Local officials, senators talk growth
A trio of state senators was asked Friday to preserve some tax breaks that local officials from the Fort Dodge area consider to be crucial for economic development.
A very specific plea for help came from Humboldt City Administrator Aaron Burnett, who said his community is facing the prospect of being removed from Iowa’s enterprise zone program. He said the enterprise zone program is a “very valuable tool for economic development.”
The lawmakers were also urged to find a way to provide more money for road construction and repair.
“It is not a secret that we are hurting in terms of funding our roads and bridges,” said Webster County Supervisor Bob Singer. “We frankly don’t care whether you take money out of the approximately $1 billion surplus or you do something ungodly like increasing the gas tax. We understand this is not a popular thing with some folks. Be that as it may, this would benefit all of Iowa, not just northwest Iowa.”
Singer and other local leaders addressed state senators Daryl Beall, D-Fort Dodge; Bill Dotzler, D-Waterloo; and Steve Sodders, D-State Center; during an economic development town hall meeting at the Iowa Central Community College East Campus.
The event was organized by Beall.
Beall invited Dotzler because he is the chairman of the House-Senate Joint Economic Development Budget Subcommittee. Sodders was invited because he is the chairman of the Senate Economic Growth Committee.
The legislators said they were there mostly to listen. But they offered some assurances that key incentives for economic growth will not be dismantled. They also said there may be an effort to raise the state’s gasoline tax during the upcoming legislative session.
“This has been really informative,” Beall said at the conclusion of the gathering.
Tax increment financing, commonly called TIF, occurs when increased property tax revenue from a designated area is set aside to be reinvested in that area. Local governments commonly use TIF to provide incentives and infrastructure improvements to lure new businesses or encourage the growth of existing ones.
TIF was used to foster the construction of a new truck stop along U.S. Highway 20 in Calhoun County, according to Pamela Anderson, executive director of the Calhoun County Economic Development Corp.
Anderson said TIF was “the only incentive that we could provide on a local level.”
“Keeping TIF is really important to our small communities,” she said.
Burnett also said TIF is one of the most powerful economic development tools.
“I can’t hammer that home enough,” he said.
Sodders said he doesn’t think there will be any adjustments to TIF emerging from next year’s legislative session.
“I don’t think we need to change it any more,” he said.
Dotzler said some perceived abuses of TIF in the Iowa City and Coralville area a couple years ago prompted lawmakers to look at the program.
“The truth of the matter is for the most part TIF is working well across Iowa,” he said.
He said there may be some minor changes to the program, but added “we will not decimate TIF.”
Humboldt and Fort Dodge are among the Iowa communities that use tax breaks provided by the enterpise zone system to support both industrial and housing development. Those tax breaks include income tax credits and a refund of sales taxes paid during construction.
Burnett said a proposal from the Iowa Economic Development Authority to be presented to the legislature next year would remove Humboldt from the program. He said he was told that change was being proposed because the city’s unemployment rate wasn’t high enough. According to Burnett, that unemployment rate is low because most of the people who couldn’t find a job left town.
”We are set to lose in this equation,” he told the senators.
Dotzler said using the unemployment rate isn’t the right way to determine a community’s eligibity for the enterprise zone.
Although Burnett said he was told the change is done deal, Dotzler assured him that lawmakers, not bureaucrats in the Economic Development Authority, will make the final decision.
Iowa’s 22 cents per gallon gasoline tax has been unchanged since 1989.
All three senators agreed more money is needed to maintain the state’s roads and complete U.S. Highway 20 as a four-lane route.
”Clearly, economic development focuses on transportation,”Dotzler said.
He added that he thinks there are enough votes in the Senate to pass a gasoline tax increase.
Beall said the gasoline tax is ”fairest and most efficient way” to pay for roads.
Friday’s gathering was co-sponsored by Iowa Central Community College, the Greater Fort Dodge Growth Alliance, the Mid Iowa Growth Partnership, Iowa State University Extension Service, MIDAS Council of Governments and the North Central Iowa Small Business Development Center.