By Dean Lerner
Anyone who thought that Gov. Terry Branstad couldn’t get more generous doling out tax incentives to already wealthy corporations than his recent Egyptian Orascom fertilizer plant deal in southeast Iowa need only read about his latest corporate giveaway: the expansion of an existing Sioux City fertilizer plant. Known as “Project X,” the $1.7 billion fertilizer plant expansion will be the state’s largest single capital investment.
Under the guise of “job creation,” the governor once again will trade tax revenue, to the tune of hundreds of millions of dollars, for the promise of jobs. No matter the actual cost of each of these promised jobs, measured in lost tax revenue, adverse environmental impact, etc., a job is a job. Just as Branstad’s last time living at Terrace Hill, this time he has promised us 200,000 new jobs, along with a promise of a 25 percent increase in average family income. By golly, it’s time to put up, or shut up, no matter the consequence. It’s all a part of our governor’s promised grand scheme. A careful reader will notice the use of the word “promise” when it comes to these corporate and political commitments. You know, “just trust me on this one.” But, there’s more — if Branstad gets his myopic tax rate reduction, his new best corporate friends will generously reduce or forego their requests for additional tax credits “proportionally with improvements in Iowa’s corporate tax rates.” It’s a win-win situation for the governor, suffering job-promise anemia, and a win-win situation for corporations, barely hanging on.
So, next legislative session, expect to hear the governor explaining to legislators that if they’d just finally capitulate to his drumbeat demands to reduce Iowa’s corporate tax rate, Project X and Egyptian Orascom will sacrifice by giving back a pittance of what Branstad has already given them.
We can only hope that legislators will respond by, once again, informing the governor that Iowa taxation of corporations is already low, and that he should first bring them a plan to feed Iowa’s hungry children, a commitment to health insurance for every Iowan, a solution to the corporate ravage of our environment, and legislation addressing campaign finance reform.
Dean Lerner of Des Moines served as deputy director of the Iowa Department of Inspections and Appeals from 2002 to 2007 and as DIA director from 2007 until 2012, when Gov. Terry
Branstad replaced him.