The C.E.O. of a Des Moines-based company that has manufacturing plants in seven other countries says if legislators choose to curtail the state’s tax credit for research activities, the state will lose jobs.
Kemin Industries makes vitamins and food additives at plants in Belgium, Brazil, China, India, Singapore, South Africa, Thailand and the United States. Chris Nelson, Kemin’s C.E.O., says it costs nearly three times as much to hire a scientist to work in Des Moines, but the state’s research activites tax credit helps offset that.
“So that regardless that we pay a much higher salary to somebody here in Iowa we can still be very competitive with what’s happening in a research lab outside of Shanghai or one outside of Deli, India,” Nelson says. “And that, I think, is truly one of the core issues the legislature has to come to grips with as they look at this issue.”
Nelson estimates for every dollar Kemin receives from the state tax credit, they spend five to ten dollars on an employee’s salary.
“We think it’s a very, very good investment, overall, for the state,” Nelson says.
But others are calling for the research activities tax credit to be scaled back. Peter Fisher, an economist with the Iowa Policy Project, says it’s shifting money away from schools and universities.
“When we’re in a recession, we do need to make certain we’re not cutting our nose to spite our face, that we’re not underfunding governmental functions that are going to be the lifeblood of this economy in this state and an educated workforce is probably number one,” Fisher says.
Fisher and Nelson made their comments Monday on the Iowa Public Radio program “The Exchange.”