The General Election is less than three weeks away, and one of the items to appear on the ballot for Callaway voters is something we have been talking about for the past few weeks. The LB840 plan and sales tax will appear as two separate items on the ballot, and the Economic Development committee reminds voters that you must mark the “For” box on both for the tax and utilization of the funds to continue as it has for the past eight years.

In 2014, the voters of Callaway elected to institute a 1% local sales tax on top of the state sales tax, with those funds being used for local economic development projects. This additional tax was approved by the Legislature several years ago, and is known as the LB840 program.

“One advantage to LB840 is that local residents do not have to pay the tax if they don’t want to. If they choose to do all of their purchasing outside of Callaway, then they won’t pay it,” explained local businessman Lawrence Paulsen. “And those from outside of our community who purchase items while they are in Callaway will pay the tax, and help contribute to our local projects.”

Over the years, the money that has been collected through the existing program has helped businesses establish or expand, and improved some infrastructure within the community. One business that has utilized the LB840 funds is Callaway Market.

Paulsen purchased the market in October 2015, and Paulsen borrowed $20,000 from the LB840 fund for working capital for opening the business. “I put my loan application in, much like applying for a regular loan at the bank. They want to see your business plan and cash flows also, and we just made an application for a 10-year loan,” Paulsen explained. “You can put in a request for what interest rate you think you can afford to pay. You can have a little less restrictive terms with this loan, and it is just additional funding to help secure a bank loan. The bank looks at it as additional capital rather than borrowed money.”

Paulsen is now seven years into the loan, which is paid monthly like any other loan. Those funds are then regenerated for others to similarly use. “It’s a great program, I think. Everybody contributes whether they live here or not,” said Paulsen. “There aren’t too many towns around that don’t have an LB840 program anymore. It’s keeping our dollars at home. Callaway uses those funds for things like sidewalk improvement too, which is something our town really needs.”

Callaway Economic Development Director Amber Harrison said LB840 funds can be used for housing in a community the size of Callaway, but there are certain requirements for that. The property has to be owned by a business - which can be a construction company or contractor.

The Economic Development committee, which is an arm of the Chamber, shared during a recent meeting that they have some concerns over the way the sales tax issue is worded on the ballot. Though it does not indicate in the verbiage that this is the renewal of an already existing tax, the committee wants to be sure that voters understand that is exactly what it is. The wording may give the implication that it is something new - and it is not.

The second portion of the LB840 issue on the ballot is to either accept or decline the plan for the Village to use those collected tax funds for economic development within the Village. Harrison noted that it is very important when voting yes for renewing the tax to also vote yes for the plan. Anyone with any questions about the LB840 sales tax program is encouraged to direct those to Harrison at the Economic Development Office, or to any member of the committee.

Contact Ellen Mortensen at ellen@syndicatepub.com