A Democratic candidate for governor says Iowa’s dead-last ranking among the states in small business development should be a wake-up call. State Representative Ed Fallon of Des Moines says the study by the National Policy Research Council shows the state’s current approach isn’t working. “I think this report is a very serious and critical indictment of the current practice that this state is using for economic development,” Fallon says. One of Fallon’s opponents was Governor Tom Vilsack’s top economic development official. Former Department of Economic Development director Michael Blouin administered the “Iowa Values Fund” which has handed out huge grants to new or expanding businesses. Fallon says it’s bee like “throwing money down a rat hole.” Fallon says the Values Fund, which was Governor Vilsack’s brainchild, wasn’t a new approach, but a “continuation and expansion” of a failed, old approach. Fallon says it hasn’t produced “tangible results.” He calls the big state grants to businesses promising new jobs “corporate welfare.” Fallon says if he’s elected, he’d junk the Values Fund and spend that money on education and health care instead. As for economic development policy, Fallon would promote the “Main Street” program which links state funds with federal money to encourage improvements in small-town infrastructure. Fallon says the program’s effective because it leverages local, private investment to improve infrastructure, like buildings, roads, sewers. Even if the business that may locate in the town leaves, Fallon says the town’s leaders lure another business in its place by touting the improvements that’ve been made. Governor Vilsack and Fallon’s opponent Blouin say the Values Fund has led to the creation of hundreds of jobs and made Iowa more attractive to businesses which might not have considered Iowa as a place to expand. The National Policy Research Council study Fallon cites ranked Iowa last in the percentage of businesses that employ five or more employees and last in the percentage of small businesses that have experienced rapid growth in the last five years.
