DES MOINES – Iowa already has landed $3.5 billion in capital investments for business projects under Gov. Terry Branstad and that total could grow by another $2 billion by year’s end, the state’s top economic development official said Tuesday.
“It could happen,” said Iowa Economic Development Authority Director Debi Durham. “There’s a potential to have another $2 billion announced by the end of the year. It’s large capital investments, big projects.”
Durham told the Iowa Partnership for Economic Progress Board that manufacturing is making a strong rebound “in a very big way,” which in turn will foster employment in supply-chain businesses that will feed those larger projects. She said 80 percent of the growth involves the expansions of existing Iowa companies and there have been gains in start-up activity as the state comes out of the recession.
“The question is have we created a culture that will sustain that long term? I think we’re on our way to doing that, but I don’t think we’re completely where we need to be,” Durham said. However, she said “some really good trends” have developed that give her reason to believe “clearly we are moving in the right direction.”
Since Branstad took office in January 2011, Iowa has seen more than $3.5 billion in capital investments with about 13,478 jobs attached to those projects, she said. While that’s a far cry from the governor’s goal of creating 200,000 private-sector jobs over five years, she said those projects have a significant multiplier effect in the marketplace which overtime will boost employment.
For instance, Durham said, the $1.4 billion fertilizer plant that Egyptian-owned conglomerate Orascom Construction Industries plans to build in Lee County comes with an estimated 165 plant jobs as well as some 2,500 construction jobs, but it also will bring a 4.5 multiplier effect for job growth for related industries and business activities. Also, while that represented the largest single capital investment in state history planned for a 500-acre site just east of Wever, it required nearly $240 million in state and local incentives that included more than $57 million in state tax credits and the promise to do $50 million more in the next two years.
Durham and Branstad said the high level of tax credits required to incentive major projects points up uncompetitive elements of Iowa’s tax system and the need to reduce and reform state corporate income taxes during the 2013 legislative session. Another priority is developing the skilled workforce needed to fill new and existing jobs around Iowa, where the statewide jobless rate stands at 5.2 percent but there are pockets of full employment where available jobs are going unfilled due to the lack of workers with the appropriate skills, she said.
During Tuesday’s board meeting, Branstad indicated that he will be making an economic mission to India next year, but he said the trip is in the early stages of planning an itinerary has not yet been developed.