Economic development lays the foundation for strong towns, but it takes planning and investment. Nebraska’s Local Option Municipal Economic Development Act, LB 840 for short, is a powerful tool to help cities and villages leverage local tax dollars to support impactful economic initiatives in their communities.
What is LB 840? LB 840 is a local option tax that allows municipalities to create local economic development funds from taxes collected within their communities. These funds can be used for recruiting businesses, improving infrastructure, and supporting local enterprises—especially those that may not qualify for state or federal funding.
Locally funded. Voters decide how the funds are sourced and used. LB 840 funds are collected from sales tax, property tax, or tax on municipally owned utilities. A maximum of 2% of local sales tax revenue can be allocated to LB 840 initiatives, with fund use dictated by the approved ballot language.
Locally controlled. LB 840 is an attractive funding option for many communities because it is entirely planned and executed at a local level, placing the power in the hands of voters and their elected representatives. Communities can prioritize the initiatives that will make the biggest impact for them.
How does LB 840 work? Implementing LB 840 is a community-driven process that involves local leadership and public support. Communities need to assess their economic needs, draft a development plan, and engage the public. The plan must then be approved by voters. If approved, an economic development board oversees fund allocation.
Many communities across Nebraska have used LB 840 to spur economic growth. To learn more about LB 840, please reach out to [email protected].
