How Lincoln, Nebraska Weathered the Great Recession

In advance of our annual City Fiscal Conditions report release eventin Washington, D.C. on October 28, this blog takes a look at how Lincoln, Nebraska weathered the recession. This information and more is explored in depth in this story map.

Ten years after the Great Recession, some cities have rebounded, others have not. Amid decelerating property, sales and income tax revenue growth, it’s likely that another recession is right around the corner. We just don’t know when.

But while many Americans are fearful of this unknown fate, there’s a lot cities can learn from the experiences of their peers during the previous downturn. Lincoln, Nebraska is a great model. While many Midwestern cities have seen stagnant growth or decline in recent years, Lincoln (population: 285,000) has been touted recently as “recession proof.”

On the face of it, Lincoln looks quite average compared to the rest of the nation. Its job growth over a 10-year period is eight percent and population growth is 12 percent, on par with the national average.

But what has made the city more economically resilient than other cities is its access to stable university and government jobs.

Additionally, the city’s Millennial population is slightly higher than average, at 46 percent. There’s no doubt that some of those folks are driving Lincoln’s nationally-recognized startup success. By making lives easier for athletes, traveling businessmen and real estate professionals, the city has proven to be a disruptive tech leader.

Finally, Lincoln has been resilient to the typical fiscal pressures faced by many cities. That’s because Lincoln has maintained a stable surplus between its revenues and expenditures (see chart below).

general fund lincoln.png
Source: City Fiscal Conditions; Lincoln Comprehensive Annual Financial Reports. This information and more is explored in-depth in this story map.

Even throughout the recession, home prices in Lincoln remained steady and began increasing well before other cities in the nation. This enabled the city to maintain its property tax revenue stream during the Great Recession and even generate a general fund surplus (see chart below). Since property taxes from residential and commercial property are the number one source of revenue for cities, at nearly 32 percent (sales taxes are next at 18 percent and income taxes lag behind at eight percent), this is a great sign that Lincoln will continue to do well fiscally, even in the face of another recession.

property tax revenue lincoln
Source: City Fiscal Conditions; Lincoln Comprehensive Annual Financial Reports. This information and more is explored in-depth in this story map.

We already know cities faced some uncertainty in 2018. But what does the rest of 2019 hold? Cities, towns and villages continue to tell that story. And fortunately, as with Lincoln, local leaders have lessons to learn and steps they can take to ensure their communities are resilient in the face of downturns, recessions and anything else they may encounter on the road ahead.

Want to take those next steps? We invite you to attend our next 2019 City Fiscal Conditions report release event on October 28 if you’re able, read the report when it comes out that morning, and check out our story map in the meantime.



About the author: Spencer Wagner is a Local Democracy Associate with NLC’s Local Democracy Initiative. His research focuses on state preemption of local policy and its impacts.