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LINCOLN -- Goodwill Industries could use it to save on interest payments and put more people to work.
The AllPlay Foundation could have used it to help build its barrier-free recreation complex for people with disabilities.
The federal government permits it. Iowa does it. So do 41 other states.
But Nebraska law generally doesn't make tax-exempt financing available to nonprofit organizations.
That would change if voters approve Amendment 1 in the May 11 primary election.
The proposed constitutional amendment would expand the number and types of nonprofit groups for which city or county governments could issue tax-free bonds.
Eric Crouch, the former Husker quarterback and spokesman for the Yes on 1 campaign, said the change would help communities because nonprofits could put more of their money into their work.
Interest rates on tax-exempt bonds typically are 2.5 percentage points to 3 percentage points lower than traditional loans.
“Passing this amendment will open the door for many projects that otherwise wouldn't be thought of because an organization may have come up short on funding,” he said.
Jeff Yost, president of the Nebraska Community Foundation, said the responsibility for paying off such bonds would fall on the nonprofits. If the nonprofits default, it would be the bond purchasers who lose money.
The amendment specifies that no tax dollars could be used to pay off the bonds.
Similar financing partnerships with public entities have been available for years to nonprofit hospitals, private colleges, K-12 schools, public housing authorities and nonprofit projects in blighted areas of Nebraska.
While there is no organized opposition to Amendment 1, voters rejected similar measures in 2002 and 2006.
This time, backers hope that being the only constitutional amendment on the ballot and having a stronger network of support will push it over the top.
“It's really a pretty simple idea,” Yost said.
Contact the writer:
402-473-9583, martha.stoddard@owh.com
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