Economic development progams could see cuts

DES MOINES - With a rising number of Iowans out of work, the state's elected officials have promised to put job creation near the top of the priority list.

But in lean times, some state economic development programs meant to create jobs could see cuts before lawmakers head home this session.

Sen. Bill Dotzler, D-Waterloo, said lawmakers are scrambling to find dollars for economic development programs now that they are scaling back spending across the state budget.

"I don't think that people realize the depth of the problem that we have here," said Dotzler, who co-chairs a subcommittee overseeing the state's economic development spending.

Dotzler said he expects to see considerable cuts, likely 13.5 percent, to the Iowa Values Fund's $35 million budget used for direct incentives to firms creating jobs in Iowa.

Supporters of state-run economic development efforts are hopeful the state's Community Attractions and Tourism, or CAT, program sees funding sustained.

The CAT program has helped fund over 300 tourism and community betterment projects in 92 Iowa counties, totaling $1.7 billion in construction.

Gov. Chet Culver's proposed budget would allocate $10 million for the CAT program, but no money for a companion program meant to improve community riverfronts known as RECAT.

Andy Anderson is chairman of the Vision Iowa board, which oversees CAT. He said they won't take action on any pending proposals, including a museum in downtown Sioux City, until they are sure funding will be there.

"We've always had great support from the Legislature and the governor, and we think the program still has a big role to play," Anderson said.

The CAT program currently has $1.2 million, far less than the nearly $10 million that being requested by local groups seeking dollars.

The Sioux City museum is seeking $3 million; a performing arts center in Coralville is seeking $1.8 million, and the World Food Prize in Des Moines is seeking $5 million.

Those projects have cleared an initial hurdle and currently are in negotiations with the board for potential awards.

With dollars in short supply, state lawmakers are looking for other ways to spur economic development that won't take cash.

Those include a proposal to boost historical tax credits to $50 million, as well as additional tax incentives for the film industry, which already have helped draw productions to the state.

Lawmakers also want to simplify the complicated web of economic development programs with different wage standards and requirements.

A bill pending in the Legislature would offer incentives based on what firms offer in wages and benefits to employees. The intent is to make it easier for businesses to find out what they're eligible for.

"We're putting consistency within the programs, making it easier for developers to really understand," Dotzler said.