Hubbell touts economic development
Democratic candidate takes ‘Get Income Rising’ tour
Fort Dodge is growing, and it couldn’t be done without the economic development tools available to it, Fort Dodge area leaders told candidate-for-governor Fred Hubbell Tuesday afternoon.
Keeping those tools and tax credits in place, as well as the importance of working collaboratively, was a top topic at the meeting at the Greater Fort Dodge Growth Alliance.
The Democratic candidate from Des Moines said very little, asking questions and listening on a stop along what he calls his “Get Income Rising” tour across Iowa. Hubbell was on the third day of his four-day trip across Iowa to meet with business and community leaders.
The most important tool for economic development cities and counties have is tax increment financing, said Dennis Plautz, chief executive officer of the Greater Fort Dodge Growth Alliance.
“TIF is the only real tool a local jurisdiction has. The rest of of it is run from Des Moines,” Plautz said. “The only alternative is cities either have to have cash up front, or they would have to issue general obligation bonds.”
TIF occurs when improvement is done on a property, and the government puts the resulting increase in tax revenue toward a special purpose. In Webster County, TIF was used to provide tax rebates for a number of years to Cargill and CJ Bio America, for instance.
Having to issue general obligation bonds slows down the process, and costs $12,000 for a referendum, Plautz said.
TIF is a fast, flexible, useful tool that gets a bad reputation because just a few towns use it poorly, he added.
“Some of the uses of TIF around the state are exactly what give people the opportunity to go on the radio and beat up TIF,” said Fort Dodge Mayor Matt Bemrich. “All of a sudden we have legislators screaming about we need to do something about this TIF abuse. Well, 99 percent of us are using it correctly.”
“I worry with tax reform and some of these things going on, we’re not going to throw away things for the moment that’s really going to cost us down the line,” Plautz said.
“There are plenty of people in the legislature who want to control (economic development) at a state level,” Bemrich said. “We still believe the best use of a tax dollar is on a local level.”
He laughed. “It’s easy to say that as a mayor, and not governor.”
Hubbell referenced his experience in business and in leading the former Iowa Department of Economic Development, and said making a decision at the “lowest” level possible is usually best.
“First of all you make it faster, and it’s usually a better decision, because the people who are making the decision are closer to the people who are impacted by the decision,” he said.
Kelly Halsted, Growth Alliance economic development director, detailed how numerous state tax credits helped bring Cargill to the region. Because Cargill was here, CJ Bio America also moved in, she said, and CJ is now on its second expansion, worth $51 million and 18 new jobs.
“Those types of things don’t happen just because they choose Iowa,” Halsted said.
Bemrich said he’s hearing talk of eliminating certain tax credits, as Iowa faces a steep budget shortfall, and said lawmakers should look carefully at which ones work.
“Some of the tax credits we have used up here, we can show direct return on that investment,” he said. “Without those credits, that investment would not have occurred.”
“It’s so complex,” Plautz said. “I’ve worried for years that when legislators turn over on a regular basis, they don’t always have time to understand the complexity of decisions they’re making, and how it might impact us five years from now versus next fiscal year.”
Bemrich agreed, and said the recent rollback of property taxes was an example.
“I have still yet to see anybody who got their taxes rolled back build something new next to them, or build something different,” Bemrich said. “I don’t believe that was the best use of those tax dollars.”
The state is supposed to backfill the amount that cities lost from that change, Bemrich said, but that won’t last forever.
And Hubbell said there’s reason to be worried about that funding, with the state’s projected $45 to $75 million shortfall for next year.
“I’d be worried about that commercial property backfill. And then other cuts in health and human services, and social programs,” he said. “They’re not going to give education hardly any money. They’re not going to help out our mental health, or with our privatization of Medicaid, both of which are failures.”
Asked about what could be done, he said, “Change the leadership.”
“There’s plenty we can do,” Hubbell went on. “We just don’t have a governor or a legislature who know how to manage a budget, and they have the wrong priorities.”
Hubbell said current priorities focus on what he calls “wasteful corporate giveaways,” to companies that build here but don’t create many jobs, or much tax revenue or other benefits.
“I’d rather use the $20 million tax credits for projects like you have here, and projects elsewhere in the state that are actually creating good, high-quality jobs,” Hubbell said. “I’d rather give state tax credits to companies who pay income taxes in Iowa. A lot of them don’t.”
He also praised the region for the way the city, Webster County, and the Growth Alliance all work together.
“Anyone I’ve ever worked with or been associated with, civic, non-profit, private, public–you just try to work together, find common ground, and get stuff done,” he said. “I think that’s what we need in state government.
“I know it won’t be easy, but somebody’s got to try. If you can make it work in Fort Dodge, why can’t it work in the Capitol?”