But how much public gain will there be beyond the public investment?
Iowa Economic Development Director Debi Durham said that based on a cost-benefit analysis, she is satisfied the state incentives will be repaid in economic benefit. “We do a return-on-investment analysis” on every project, she told the Register, “and this one had a positive return. The downstream benefit will be huge.”
It will be some time before that return begins to flow to the state, given the size of its investment. As for the city, a child born in Altoona today would be a senior in college before the city reaps any property-tax benefit from the Facebook center.
The question is whether the state’s investment in these huge projects, including a similar project by Google in Council Bluffs and the Orascom fertilizer plant in Lee County, are the best strategy for attracting and growing companies that offer good wages and benefits.
Do enormously profitable companies like Facebook, Google and Microsoft really need government assistance financed by Iowa taxpayers? These tax incentives not only create a bidding war among states desperate for jobs but these incentives are now the minimum expectation.
Might the resources devoted to these big projects create more jobs, and long-term economic growth, if they were spread among smaller companies? Do these projects fit Iowa’s long-term goal of focusing on a few key areas, such as biotechnology and cutting-edge manufacturing that adds value to Iowa products?
The people of Iowa are being asked to spend substantial amounts of tax money on economic development incentives to businesses. That is money that cannot be spent on other things, including clean rivers and lakes, world-class schools, libraries and other public services that have direct economic impact by making Iowa an attractive destination for employers and employees.
Iowa has landed some big developments in recent years, but the state must demonstrate that the public investment in those projects will result in a greater public benefit.
— The Des Moines Register. April 28, 2013.