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Regional Review: The Plains States Enjoying Renewed Economic Health

Boasting low tax rates and aggressive recruitment programs, the Plains States point to major expansion projects as evidence of their economic health over the past year. These expansions, and the economic benefits that accompanied them, included significant foreign investment.

Location USA / April 2013
A Bel Brands employee at work; the company has decided to build a new plant in South Dakota.
A Bel Brands employee at work; the company has decided to build a new plant in South Dakota.
A common theme among Plains states officials in citing economic development success is a business-friendly economic environment. While North Dakota points to the state’s budget surplus and fiscal stability, Kansas officials credit recent tax cuts and targeted recruitment efforts. They say that recent expansion projects are evidence that the state’s economy is on the upswing, and hope a series of new tax and incentive policies will help to accelerate growth even more. Kansas officials predict a recent $1.1 million tax cut will ultimately generate 23,000 new jobs. South Dakota, meanwhile, points to its lack of a personal or corporate income tax as a major asset in its business recruitment efforts.

Attracting Foreign Investment

All of these efforts attracted foreign investment throughout the region. New developments included:

In addition, the state of Nebraska announced the expansion of the Nebraska Innovation Campus, a public/private sustainable research campus that aims to capitalize on research by faculty at the University of Nebraska Lincoln to strengthen the state’s economic growth potential. The expansion includes an $80 million investment four new or renovated buildings. Going forward, the state sees information technology as a strong potential driver of growth and has created a $35 million venture fund for IT companies.

Meanwhile, a variety of corporate expansions in North Dakota have boosted employment without any one project being held up as having made the difference. Among the expanding companies over the past year have been Caterpillar (250 new jobs), Monsanto (20), Phoenix International (60), and Amazon (200).

Microsoft, while not adding new jobs over the past year, has just completed an 185,000-square-foot expansion of operations in North Dakota, and Paul Lucy, director of Economic Development and Finance for the state’s Department of Commerce, says he expects the company will be adding people shortly to fill out that space.

The widespread business expansion, according to Lucy, results from several factors: “Besides the high-level productivity that people get out of North Dakota, it also is the result of a financially stable state that has a significant billion-dollar-plus budget surplus and has reduced taxes both for individuals and corporations to the tune of over $1 billion over the last three legislative sessions, so our companies have confidence while they’re doing their expansions that their tax liabilities are not going to go up.”

Railroads’ Economic Contribution
Additionally, the railroad industry has made a very significant impact on growth in the Plains States. BNSF Railway Company announced plans to invest $202 million on maintenance and rail capacity improvement, including a second-mile line track in the Grand Island, Nebraska, area, and a replacement for BNSF’s bridge over the Missouri River at Plattsmouth, Nebraska, plus an expansion of its locomotive shop and car shop in Lincoln.

At the same time, Union Pacific announced an investment of $1 billion in Nebraska to be expended over the next several years, including an expansion of its North Platte rail yard, new crew change buildings, and a bridge over the Elkhorn River.

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