Free Market Think Tank Chairman: “Simply No Evidence” Iowa Grants “Are Anything But Useless” | Iowa
(The Center Square) – The Board of Directors of the Iowa Economic Development Authority announced July 16 its latest round of loans and tax breaks for capital investment in the state through the High Quality Jobs program.
The agency provided a $ 2.25 million forgivable loan and tax benefits to Elanco US Inc., a global animal health company in Fort Dodge, and $ 1 million in direct financial assistance and benefits. tax to Weiler Inc., a manufacturer of asphalt paving equipment, in Knoxville. Elanco plans to invest in machinery, equipment, research and development. Weiler plans to “improve the existing infrastructure” and “increase its current footprint with the construction of a plate processing facility, which is currently outsourced.” Combined, the two projects would create 127 jobs, the agency said in the statement.
The agency also provided $ 125,000 in forgivable loan and tax benefits to ALMACO to increase its precision agricultural machinery manufacturing resources and service team, creating 60 jobs, he said. Vermeer Corporation, a manufacturer of agricultural and industrial equipment, received tax benefits to support the creation of 75 eligible jobs. The company plans to build a new parts distribution facility at its Pella campus and to reassign a facility for product and field training. Pella Corporation, a window and door manufacturer, received a forgivable loan of $ 200,000 to create 120 jobs.
Two startups received loans from the $ 100,000 Demonstration Fund: Gain Compliance from Des Moines, a software platform for filing financial reports, and FarmPost Inc. from DeWitt, which developed a mobile application for managing financial reporting. agricultural labor, hiring and job search.
The Technology Commercialization Committee recommended to the Board of Directors to allocate the funds.
Center for Economic Accountability chairman John Mozena told The Center Square in an email that taxpayers bear the costs of funds and “virtually all” grants are a waste “because they rarely change what ‘a business was going to do it anyway.
“There is simply no evidence, either in research or in real world experience, that these agreements are anything but unnecessary and costly for companies that impose huge costs on communities,” said Mozena. “As researchers at the University of Iowa written a few years ago in the Journal of the American Planning AssociationThe best case is that the incentives work about 10% of the time, and the other 90% are just a waste of money. Unfortunately, as one of the authors once told me, we have no way of knowing in advance what the right 10% might be.
Companies will make decisions about where to locate and hire based on other factors, he said.
“[Companies] care about things like where their customers and competitors are, how much land costs, how much paperwork there is to do business somewhere, what labor and environmental laws look like, things like that ”, Mozena said. “These really important issues are almost never balanced enough for state tax relief to tip the scales one way or another.”
Granting job creation subsidies in an economy where companies struggle to find workers to fill vacancies “seems particularly deaf” and gives other companies “an artificial advantage,” he said. declared.
Politics are often involved, he added.
“Politicians love to show up at groundbreaking ceremonies and fundraising groundbreaking ceremonies to take credit for what the company has done,” said Mozena. “What they should do is come forward to apologize for the higher taxes for everyone and less money in the state budget at the end of the day to provide the kind of services basic audiences upon which every Iowan depends. “