrog pattern, under which "Lincoln won't get the revenue from growth and it may still have to bear some of the costs of growth, particularly arterial road development," Thompson said.
Lincoln Mayor Coleen Seng was pleased with the findings.
"It's nice to hear that an expanding city really contributes to the local economy," she said. "I think we knew that but (the study) really confirmed it."
Reach Rodd Cayton at 473-7107 or rcayton@journalstar.com.
Real wage comparison
Percent changes in real earnings (pay adjusted for the cost of living) in Lincoln and selected cities, 1990-2002.
Fort Collins-Loveland, Colo. 20.34
Fayetteville, Ark. 17.42
South bend-Mishawaka, Ind. 16.47
Waco, Texas 14.09
Lincoln 14.02
Springfield, Ill. 11.68
Provo, Utah 12.40
Tallahassee, Fla. 10.28
Salem, Ore. 10.33
Lexington-Fayette, Ky. 10.12
Reno, Nev. 9.94
Burlington-South Burlington, Vt. 8.91
Topeka, Kan. 7.79
Charleston, W.V. 6.97
Champaign-Urbana, Ill. 6.80
Eugene-Springfield, Ore. 6.28
Huntsville, Ala. 4.95
Gainesville, Fla. 1.83
Lubbock, Texas 0.77
Source: Bureau of Business Research, University of Nebraska.
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