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Tax Incentives Key to Creating Economic Development

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DES MOINES, Iowa -- The Iowa Economic Development Authority says the state has a business friendly climate and a lot to offer companies, but providing tax incentives can level the playing field and make the difference when competing with other states.

IEDA Marketing & Communications Director Tina Hoffman says more often than not, the projects the tax incentives help create turn out better than expected. "Often times they say we`re gonna create a hundred jobs, maybe they create 150, and those are just direct jobs with that project. We`re not even talking about the kinds of construction related jobs or ancillary jobs that might up when a company comes to town and puts in a $200 million expansion, for example," said Hoffman.

Since January of 2011, the projects that the IEDA has assisted with incentive programs, have pledged to create over $13 billion dollars of capital investment in iowa. "that`s $13 billion with a b. that`s a whole lot of investment that`s going on, that`s a lot of jobs that are being created," said Hoffman.

But things don't always go according to plan. The website has a list of 231 economic development projects that are not proceeding. Hoffman says if certain criteria is not met on a project, the plug can be pulled. "We put together a binding contract with the IEDA and the company that is being awarded incentives, as well as the community that they’re going to. "So, we delineate what those obligations are; how many jobs are we expecting to be created for these incentives? What’s the capital investment? What is the wage level? Those are all criteria in our program, and then so with that contract we’re able to say if for some reason, that wasn’t successful, or you weren’t able to meet those obligations, and there are lots of reasons why that might happen, then yes, tax credits are repaid or direct financial assistance is repaid, so that’s why that contract is there," said Hoffman.

The Iowa Chamber Alliance announced its vision for economic growth today. The priorities and policy recommendations for strategic initiatives key to fostering healthy economic growth can be seen by viewing this document: ica-2017-state-agenda-news-release-final

Executive Director John Stineman says tax incentives are important, but, there are limitations. "We`re not in favor of giving away the store. We want to make sure that when we use incentives, that they`re appropriate, that they`re accountable, and that there`s a real tangible result, and a return on the investment and we always have to be looking at that we believe that that`s central to the equation," said Stineman.