Iowa Chamber Alliance study finds Iowa's economic development toolkit effective, but under resourced
posted on Thursday, March 7, 2013 in Blog
The study rates Iowa's competitiveness with its neighbors and other highly competitive states in economic development programs
View study here
Des Moines, Iowa – The Iowa Chamber Alliance, a non-partisan coalition representing the 16 largest chambers of commerce and economic development organizations throughout the state, released today a new study examining Iowa's relative competiveness in its economic development efforts. Deloitte Consulting LLP was commissioned to examine the competitiveness of Iowa's state-level economic development incentives.
“This study confirms Iowa's approach to economic development incentives is on the right track, but it also demonstrates that Iowa does not resource its economic development incentives at a competitive level,” said John Stineman, Executive Director of the Iowa Chamber Alliance.
The Deloitte study found that Iowa lags only behind Texas in the “usability” of its economic development incentives – an important factor in how a state measures up in competing for economic development investments. Texas is widely considered one of the most aggressive states in economic development in terms of its incentive funding, its programs and its business-friendly tax and regulatory climate.
However, on the financial value side of economic development – the ability to impact projects through financial incentives – Iowa lags significantly behind its neighbors as well as other leading economic development states.
“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 Stineman.
The study examined Iowa's economic development programs and funding compared to five other states: Minnesota, Nebraska, South Dakota, South Carolina and Texas. South Carolina and Texas are consistently ranked as highly competitive states for economic development.
Other key findings of the study include:
- Iowa is at a competitive disadvantage in the availability of discretionary funds to help close deals as well as in offering corporate tax exemptions.
- Iowa performs at peer level in property tax exemptions, sales and use tax exemptions, and research and development tax credit programs.
- Iowa has a competitive advantage in its workforce development incentive programs.
- Other states have caught up to and begun to pass Iowa in data center and technology incentive programs – an area where Iowa was considered a leader previously.
“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” states Darin Buelow, a Principal with Deloitte Consulting LLP.
- The recommendations from Deloitte Consulting include:
- Consider increasing the cap on Iowa's economic development tax credits
- Evaluate options to offer a “Deal Closing Fund” or more discretion to the Iowa Economic Development Authority in awarding direct financial assistance
- Consider allowing the sale, refund or transfer of economic development tax credits
- Consider expanding the Brownfield/Grayfield Redevelopment Tax Credit program
- Consider augmenting Iowa's 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.
For more information about the Iowa Chamber Alliance's positions and legislative agenda, please visit www.iowachamberalliance.com. Copies of the study will be made available upon email request to firstname.lastname@example.org.
About the Iowa Chamber Alliance
The Iowa Chamber Alliance's mission is to put forth and enact an agenda to grow the state's economy through support of proactive programs that stimulate economic growth opportunities for the entire state and its residents. The Alliance members include chambers and economic development organizations in: Ames, Burlington/West Burlington, Cedar Rapids, Council Bluffs, Des Moines, Dubuque, Fort Dodge, Iowa City, Marshalltown, Mason City, Muscatine, the Quad Cities, Sioux City and Waterloo/Cedar Falls.
View the study here