Also, while incentives for the $1.4 billion Orascom Construction Industries project in Lee County continue to stir controversy, it’s important to remember the lion’s share of assistance provided by the state Economic Development Authority goes to companies located in Iowa.
We acknowledge reasonable questions exist about the Orascom deal and others. The Branstad administration absolutely must do proper homework before offering incentives and should be able to explain and justify their use. Still, we are comfortable with an overall aggressive, competitive strategy by the administration with respect to incentives, and we believe this approach is paying dividends — not simply for Northwest Iowa, but for all of Iowa. As a whole, our state appears to be on the right track.
Until this state dramatically improves its overall tax environment for business (property tax reform passed by the Legislature this year was a positive step in the right direction), incentives — sometimes big incentives — will be a fact of life if we want success within the intensely competitive arena of economic development.
Professionals will tell you this: Economic development incentives cannot make a bad deal good, they can only make a good deal better. In other words, the state of Iowa must have many other key pieces in place first: a favorable regulatory climate, land, transportation infrastructure, competitively priced natural gas and electricity, municipal utilities, high-speed communication networks, strong educational institutions, and a skilled and available labor pool.
Generally speaking, if economic development incentives build on what we have and help push a project over the finish line for Iowa, then we believe the money was well spent.