IPEP: Promise and some concerns

By The Gazette Editorial Board

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Gov. Terry Branstad ran for governor last fall promising to create jobs. And he argued, convincingly, that fulfilling that objective meant reinventing Iowa's state economic development agency.

That reinvention is now moving forward. The Iowa House has passed legislation designed to transform the Iowa Department of Economic Development, or IDED, into the Iowa Partnership for Economic Progress, or IPEP. The Senate is still considering the measure, but action is expected before adjournment.

The partnership would be steered by a seven-member board of business leaders chaired by the governor or lieutenant governor. Taxpayer-funded development programs would be guided by a state-run development authority similar to the current department.

The new wrinkle would be a private, non-profit corporation created to raise private dollars that would pay for additional development efforts.

Supporters of this private-public approach contend that a non-profit armed with private dollars and unfettered by bureaucratic red tape could act faster and with more flexibility than the traditional state-run program. For example, the development corporation would be free to sink its dollars into a risky startup venture that would never receive backing from a state-managed program.

A private entity could bankroll travel at a moment's notice, without state authorization. It could tap private sources when public dollars aren't available. This kind of speed and agility could recharge Iowa's drive for new jobs and economic growth.

But giving the private sector a much larger role in public development policy also creates concerns. We're glad that the legislation contains strict rules regarding conflicts of interest. The non-profit corporation will be subjected to legislative scrutiny and an annual audit.

What hasn't been determined is whether the names of donors who fund the corporation will be made public. We believe donor disclosure is fundamental to necessary transparency. If the corporation is going to be making a sales pitch on the state's behalf, Iowans deserve to know who is paying for it.

Backers insist that because IPEP's director, Debi Durham, will no longer be subject to Senate confirmation, the agency will be shielded from politics. We're skeptical, considering that the governor will play a primary role in directing the agency and selecting its governing boards. We urge the governor to avoid filling these panels with political allies.

We are hopeful that these concerns can be addressed without sacrificing the advantages of private collaboration.

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