(The following Associated Press article by Scott Bauer was posted on the Grand Island Independent’s website on January 28.)
LINCOLN, Neb. — Union Pacific Railroad still plans to add 600 employees in Nebraska in order to qualify for tax breaks, the company said in a letter to state lawmakers.
The letter comes at the same time the nation’s largest railroad announced it would be laying off up to 300 people by March and 700 more positions will not be filled this year as people leave or retire.
Union Pacific won approval in 2001 to receive state tax breaks for its new $260 million headquarters in Omaha.
In order to receive those incentives, the company must add at least 500 new positions to the headquarters and make a $200 million investment in that project.
If other UP employees who are not working at headquarters lose their jobs, that does not count against the employee requirements at the headquarters. However, if the company moves a job from outside Omaha to the headquarters, that would count as an addition.
The company plans to move more than enough workers from a customer service center in St. Louis to Omaha to qualify for tax breaks, said Joseph Bateman Jr., senior assistant vice president for governmental affairs at UP, in the letter to senators dated Jan. 21.
In the letter, Bateman said it will be 2004 before UP will meet the requirements for tax breaks under the Invest Nebraska Act.
The company could chose to receive income tax credits equaling 15 percent of its investment or up to 5 percent of the payroll of workers added to the headquarters for 10 years.
If the investment was $260 million, the investment credit earned would be $39 million. If 600 workers were added who earned more than $40,000, the wage benefit credit would be $1.2 million a year.
The headquarters project also could qualify for the Employment and Investment Growth Act, better known as LB775. The company is expected to earn at least an additional $47 million in tax breaks under that program, according to a legislative analysis done in 2001 that assumed the total cost of the project would be $235 million.
The 19-story, 1.1 million-square-foot, Union Pacific Center is scheduled to open in 2004. Founded in Omaha in the 1800s, Union Pacific has grown into a company of nearly 50,000 employees and more than 33,000 miles of track across the western two-thirds of the country.