Lawmakers differ on job-creation strategy

DES MOINES – Key Democratic senators warned Wednesday that a House GOP budget plan will “decimate” the state's economic development efforts by cutting funding at a time when Iowa needs incentives and job-training efforts to compete effectively in “an innovation economy.”

However, the House leader of a legislative panel that oversees job-creation programs and funding said a better approach would be to ease regulatory and tax burdens on private businesses that are the true employment engines rather than relying on government programs to spur growth.

Sen. Bill Dotzler, D-Waterloo, who led a Senate “listen and learn” hearing Wednesday that focused on economic development and worker training needs, said he is concerned House Republicans want to “scoop” nearly $13 million in unobligated Department of Economic Development (DED) incentive funds that remain for the current year and then authorize $15 million to a yet-to-be-named effort that will replace the Grow Iowa Values Fund – for a net pool of $2 million for state job-creation activities for fiscal 2012. He said that comes at a time when Gov. Terry Branstad wants to retool the DED into a public-private partnership as part of his campaign promise to create 200,000 jobs over the next five years.

“There are a lot of projects that are in the queue that the economic development board has approved and they can't cover those tentative obligations that are out there. So we've got some serious problems in the Department of Economic Development and I don't' see how, if the governor is truly serious about creating 200,000 jobs in Iowa, that the path that they're heading down now coming out of the House is ever going to accomplish that. It's going in the wrong direction and we've got very, very serious problems in the Department of Economic Development,” Dotzler said.

“We're in an innovation economy. We're in a war for talent. We need to do certain things to keep young people here and to educate our existing workforce and new workers with opportunities in this innovation economy and we're failing under these budgets,” he added.

However, Rep. Jason Schultz, R-Schleswig, co-chair of the House-Senate economic development budget subcommittee, said House Republicans believe the key to spurring business expansion and job growth is improving Iowa's regulatory and taxation environment rather than investing in government programs that don't actually create jobs. He said the proposed commercial property tax reform the House passed Wednesday “will do far more to create jobs than the Values Fund ever did; it simply will do it in real life better with the free market and we'll get a much better result for far less money.”

“The Values Fund was nothing more than a treasure chest for pork projects and that is why we needed to get rid of it. I wish we could have zeroed it, but through compromise with the governor we ended up with what we ended up,” he added.

Dotzler expressed concern that House Republicans are seeking to make “abrupt changes' without a clear strategy to move the state forward.

“We're in an innovation economy. We're in a war for talent. We need to do certain things to keep young people here and to educate our existing workforce and new workers with opportunities in this innovation economy and we're failing under these budgets,” he said.

Sen. Steve Sodders, D-State Center, said he questioned whether DED Director Debi Durham supports the downsizing effort and she likely is giving indications to business prospects she encounters as a member of a 41-person Iowa trade mission delegation that they could receive consideration for state assistance that may not be available in the future depending on the outcome of ongoing budget negotiations in the split-control Legislature.

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