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CEDAR RAPIDS METRO ECONOMIC ALLIANCE
Public policy issues critical to the Cedar Rapids regional economy received a lot of attention during much of the Iowa Legislative session this spring. Unfortunately, not all the attention was positive, and not enough of it resulted in legislation that will advance the Economic Alliance’s vision of being the top economic growth region in the country. As the summaries below detail, there were important successes. But pro-business/pro-growth coalitions also were forced to spend a significant amount of time
and energy defending policies and practices that have helped create good jobs and strong capital investment. Our allies at the Iowa Chamber Alliance and Professional Developers of Iowa have called this a disappointing session. While there were some successes, there were clear disappointments regarding business support and economic development.
Commercial Property Tax Reform Both parties and both chambers of the Legislature, as well as the governor, had declared commercial property tax relief/reform their No. 1 priority for this session. It still didn’t get done. The closing days of the session included rumors about a deal between parties, but ultimately the session closed with the huge inequities to commercial property taxpayers still unaddressed. That failure stands as one of the most disappointing aspects of this session.
Job Creation Initiatives The Iowa Economic Development Authority, under the leadership of Director Debi Durham, has been reshaped to better include private sector leadership and funding. Her plan, which was presented earlier this year to a Downtown Rotary session in Cedar Rapids, has been widely lauded by the business community and seems to have bipartisan support in the Legislature. And yet, when it came time to fund the proposed $25 million job creation incentives Durham needed to support the growth, retention and recruitment of interstate commerce companies, her request got slashed, leaving it at only $15 million. This incentive fund has been a critical tool for the Economic Alliance in its work to bring more jobs and capital investment to this
region. Several recent economic successes simply would not have happened without such support, and it’s disappointing the Legislature has been so reluctant to invest in this job-creation strategy.
Tax Increment Financing (TIF) The Legislature ultimately passed a bill requiring more transparency and reporting, plus added some widely supported anti-piracy measures. We can’t argue with the bill that was approved, and we welcome the chance to better document the costs and benefits of TIF. The frustrating thing was the debate that occurred before approval. A shocking number of legislators wanted to sharply restrict how communities could use TIF, to an extent where Iowa would have become non-competitive with all other states in our region. Many business leaders made special appeals to legislators to keep TIF as a strong economic development tool. While some would describe the bill as a “victory” for pro-business interests, we could have been more helpful on commercial property tax reform or other pro-business interests if we hadn’t had to spend so much time and energy on defending TIF.
JUNE 2012
We want to thank our area legislators for their work this session and for their public service as elected officials. In many ways, it was a difficult session with its fair share of disappointments. But our delegation is the envy of many other urban areas in Iowa. They hold influential leadership positions in both chambers of the Legislature. They are quick to respond to our calls or e-mails. And many of them reach out to us when they want more information about
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how proposed legislation might affect our ability to grow the local economy. The delegation worked across party lines to pass the Growth Reinvestment Initiative and to work together on several other pro-growth initiatives that were highlights of this session. We look forward to continuing to build on the relationship.
Other Successes Throughout this year’s difficult session, its important to note that there were also some successes to celebrate. Thanks to the work of our dedicated legislators, the following initiatives have advanced:
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Six regional STEM (Science, Technology, Engineering, Mathematics) hubs have been created, including one in Iowa’s Creative Corridor co-hosted by the University of Iowa and Kirkwood Community College. The focus on STEM education was fully funded at $4.7 million by the Legislature. The education initiative has direct ties to workforce readiness and the region’s ability to recruit and retain companies looking for these types of skills.
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Companies will find it easier to sell to their employees with a new law that allows capital gains deductions when ownership is turned over to employees. Making so-called ESOPs (employee stock ownership plan) easier to create could help keep some companies in Iowa that might otherwise be sold to out-of-state investors.
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Funding for brownfields/grayfields redevelopment was increased. Several Cedar Rapids area projects have used the state program in the past to build in-fill projects on long-abandoned properties. The program ran out of money last year, leaving some potential projects without support, so the additional investment from the state was well justified and strongly supported.
Growth Reinvestment Initiative A new law could net up to $15 million a year in state money for flood protection projects. The funding comes via sales tax revenue growth within each city, meaning communities can literally help themselves, with proceeds from strong local economies being reinvested to protect those economies from dangers like those suffered in the Flood of 2008. The state commitment should enable Cedar Rapids to begin at least a portion of east-side flood protection, and it likely will be used by several other Iowa communities as well. The legislation got strong bipartisan support, passing unanimously in the Senate and by a wide margin in the House before being signed by Governor Terry Branstad. It stands as the most significant legislative accomplishment of this session, and is a credit to Cedar Rapids Mayor Ron Corbett and other city leaders who were able to make the case for this in a difficult legislative environment.