Legislators discuss tax incentives, job training at briefing
By BROOKS TAYLOR
Mt. Pleasant News
Tax incentives, lack of skilled workers, lack of housing and the Iowa Fertilizer plant were some of the prominently discussed items at the March 23 economic development legislative briefing at the Chadwick Library on the campus of Iowa Wesleyan College.
Jason Hutcheson, president and CEO of the Burlington Partnership and a director for the Professional Developers of Iowa, was the guest panelist and said tax incentives for economic development are a hot topic in the Iowa Legislature, largely because of the $110 million in tax credits given to the Iowa Fertilizer plant which soon will be built near Ft. Madison (actually in Wever).
“Incentives are coming under scrutiny from both the left and the right in the legislature largely because of Iowa Fertilizer,” Hutcheson said.
State Rep. Dave Heaton, R-Mt. Pleasant, agreed the incentives for economic development can be a “hot button” issue,” but noted that Mt. Pleasant has prospered because of incentives and aggressive recruitment.
“Incentives can be a debatable issue,” Heaton began. “I did business in town (Mt. Pleasant) for 45 years. Every plant you see here came because of incentives and because they were aggressively recruited. We had 5,000 factory jobs here at one time. We still have a viable manufacturing community although it is on a smaller scale.
“I know there was a lot of criticism of the fertilizer plant,” Heaton continued. “Most of the money is tax credits. We gave them low-interest loans and tax abatement for a while. Those who build the plant and work there will pay taxes and bring economic prosperity to southeast Iowa. The plant will more than double the Rural Electric Cooperative’s (REC) usage. All of southeast Iowa will benefit from this.”
The state representative said the state has to be a participant in economic development but not the issuer of a blank check. “I’m a supporter of government participation because I have seen what it does for a community.”
State Sen. Rich Taylor, D-Mt. Pleasant, said he support state participation in economic development — up to a certain point.
“I didn’t realize I was against the Iowa Fertilizer plant until the governor said I was during a visit to Ft. Madison. I never said I was against it. I think it is great, but think we spent too much money on it,” Taylor remarked.
“We should have done our homework better on the plant. It is great for southeast Iowa,” Taylor continued. “We spent $110 million in tax credits for a foreign company, leaving only $10 million in the fund.”
The legislators said a bill has been introduced in the legislature to expand the tax credit fund to $185 million and both said they supported it.
Taylor, however, said he favors more oversight of Debi Durham, state economic development director and her department. “We think the state economic development director should have a little more accountability.”
Hutcheson disagreed, saying, “I get very nervous when the legislature wants more control of economic development. There has to be some separation. There is an economic development board who makes these decisions.”
Heaton said there should be better communication between the department and the legislature. “Should the legislature be involved where plants are located and incentives received? Probably not. But I think there should be a line of communication open between the legislature and the economic development department on what is being done.”
Hutcheson said tax credits are not necessarily a “give-away” program. Rather, companies must earn them. “Companies don’t get to claim tax credits unless they reach certain benchmarks. Then, they claim it on their corporate income tax but they must file corporate income tax to claim the credits. It is similar to a home mortgage deduction for individuals.”
He also said he thinks the “issues” with Iowa Fertilizer are blown out of proportion. “Anytime you are a $100 million conglomerate, you are going to have some issues.”
“The oversight I am talking about,” Taylor said, “is at least include somebody in the discussions. The fertilizer plant was pretty much a done deal before anybody knew what was going on. I think we should be a little bit more above board because $110 million is a lot of money.”
And then there is the matter of skilled workers in the area, a must if the region hopes to attract jobs.
Hutcheson said he knows of at least one company who said it would hire 100 more people if it could find skilled workers. “There is a skill gap, you have to be motivated to learn a new skill,” he noted.
Young people have to recognize the need for some post-secondary education, Heaton said. “Community colleges recognize this and the challenge is to pull these kids into school and get them trained. We just have to have a more skilled workforce to attract the good jobs. There must be a lot of work done to encourage kids to step up and take rigorous courses. That is the way the job market is and going to be.”
The senate is working on appropriating more job-training funds for community colleges, Taylor remarked. “Community college’s funds are limited and there needs to be more (funding) for community colleges. I am hoping we will pass a budget that will help community colleges.”
Another need for job creation is more housing, Mt. Pleasant Mayor Steve Brimhall said. “We have a huge issue with no one building houses…Housing is starting to become an issue. For people coming to southeast Iowa, there is no place to live Real-estate agents tell me that there are only 66 percent of the normal house listings.”
In other topics, Taylor said the senate passed an earned income tax credit bill that will help the Iowans who need help the most. “This is a bill for the working poor and amounts to $50 million statewide, “ he explained. “I think this is a great economic development tool, because the money goes back into the community.” The legislature also passed the bill last year but it was vetoed by Gov. Terry Branstad.
Finally, Taylor emphasized the state needs to expand the preschool program. “Now, we are starting at four (years of age). We might start at age three and then in a couple of years lower it to age two. If you wait (to education a child) until kindergarten, the child is lost. We have to decide whether we want to spend money upfront.”
Heaton mildly disagreed. “When do you let the institutions in and take the parents out? I am all for preschools but we can’t go as far as schools providing the primary care (for children).”
The briefings are sponsored by the Mt. Pleasant Area Chamber Alliance. The final briefing will be Saturday, April 26, at the Chadwick Library from 8:30-10 a.m.