State-funded job creation programs achieving roughly two-thirds of goals, audit finds

The Iowa State House chamber on Thur. Mar 11, 2016. (Rebecca F. Miller/The Gazette)
The Iowa State House chamber on Thur. Mar 11, 2016. (Rebecca F. Miller/The Gazette)

DES MOINES — Iowa shelled out almost $310 million to nearly 1,000 economic development projects from 2003 to 2014, and among completed projects companies met 64 percent of job creation goals, according to a state audit published Wednesday.

Final numbers are not yet available for hundreds more projects, according to the report.

The report, published Wednesday by Iowa auditor Mary Mosiman, found 987 projects received $310 million in state financial assistance from 2003 to 2014, plus another $1.4 billion in tax relief.

Among the projects, 325 --- roughly one third --- are completed as reported by the state economic development board. Of the 18,503 projected new jobs at those projects, 11,840 --- or 64 percent --- have been realized, according to the report.

Another 396 projects, with 24,757 projected jobs, are considered in progress and do not have an accounting of jobs created.

Another 266 projects had their contract declined, rescinded or terminated, or are in default. Those projects included projections of 14,324 jobs. Most of those companies would not have received their financial assistance, and any that did would have been required to refund it, state economic board spokeswoman Tina Hoffmann said.

All told, projections suggested the projects would create and retain 57,584 jobs. But as of 2014, only 11,840 --- or 21 percent --- had been created.

In the report, Iowa auditor Mary Mosiman recommends the state’s economic development board work with state lawmakers to revise the board’s annual report to improve transparency and accountability, and to provide a better analysis of the success of state funds awarded to businesses for the purpose of creating and retaining jobs in Iowa.


“We want to always do better, and of course any feedback that we have in (the audit) we obviously are going to take seriously,” Hoffmann said.

Hoffmann said during the audit’s time frame the state went through three governors and six economic development directors, plus an economic recession. She said under current Gov. Terry Branstad and economic development director Debi Durham, the state has attempted to streamline financial assistance programs.

Branstad said he had not yet viewed the audit; he spend Wednesday touring flood damage in Eastern Iowa. Branstad said he would look at the report and entertain suggested improvements in the state’s economic development program.

“We used to have a whole alphabet soup type of programs and they were very restrictive. Now we have a much more streamlined and nimble program,” Branstad said, adding, “I’m always interested in looking at what works and what doesn’t and how it can be made better.”

Sen. Rita Hart, who chairs the Senate Economic Growth Committee, said legislators will need to study the audit and take its recommendations seriously.

“We need to look at the audit, and we also need to look at what the auditor is recommending so that we definitely get some accountability here, some transparency,” Hart said. “We need to make sure the taxpayers are getting their money’s worth out of these projects.”

The Gazette’s James Q. Lynch in Cedar Rapids contributed to this report.



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