A Democrat in the Iowa Senate is raising questions about the $110 million package of state incentives Governor Branstad promised an Egyptian company that plans to build a fertilizer plant in southeast Iowa. Senator Joe Bolkcom, a Democrat from Iowa City, says he doubts Iowa was ever in jeopardy of losing the deal to Illinois.
“Iowa always had an advantage of landing this plant because of the federal disaster area bonds that provided almost $300 million worth of incentives to this company to build in Iowa,” Bolkcom says, “incentives that were not available at either of the Illinois locations.”
Orascom Construction Industries plans to build a $1.4 billion facility in Lee County, near the town of Wever. Lee County officials offered the company a package of local incentives, too. Bolkcom says that means the company got just over half a billion dollars from state and local officials.
“It just seems very excessive,” Bolkcom says.
Bolkcom questions whether state officials did their “due dilligence” on this deal.
“More than $500 million of taxpayer-provided subsidies to this large, out-of-state corporation. We would have been much better off giving every commercial property taxpayer and Main Street businesses a tax cut this year,” Bolkcom says. “Unfortunately we weren’t able to get an agreement on that.”
Governor Branstad says nearly half of the incentives he promised Orascom for 2014 and 2015 would not be extended if legislators embraced his commercial property tax reform plan. If legislators don’t pass it in 2013 or 2014, Branstad has promised Orascom $50million in tax credits. The governor has defended the package of incentives offered to get the Egyptian company to commit to building its fertilizer plant in Iowa. He has characterized the competition with Illinois as tight, telling reporters earlier this month that Iowa had landed the deal “by the skin of our teeth.”
About 165 people will be employed at the Iowa Fertilizer Company plant when it’s up and running; more than two-thousand others will be employed to build the facility.
A spokesman for Branstad says Bolkcom “clearly does not understand the fundamentals of job creation.” Tim Albrecht (ALL-brehkt), the governor’s communications director, says Bolkcom’s “outright hostility to job creators” has blocked “meaningful property tax relief for Iowa’s businesses.”
Albrecht also said Branstad “will never apologize for fighting for every single job in this state, especially in southeast Iowa, which has some of the state’s highest unemployment rates.”
(This story was updated at 1:30 p.m. with additional information.)
