Republican gubernatorial candidate Jim Nussle has backed away from his pledge to get rid of the Iowa Values Fund which hands out $50 million a year in grants to expanding Iowa businesses or out-of-state companies that promise to build here.
Last October during an appearance before Iowans for Tax Relief, Nussle promised to dismantle the Values Fund if he’s elected — primarily because it does not benefit thousands of Iowa small business owners who are “very rarely on the receiving end of politicians handing out money.”
Nussle now says the Values fund was a “pretty good idea,” but should have been coupled with tax cuts and regulatory reform for businesses. “Having had an opportunity to review this, I don’t think the Values Fund in and of itself can succeed,” Nussle says.
Nussle promises to appoint a commission that will come up with a way to reduce the property taxes businesses pay as well as other changes, such as a reduction or elimination of the state’s corporate income tax. Nussle says without that tax relief and a reduction in government red tape, Iowa’s business climate cannot be stimulated by the Values Fund alone. “Iowa is trying to develop its economic development strategy with one arm tied behind its back and blindfolded, standing on one leg,” Nussle says.
“You do need the frosting…those incentives that are out there as part of the Values Fund, as part of all the different ways that we incentivize business, as we incentivize industry. That’s the frosting on the cake, but you need the cake, too,” Nussle says, describing the “cake” as Iowa’s tax and regulatory climate for businesses.
Both Nussle and his runningmate, Bob Vander Plaats, have said in the past that the Values Fund unfairly picks a few businesses for special government financial help. Now, Nussle says those multi-million dollar state Values Fund grants have done some good. “As I have observed and learned by talking to businesses, certainly there are some success stories with the Values Fund but it’s a strategy that can’t possibly work by itself,” Nussle says.
Nussle says Iowa’s business climate is nowhere near fifth best in the country as his Democratic opponent, Chet Culver, asserted in a debate with Nussle on Monday night. “I have no idea what he’s talking about. He claimed that was a statistic that came from the U.S. Chamber of Commerce. Either he’s smoking something or the U.S. Chamber is smoking something,” Nussle says. “…We are not fifth in the nation.”
The U.S. Chamber of Commerce has not issued a ranking of states based on business climate. Culver’s campaign says Culver mistakenly referred to a Chamber of Commerce state-by-state ranking which dealt with the legal liability climates in states. Iowa actually ranked fourth best, not fifth, in that list.
Nussle made his comments Tuesday afternoon during an appearance at the Iowa Association of Business and Industry’s convention in West Des Moines.