Date of this Version
While growth has moderated in the last few years, the 1990s were a period of rising employment and population in Lincoln, Nebraska. The city and metropolitan area experienced sustained and steady growth, roughly on par with the expansion of other mid-sized cities throughout the United States. The growth brought changes to the city, which raised questions about what benefits and costs might have resulted from these changes.
This following study by the UNL Bureau of Business Research examines some of the implications of growth for Lincoln, Nebraska. The study examines how growth in the 1990s and early 2000s affected wages and poverty in the city, as well as how growth impacted the level of retail and services activity. The study also considers some of the costs of growth, such as increased commuting times. Fiscal issues such as changes in the tax revenues and in the need for public infrastructure that result from economic and demographic growth are examined.
Overall, the study finds that growth was accompanied by a number of benefits influencing both the standard of living and quality of life. These benefits should be considered in tandem with any costs of growth such as increased congestion and commuting times or any fiscal costs of growth. Some of the main conclusions of the study are:
• Average real earnings per job grew 14.0% in Lincoln from 1990 to 2002 versus 11.1% nationally. Employment growth in Lincoln contributed to this faster growth in real earnings, where real growth refers to growth in constant dollars, i.e., after adjusting for inflation. We estimate that job growth in Lincoln from 1990 to 2002 helped Lincoln metropolitan area workers increase average real wages $0.70 per hour.
• Employment growth also helped reduce poverty in Lincoln. We estimate that between 1,200 and 2,700 fewer persons were in poverty in Lincoln from 1990 to 2002 due to local job growth.
• Population growth increased retail options for Lincoln residents that helped Lincoln retain and attract more consumer spending and sales tax revenue per household. The City of Lincoln receives an estimated $1.1 million more in sales tax revenue each year from additional sales retained in Lincoln or increases in real per capita income.
• Incremental property tax revenues to the City of Lincoln due to the higher value of new housing units are similar to the costs of providing arterial streets, neighborhood parks and trails, and capital for police, fire, and library services to new households. Incremental tax revenues may even be higher once the sales tax revenue generated during new home construction is taken into account. Similar findings might be expected for other taxing jurisdictions that receive funding from property tax revenues (such as Lancaster County or the Lincoln School District), though this study did not specifically examine these jurisdictions.
• There are, however, additional capital costs for providing utility services such as water and wastewater to new households. A portion of these higher costs would be paid by new homeowners through hookup fees and the part of their monthly water and wastewater bill payments that is used to fund capital costs.
• While most growth in the Lincoln metropolitan area occurs in the City of Lincoln, other development patterns are possible. In particular, the Lincoln area could experience a pattern of leapfrog development where growth continues to occur within the metropolitan area but is concentrated outside the City of Lincoln in nearby cities or unincorporated places. Under such leapfrog development, spending requirements for arterial road construction could increase in the City of Lincoln even as the tax base to support that infrastructure does not grow.