Mad about Iowa Republican Gov. Kim Reynold’s decision to waste money giving Apple a $20 million dollar tax break? You should be.
Iowa does not need to bribe large corporations to build big data centers here. We already have huge advantages that bring them here naturally. Electricity is their biggest ongoing cost and we have lots of low cost, reliable, renewable-produced electricity.
Iowa is also relatively free from earthquakes, has lots of water and our winters reduce the cost of cooling hot computer servers for half of the year.
In addition, there’s an Iowa sales tax exemption on the electricity consumed by data centers, a tax break worth tens of millions.
With all those built-in advantages, why did Facebook, Microsoft, Google and Apple gets tens of millions of Iowa tax dollars to do what they were going to do anyway?
The answer is the millions come from a broken state economic development program that is an open checkbook on auto pilot. The deceptively named “High Quality Jobs” program showers very large corporations with state tax dollars based on construction and building costs. The giveaways have more to do with fattening the bottom line than they do with the number of new jobs created.
Since 2011, the High Quality Jobs program has cost Iowa taxpayers more than $352 million in tax exemptions. For that enormous sum, we’ve gotten just 1,300 new jobs in return, at a cost of nearly $3 million dollars per job.
And, unlike helping families with nursing home costs or college tuition aid, these large corporations do not have to prove they need the money. Apple is worth $750 billion making it the richest corporation on the planet.
Iowa’s families are frugal and smart with their money. Gov. Reynold’s is wasting our money with another bad deal. This is not how Iowa families do their budgets and it should not be how Iowa does its budget.
Gov. Reynold’s budget crisis can’t be solved without dealing with the fastest growing part of state spending, tax giveaways. And we can't jumpstart our state's economy until we stand up to the powerful Des Moines special interests and direct more resources towards small towns and rural areas. Let’s start by shutting down the High Quality Jobs slush fund.