An alert reader asked me recently to check in on Gov. Terry Branstad’s jobs promise.
You may recall that, as a candidate for governor in 2010, Branstad vowed to create 200,000 jobs over five years. We’re now just past the halfway point.
Through July, according to Iowa Workforce Development, Iowa has seen a net new jobs gain of 59,600 since January of 2011, when the governor took office. The state would have to net just more than 4,800 new jobs per month for the next 29 months to hit 200,000. Although the state has seen 5,000-plus jobs added in each of the last three months, which is great, it’s unlikely that pace will continue for nearly 2 1/2 more years.
“As he believes in pay for performance, I believe we should cut his salary accordingly,” my reader contends. Tying politicians’ pay to promises kept? Interesting idea. I hate to see the poor dears thrown out on the street, forced to take shrimp and scotch from lobbyists.
But Iowa’s economic performance during Branstad’s latest tenure has been pretty good. That 59,600 net jobs gain represents a 4 percent increase. Contrast that with the final three years of Chet Culver’s administration, when the state lost a net 49,900 jobs. To be fair, the turnaround did start during Culver’s final year in 2010, when the state added a net 12,200 jobs.
Since January 2011, gains have been made almost across the board. There are 11,600 more manufacturing jobs and more than 10,000 new jobs each in the trade and transportation and professional and business services sectors.
Heck, even state government has added 2,000 jobs since January 2011.
How much credit should government get for this growth? I’m betting its inversely proportional to the credit government will take.
So the numbers are good. But the governor had to go and make a big gaudy promise. Now his staff will have to feverishly spin and contort themselves into pretzels to square a campaign fantasy with reality. They’ve already come up with a different set of numbers, even though net new jobs is how everyone in the free world measures this stuff. Branstad’s economic development chief, Debi Durham, told the Des Moines Register last month that the 200,000 jobs goal likely is not doable because the state’s population isn’t growing fast enough. Perhaps, but that was true when her boss made his big promise.
Mike Owen, executive director of the Iowa Policy Project, suggests that a better, less arbitrary jobs goal would be creating enough jobs to both replace those lost during the recession and to keep up with population growth. By that measure, Iowa is 51,900 jobs short, much closer than 141,400 gap between current reality and the governor’s goal.
THE JOBS CHASE
My problem with all this isn’t that Branstad won’t meet his goal. I’ve seen plenty of lofty gubernatorial jobs vows fall flat. We’ve been the Food Capital of the World and the Silicon Valley of the Midwest and now maybe the Global Epicenter of Fertilizer, or whatever. Hyperbole in the realm of economic development is no vice. It’s a hallowed Iowa tradition.
My problem is with the reasons why these promises get made in the first place. And it’s basically because governors of all stripes love the jobs chase, think they need the jobs chase. They like to schmooze with corporate titans and seal big deals and jet around on trade missions. They like to hand out fat incentives and cut thin ribbons with big scissors. Short of getting elected or getting indicted, nothing makes a bigger media splash than the four-alarm, billion-dollar job creation announcement.
Branstad has said some really smart things about how it would be better to improve the business climate in Iowa for everyone rather than chase smokestacks with credits and incentives. He signed a large, bipartisan property tax cut that, for all its flaws, will benefit a broad cross-section of firms. He proposed slicing corporate income tax rates. an idea with merit. Although coupling it with a big tax increase for casinos swiftly made it legislative kryptonite.
And yet, the governor has talked big picture without proposing any action to curtail the individual giveaways and credits and loopholes and special tax exemptions that make Iowa’s business tax structure complicated and opaque and unseemly. A better climate would be better, he says, but in the meantime, we’ll hand out nearly $300 million in tax credits and direct incentives.
Branstad’s dream is 200,000 jobs. Mine is the day when we have an economic development approach that emphasizes what we value in Iowa — education, quality of life and natural resources — over the value of all the goodies we can hand out. Tax cuts and reforms are on the table, clearly, but the machete also has to fall on some credits, loopholes and giveaways. Creating a fairer, more transparent system would make Iowa more competitive, but it would take sacrifices on both sides of the aisle.
These would be difficult debates, but not impossible. It would be great if the campaign for governor actually set the stage for change. At the very least, our governors should spend at least as much time listening to Iowans’ ideas for developing an economy as they do listening to executives make demands for state assistance. And I don’t mean just listening to supporters and campaign contributors.
Unfortunately, both parties like the chase way too much to back away. We can’t disarm, they’ll say. It would be madness. So we’ll get the same old promises.