ECONOMIC DEVELOPMENT IDEAS AND MEA CULPA...

Yesterday, Former Governor Terry Branstad rolled out an ambitious plan to scrap the current Iowa Department of Economic Development and convert the agency to public/private partnership that will be named the Iowa Partnership for Economic Progress. The new partnership would be led by a Board of Directors. The Board of Directors would be chaired by the Lieutenant Governor under Branstad’s plan. If this plan has the “right” business model it could put Iowa in a position to more quickly compete for economic development projects, especially in a globalized economy.

See Des Moines Register article here

http://tinyurl.com/2a8lggt



Also see what other states have done in this area…

Sampling of public-private programs
The Iowa Taxpayers Association outlined these examples of quasi-government economic development private partnerships. The association is a nonpartisan research group representing more than 150 businesses.

INDIANA ECONOMIC DEVELOPMENT CORP.
It is Indiana’s lead economic development agency, established in February 2005 to replace the former Department of Commerce. The intention is for the corporation to operate like a business to respond quickly to the needs of businesses.

It is organized as a public-private partnership and is led by Indiana Secretary of Commerce and Indiana Economic Development Corp. CEO E. Mitchell Roob Jr. The partnership is governed by a 12-member board of directors chaired by Gov. Mitch Daniels. Membership reflects the geographic and economic diversity of Indiana. The organization focuses its efforts on expanding and retaining businesses in Indiana and attracting new business to the state.

OHIO THIRD FRONTIER
The nine-member Ohio Third Frontier comprises a commission of three state officials and six regional representatives appointed by the governor. The commission is responsible for allocating funds appropriated by the Ohio General Assembly.

There is also a 16-member Ohio Third Frontier Advisory Board that provides guidance to the commission. Members of the board represent industry, academia and government, and they advise on strategic planning, general management and coordination of Ohio Third Frontier programs.

RHODE ISLAND ECONOMIC DEVELOPMENT CORP.
The corporation is the full-service, official economic development organization for the state. A quasi-public agency, the corporation serves as a government and community resource to help streamline business expansion in, and relocation to, Rhode Island. The agency assists companies with commercial real estate, business financing, work-force training and other issues.

VIRGINIA ECONOMIC DEVELOPMENT PARTNERSHIP
The Virginia General Assembly created the partnership in 1995 to better serve those seeking a prime business location and increased trade opportunities, fostering increased expansion of the commonwealth’s economy. As a state authority, the partnership is governed by a 21-member board of directors, made up of business people from around Virginia. Each is appointed by the governor and the General Assembly.

WYOMING BUSINESS COUNCIL
Creation of the council in 1998 dramatically changed Wyoming’s approach to economic development. Unlike the state’s previous economic development efforts, this organization has more of a corporate structure, incorporates private business practices to drive programs and has instituted regional offices throughout the state.

The state created the council to focus public and private efforts to build a strong job creation base with manufacturing and technology as core competencies, while strengthening existing business and industry groups under energy, agriculture, tourism and travel. The Business Council is part of state government, but its structure resembles a corporation, with a CEO and a board of directors. Each member of the board is a business owner from Wyoming.





This week has been interesting as the State Fair is in full swing here in Des Moines and the two gubernatorial hopefuls find themselves showcased.


Last week Former Governor Branstad visited The Des Moines Register Soapbox and on Monday Governor Culver visited the soapbox and gave a mea culpa on “mistakes” he has made while in office. Governor Culver specifically mentioned his lack of attention to scandals in the Iowa Film Office and the Alcoholic Beverages Division. Culver mentioned that he has “learned” from his mistakes.

See Kathie Obradovich’s blog post from the Des Moines Register

http://tinyurl.com/2ax2czq


ITA appreciates Governor Culver mentioning the detrimental affect that the Film Tax Credit Scandal had on overall economic development (and further categorizing it as a “mistake” to be learned from). However, we strongly believe that putting a strong emphasis on a budget blue print for the legislature to follow is important. For FY 2011, the ITA Committee on Accountable Government released its finding suggesting that the legislature work on its own because of an overreliance on an out of state consultant’s recommendations that provided undeterminable cost savings. See report below.

http://tinyurl.com/2ecfab6

There is no question that the 84th General Assembly (which meets in January of 2011) must work through some challenging budget scenarios. It is most important that the Executive Branch and Legislative Branch work together with all statewide stakeholders to ensure that Iowa’s priorities are being met while also streamlining the delivery of services by state government.

Worth Noting …

A provision within President Obama’s 2011 proposed budget has drawn considerable concern from economists and business leaders from across the country. The provision calls for eliminating the tax credit that U.S. oil and natural gas companies (that do business overseas) receive from the federal government. This tax credit is most commonly referred to as the “dual capacity tax credit”.

It is noteworthy that foreign countries in which a U.S. company operates, already tax the company on any income earned while operating in their country. The tax credit provided to U.S. companies operating in a foreign country is intended to ensure American companies are not taxed twice on the same foreign income. If the provision were to go into effect, the U.S. government would be placing our own domestic oil and natural gas companies at a tremendous competitive disadvantage to foreign energy companies, who of course, are only taxed once.

Not only is this provision damaging to the business structure of American oil and natural gas companies, but it could cause a ripple effect across our entire economy. If the dual capacity tax credit is removed, it would obviously increase the cost of energy for American consumers and businesses. At a time of such great economic uncertainty, the last thing the U.S. should do is implement a policy that will further increase costs on businesses.

ITA Interview on WHO Radio on Accountable Government

Recently, I was interviewed by Jan Mickelson of WHO Radio regarding the state of Iowa budget and the ITA Committee on Accountable Government Report.

Click here for the audio recording of the interview.

DesMoinesRegister.com - Guest Column

Have Great Expectations - A Governor Can Create Jobs

Click here to see my guest column on DesMoinesRegister.com

Iowa Taxpayers Association Completes Review of Final State Budget

An ITA examination confirms that the overreliance of one-time funding for on-going expenses and a deepening burden for property taxpayers provides significant challenges for the current fiscal year and specifically the 84th General Assembly.

See press release.

Revenue Director Mark Schuling to Head FTA

Iowa Department of Revenue Director Mark Schuling is set to become the President of The Federation of Tax Administrators (FTA) in the next few weeks. On Tuesday, June 15, the newly elected President, West Virginia Tax Commissioner, died suddenly. Because Director Schuling was recently elected First Vice President he will now go before the organization at a Board of Directors meeting next week to be voted President. FTA is an organization comprised of all of the state tax commissioners.

The Federation of Tax Administrators (FTA) was organized in 1937 to improve the quality of state tax administration by providing services to state tax authroities and administrators. These services include research and information exchange, training, and intergovernmental and interstate coordination. The Federation also represents the interests of state tax administration before federal policymakers where appropriate.

ITA's Priority for 2009-2010

Over the years, the nonpartisan Iowa Taxpayers Association has developed a set of basic beliefs when it comes to implementing and sustaining successful tax policy. Taxes are a very important part of the economic development equation as they contribute significantly to the relative attractiveness of our business climate. Tax policy should provide stability and predictablity that creates a climate of consistency in which business leaders are more assured in making long-term business decisions.

ITA represents a broad spectrum of business taxpayers in Iowa - small and large companies, manufacturers, multi-national corporations, C-corporations, Sub-S corporations, accounting and law firms, and other professional associations. Our members, representing these various backgrounds, work together with the goal of making Iowa a positive, competitive environment in which to do business.

The Iowa Taxpayers Association is proud to remain Iowa's leading business tax policy resource and will continue to fulfill its mission to educate and inform Iowans and policymakers on tax and spending policies in 2009 and beyond.