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Ames Barilla Pasta Plant Expansion Raises Concerns over Tax Credits

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Barilla pasta plant (WHO-HD)

AMES, Iowa — The Ames city council has approved a tax incentive request from the Barilla pasta plant to expand its current facility.

The company’s $16 million expansion comes with more than a million dollars in state tax credits.

It’s the second time the company has requested a major expansion project in two years and this time one state lawmaker says the state should starting thinking differently about how it supports big businesses versus small businesses, who are struggling to keep employees and are starving for capital.

“I think that it is probably time for us to do an overhaul and get under the hood of our economic engine and figure out what`s working and what`s not working,” says (D) Senator Matt McCoy.

McCoy says that overhaul needs to come in the form of focusing more on existing small businesses and teaching them how grow and not on big companies trying to expand.

On Tuesday, the Ames city council unanimously voted to approve a tax incentive in hopes of attracting the company to expand its facilities in Iowa rather than its other plant location in New York.

“We all recognized the value that Barilla brings to the community not just in terms of their investment that they’ve had for a number of decades and the jobs contributed to the community,” says at – large council member, Amber Corrieri.

The $16 million project would bring a new building, a rail yard expansion,  six new silos to store wheat and 41 new jobs. The city is also offering the company a $3 million tax abatement.

The Iowa Economic Development Authority is recommending a$ 1.5 million incentive package in which $1.2 million of those dollars are state tax credits.

Corrieri says,“ I recognize that these are really interesting times for the budget in our state and we need to be diligent in making sure that we are making aware of all the priorities that we have in terms of funding in the state and how to balance those priorities.”

However, McCoy says that justification is difficult to make to tax payers who are helping fund foreign companies when the state is making massive budget cuts towards areas like education and instead putting millions of dollars toward tax breaks.

“We have now $500 million that is escaping through tax avoidance, tax credits and incentives. It’s up now up $500 million a year,” McCoy says. He adds economic development programs going forward need have programs tailored to help small businesses succeed and grow.

The Iowa Economic Development Authority will vote on expansion project on March 17th.