2019 LEGISLATIVE SESSION

Iowa lawmaker's plan would push rural economic development

Bill would force more state money into small cities, counties

The State Capitol dome is illuminated by the sunset in Des Moines on Thursday, Feb. 16, 2017. (Rebecca F. Miller/The Gazette)
The State Capitol dome is illuminated by the sunset in Des Moines on Thursday, Feb. 16, 2017. (Rebecca F. Miller/The Gazette)
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DES MOINES — House Appropriations Committee Chairman Pat Grassley was expecting to have a battle on his hands when he proposed legislation to push economic development in rural Iowa.

“When I came up with this before the session started, I expected it to be much more of a war” between urban and rural interests, the New Hartford Republican said Tuesday.

“The fact that this wasn’t an all-out war makes it a positive sign that everyone is trying to reach the same goal, which is incentivizing economic development in rural Iowa.”

Grassley made clear that House File 252 is his attempt to force the Iowa Economic Development Authority to step up economic development efforts in rural Iowa.

“Representing a rural district, I understand that I won’t be able to have significant economic development in every 1,000-person town,” Grassley said.

“I think I could do economic development in Polk County” because of the resources available in the state’s larger communities, Grassley said.

Many of the communities in his Hardin-Grundy-Butler County district in north-central Iowa — where the biggest town is Iowa Falls, population 5,200 — share economic development resources.

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“We have to come up with a way to force the EDA and the incentives out into the rural areas,” he said.

Some smaller communities don’t want to go to the effort of applying for assistance from the EDA “because they feel they’re going to lose anyway to the bigger communities,” said Rep. Holly Brink, R-Oskaloosa.

The bill defines “small city” to mean those with populations of less than 30,000 and counties with fewer than 50,000 residents. Fifteen of Iowa’s 944 cities have at least 30,000 residents and only 10 counties of the state’s 99 counties have more than 50,000 residents.

While no one spoke against the bill, several lobbyists suggested modifications to make the guidelines less rigid, especially a requirement that at least 50 percent of the tax incentives awarded by the EDA go to projects in smaller communities.

Based on the EDA awards in the past five years, nearly $10 million a year could go unallocated, according to John Stineman of the Chamber Alliance, which represents the largest communities.

He and others also suggested a sliding scale based on population for the local investment requirement. EDA guidelines call for a 20 percent local match, but lobbyists advocated that could be waived for the smallest communities and increased as populations rise.

Rep. Chris Hall of Sioux City, the ranking Democrat on Appropriations, cautioned against making the bill “too prescriptive.”

Noting that 71 of 99 counties lost population in the 2010 census, “it’s important to put emphasis on rural economic development,” Hall said.

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However, he added, it’s important to make the state, “as a whole,” more attractive for economic development.

That includes quality-of-life measures such as investing in education, health care, water quality and outdoor recreation rather than “narrowly focus on economic development.”

l Comments: (319) 398-8375; james.lynch@thegazette.com

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