Cutting off development funds is a bad idea

In Iowa, one third of Iowans live in the state’s four largest counties, Polk, Linn, Scott and Johnson counties. Those counties produce 42% of all the goods and services produced in Iowa and contribute a $ 1.5 billion share of the $4.3 billion in general fund tax revenue collected by the state.

Thousands of Iowans who don’t live in those counties work at business located in the four counties. Polk, Linn, Scott and Johnson counties are engines that play a large role in driving the state’s economy forward.

But some Republican lawmakers want to slap a three-year moratorium on the counties’ access to state economic development funds. Instead, the Iowa Economic Development would shift its focus to business projects in rural Iowa.

It’s a remarkably shortsighted bill. Taking dollars away from urban counties will harm their potential for landing big development projects that only larger counties can handle. And whether the change would boost rural counties is unclear, perhaps unlikely.

In Fiscal Year 2024, Linn County received roughly $18 million in direct IEDA spending and tax credits, with Johnson County receiving $5.3 million. Boone County received the most IDEA help, $21 million.

“We have one benefit, which is we have a population of workers — a lot of projects need bodies to be able to fill the slots,” said Doug Struyk, a lobbyist representing the City of Des Moines, at a subcommittee meeting on the bill.

“We believe removing the largest four counties from the ability to receive these incentive funds removes the ability for many projects to even consider Iowa. When they’re considering Iowa — they’re not just considering Des Moines, they’d be considering many other areas in the state,” he said.

Struyk’s assessment is correct. When Google announced a massive data center planned near Cedar Rapids, the city needed access to the state’s High Quality Jobs Program and the use of tax abatements. The IEDA board voted unanimously to assist the project.

Economic development shouldn’t be a zero-sum game. Money that helps large counties doesn’t mean the state is shortchanging rural counties. Iowa’s economic development effort, over the years, has done a good job helping create jobs in rural Iowa and its urban centers,

Concerned lawmakers should come up with a rural development effort that provides new incentives without grabbing existing funding. And they should scrap HSB 310.

(319) 398-8262; editorial@thegazette.com