U.P. OFFERS 500 JOBS IF LEGISLATURE ACTS
OMAHA -- A Union Pacific Corp. representative said Monday that the railroad giant would move 500 jobs from St. Louis to Omaha if the Nebraska Legislature re-enacts tax incentives for companies that invest money and create jobs in the state, the Omaha World-Herald reports.
Union Pacific spokesman John Bromley said that at least 500 jobs -- clerical and accounting positions paying about $30,000 each -- would be moved from the company's customer service center in St. Louis.
The railroad's pledge follows the introduction of bills in the Nebraska Legislature that would renew the Quality Jobs Act.
The act, which expired in 1999, allowed companies to receive tax benefits if they invest at least $50 million and create at least 500 new jobs, or if the companies invest $100 million and create 250 new jobs.
Critics of the act say that companies got more than they gave. Supporters say it helped generate $638 million in investments and 4,500 jobs.
Bromley said that Union Pacific used Quality Jobs Act incentives twice in the past and that, as a result, several hundred jobs were moved to Omaha and the company invested in office space and equipment in the city.
He declined to specify how much the incentives were worth to the company, although he said the company probably would share that information with state lawmakers later.
The two cases were Union Pacific's merger with Southern Pacific Rail Corp. in 1996 and with Chicago and NorthWestern Holdings Corp. in 1995.
If the act is reinstated this session, Bromley said, the 500-job exodus from St. Louis would be at least two years away. In addition, the railroad company would modify plans for its new downtown headquarters, which it has said would have roughly 1 million square feet. Completion is scheduled for 2004.
"We would have to add more footage to the building," he said. "I would expect it to go up since we're already taking up a whole square block.
"We still need to take that to our board of directors."
Union Pacific's pledge drew a mixed response among lawmakers.
Sen. Doug Kristensen of Minden, speaker of the Legislature, said he was excited by the Union Pacific news.
"Union Pacific is a pretty unique company to Nebraska," he said. "They're truly a Nebraska company. If they bring some good-paying jobs here, we'd welcome that."
Sen. Bob Wickersham, chairman of the Revenue Committee, said he was not surprised that a project has emerged to serve as a driving motivation behind reinstatement of the Quality Jobs Act.
"I think it's a poor way to do policy - looking at what a company says it will do at a certain time," he said. "It makes us look like a quid pro quo business, rather than doing the public's business."
Sen. Pam Brown of Omaha, a supporter, called Union Pacific's pledge "a wonderful announcement" but said the bill is not being pushed in reaction to prodding from any company.
"This is a huge priority. ... I absolutely will try as hard as I can for this bill to be passed," she said. "I will see to it that it will get prioritized."
Brown would not say whether she or another state senator would name the bill a legislative priority, an act that would increase its chance to be heard on the legislative floor.
Scott Moore resigned in mid-December as Nebraska secretary of state to become governmental affairs director for the Union Pacific.
The 500 jobs would come out of a St. Louis facility that houses 1,500 employees, Bromley said.
Losing 500 jobs would register much less of a dent in St. Louis than in Omaha. The 12-county St. Louis metropolitan area has 2.6 million residents, 1.4 million jobs and 70,000 businesses, according to the St. Louis Regional Chamber and Growth Association. Omaha has nearly 700,000 residents, 415,000 jobs and 18,000 businesses.
"Obviously, no one likes to lose jobs," said Richard Fleming, president and chief executive officer of the St. Louis chamber. "We work hard to gain jobs. ... We put a high value on the institution of Union Pacific and its long history."
Fleming said Union Pacific has received incentives in the past to expand its operations in St. Louis. The city tried unsuccessfully to become the rail giant's headquarters several years ago. In 1996, it successfully persuaded the company to locate several hundred call-center jobs there rather than in San Francisco, Denver or Omaha.
"We worked with the company and put together an attractive package to locate here," he said. "We spent a fair number of trips out there in Omaha to work with the leadership in terms of Union Pacific's needs with this market."
Fleming said he was not surprised by Union Pacific's pledge, adding that "we ultimately recognize that the customer must decide how needs will get met."
Nebraska Gov. Mike Johanns has said he wants to see the act reenacted but revised so that it benefits all parts of the state and creates better-than-average jobs.
The Quality Jobs Act already was on lawmakers' minds, with multiple legislative bills introduced to reinstate the economic development law in one form or another.
Kristensen, who introduced one of the measures, said reinstatement is "on my personal short list of priorities for this session."
Kristensen said he was speaking as an individual senator, not as speaker, when he said he would give the matter priority.
He has two bills on the table aimed at attracting high-wage jobs to Nebraska. Legislative Bill 110 would reinstate the Quality Jobs Act in its original form. LB 620, the Invest Nebraska Act, would provide an array of incentives designed to encourage high-paying jobs in small-population counties as well as urban areas.
Kristensen said he regrets that lawmakers ran out of time last year to reauthorize the bill.
"That's why I reintroduced it this year," he said.
Legislative Bill 119, introduced by Wickersham, would reinstate the economic development measure for only five years.
Wickersham, who often expresses reservations about the use of tax incentives
to encourage economic development, said he introduced his bill to help ensure
that the Revenue Committee has some control over whatever is finally enacted.
January 23, 2001
© 2001 Brotherhood of Locomotive Engineers