Ask a local economic development booster what separates Omaha from similar cities its size and you’ll hear a number of answers.
It’s an impressive list:
» The community’s commitment to maintaining a strong workforce through quality public education, before, during and after high school.
» The city’s legacy of philanthropy, its history of fruitful partnerships between local businesses, private donors and government.
» Local economic advantages, Fortune 500 firms, strong work ethic, low unemployment, tax incentives and publicly owned utilities.
But there’s another, less-mentioned secret to Omaha’s success: Nebraska’s 1917 state law that allows the city to unilaterally annex land.
A 2007 World-Herald analysis of annexation laws around the country found no equal in other states. David Rusk, an urban planner and former mayor of Albuquerque, New Mexico, called the law “uncommon, perhaps unique; but in my judgment, it is a very wise provision.”
It is a vital, bipartisan tool that Mayor Jean Stothert plans to use to add another 14,000 people and more than $1 billion in property to Omaha.
The law allows Omaha to annex Douglas County communities and unincorporated areas of less than 10,000 people on its own. It’s how separate towns like Elkhorn and Millard became neighborhoods in the broader tapestry of Omaha.
It’s also how Omaha has avoided the fate of many other cities around the country — being ringed in by independent, suburban communities while the urban core is hollowed out.
Look at Milwaukee, Detroit or St. Louis. All were hemmed in by suburban cities and lost significant portions of their tax bases to suburban communities.
Annexation “has been very important to the economic growth of our city,” former Mayor Hal Daub, a Republican, told The World-Herald. “Adding to the population and tax base of the city supports property values, bond ratings, police and fire protection and public spaces, parks.”
His Democratic successor who annexed Elkhorn, former Mayor Mike Fahey, agreed, calling it one of the more important tools Omaha has that other cities lack. “Otherwise you’d end up like Des Moines or St. Louis, where people move out of the city and you lose your tax base,” he said.
A 2006 Brookings Institution report found ties between a city’s ability to annex surrounding land and its financial health.
Cities with greater authority to annex had more favorable bond ratings, enabling them to borrow money at lower interest rates.
Those ringed with suburbs that cannot be annexed tend to lose population and tax revenue and ultimately decline, the report found.
It helps that Nebraska’s law requires Omaha to be responsible in how it annexes, requiring a 10-year plan to pay off an annexed area’s debts.
State zoning law requires new neighborhoods within 3 miles of Omaha to be built to city standards so they can be absorbed more reasonably.
The city evaluates these Sanitary and Improvement Districts based on their debt loads, tax potential and how much of the city surrounds them.
The goal is to extend the city’s services to these areas without compromising the quality of services delivered to the older parts of the city.
Nebraska’s sound, practical approach on annexation provides quite a contrast to the situation in other states, many of which struggle to develop or sustain workable policies.
Complaints from annexed residents aren’t uncommon in such situations. Still, the fact remains that the metropolitan area as a whole benefits from the stronger heart of its urban core.
All thanks to an old state law that legislators in Lincoln have had to defend from time to time.
“Those cities that get ringed in choke,” said Paul Landow, who teaches political science at the University of Nebraska at Omaha and served in Fahey’s administration. “They can’t grow their population and their tax base. They really can’t move forward.”
Omaha can, and that’s why it does.
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