Study: Iowa economic development on right track, but could be better
Written by Eric Page, Assistant News Director - email
DES MOINES (KWWL) -
The results of a study commissioned by the Iowa Chamber Alliance shows that while Iowa's approach to economic development is on the right track, the state needs to do a better job of funding incentives to make it more competitive.
The study, which was done by Deloitte Consulting LLP, shows that Iowa lags only behind Texas in using economic development incentives, but is way behind on its ability to impact projects through financial incentives.
"It is clear Iowa punches above its weight class in economic development. The approach and programs we have are working and the proof is in the projects. The question is, how many projects are we missing out on because we simply do not resource economic development efforts at a competitive level?" said John Stineman, Executive Director of the Iowa Chamber Alliance, in a written statement.
The study compared Iowa's economic development programs and funding with five other states: Minnesota, Nebraska, South Dakota, South Carolina and Texas.
The study also found that while Iowa has a competitive advantage in workforce development incentive programs, it is at a competitive disadvantage when it comes to the availability of discretionary funds to close deals.
The study also says that Iowa is level with the others in the use of property tax exemptions, sales and use tax exemptions, and research and development tax credit programs.
According to the study, Iowa, which once led the way in data center and technology incentive programs, is starting to fall behind the others.
"Iowa has a solid base of state-level economic development incentives tools upon which to build. However, to become more competitive, Iowa may wish to increase the funding level and flexibility of some of the State's key incentive programs," said Darin Buelow, a Principal with Deloitte Consulting LLP, in a written statement.
The study recommends that Iowa consider increasing the cap on economic development tax credits, find options to offer a "Deal Closing Fund or give the Iowa Economic Development Authority more discretion in awarding direct financial assistance, allow the sale, refund or transfer of economic development tax credits, expand the Brownfield/Grayfield Redevelopment Tax Credit program and augment data center incentives.
"The opportunity is there for Iowa. We are well positioned to compete – if we resource our economic development efforts at the right level. We also need to review our programs to ensure we have usable and valuable incentives to help Iowa continue its economic growth in the future," said Stineman in a written statement.
The Iowa Chamber Alliance is a non-partisan coalition that represents the 16 largest chambers of commerce and economic development organizations in Iowa, including Cedar Rapids, Dubuque, Iowa City and Waterloo/Cedar Falls.
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