A conversation with. Governor Dave Heineman and Richard Baier, Director of Economic Development
"We are most proud that we have tried to target a variety of industries to reflect the diversity of our agricultural sector, as well as our more urban areas as centers for the financial and insurance sectors. We are using our common sense to take advantage of our strengths."
A. Heineman: In May, we passed LB 376, the largest tax relief package in the history of the state, reflecting reductions in income, sales and property taxes. The package is half property tax relief and half a repeal of the estate tax; elimination of the marriage penalty; and a complete repeal of the sales tax on construction labor for residential and commercial properties. We also passed a fiscally responsible budget. Our spending growth rate was 4.5 percent, 33 percent less than the historic state spending growth over the past 20 years.
Q. What are Nebraska's growth industries?
A. Heineman: We are most proud that we have tried to target a variety of industries to reflect the diversity of our agricultural sector, as well as our more urban areas as centers for the financial and insurance sectors. We are using our common sense to take advantage of our strengths. Our target growth industries include financial and insurance services; value-added agriculture; renewable energy, particularly ethanol; biosciences; defense; and transportation/distribution/logistics.
Baier: Besides our new legislation, the Nebraska Advantage Package of 2005 helps us to support growth in those industries.
Q. Are any of these industries particularly active?
A. Heineman: We have seen significant expansion in the renewable fuels sector. By the end of the year, we will surpass the state of Illinois to become the second-largest producer of ethanol in the United States. We will add at least an ethanol plant a month for the next eight months. We plan to have 25 ethanol plants by early 2008.
Baier: We have also seen spinoff industries as a result of ethanol growth. Cargill in Blair runs a major bio-refinery producing corn sweeteners, polylactic acid, and food additives. They already have five joint venture partners there.
Q. Have any companies been a boost to employment?
A. Heineman: In the insurance and financial sector, we have one of the lowest insurance tax rates in the country. Pacific Life and AFLAC have redomesticated in the Omaha area. PayPal, which opened in Nebraska in 2003 with 500 employees, added another building and are up to 2,200 employees. Because of the Nebraska Advantage program, in the next two years they expect to have over 3,000 employees, making them one of the top 10 employers in our state. Their average work force is under 35 years old; companies such as this keep young people from leaving our state.
Baier: In the rural sector, Your Selling Team, originally a part of Technologent, added about 100 technology marketing and service jobs in Chadron, a rural community. This company provides sales lead generation, inside sales, service and maintenance agreement renewals and other services to technology companies such as Sun Microsystems and NCR.
Q. Are you interested in foreign direct investment and exports?
A. Heineman: I am the only governor who has been to Cuba three times. Because of this, I signed two trade agreements executed for more than $60 million of agricultural products, from dry edible beans to beef. We respect each other and work within the trade embargo rules. During the first two weeks in September, I will make a foreign-trade mission to China, Japan, Hong Kong, and Taiwan. I want to help our businesses open doors and compete in the world marketplace. When we opened a trade office in Japan, we chose Koji Nagasaka, a respected Japanese business leader, to head the office. We need a permanent presence for Nebraska companies in Japan. We have 30 Japanese companies operating in Nebraska. Relationship building is important in the Far East. I also plan to visit two of our big trade partners, Canada and Mexico, in the next 12 months.
Baier: The University of Nebraska Medical Center and entities in China are involved in joint testing of new cancer treatments. The University of Nebraska Food Processing Center's goal is to advance exports in the value-added food manufacturing industry through ongoing market support. With their added research, we could become the supermarket for the world.