Millions in business aid at risk, IDED officials say
The battle over the state budget has economic development leaders worried that lawmakers will fail to honor nearly $23 million in awards that include major projects in Cedar Rapids, Ames, Fort Dodge and Osage.
Members of the Iowa Economic Development Board said Thursday an omnibus budget bill the House approved includes language that would take "unencumbered" Grow Iowa Values Fund money from the agency — $22.7 million already awarded to businesses, plus $11 million to $12 million that could be carried forward into the next fiscal year.
That move could jeopardize projects such as Genencor's $67 million expansion in Cedar Rapids, Valent BioSciences' $141 million project in Osage and Cargill's $134 million project in Fort Dodge, officials say.
Tim Albrecht, spokesman for Gov. Terry Branstad, said leaders are aware of economic development leaders' concerns. But he declined to offer assurances, adding that no final decision has been made about the money with budget negotiations under way.
Josie Albrecht, spokeswoman for Iowa House Republicans, said leaders are working to ensure that none of the project awards are rescinded.
The omnibus budget bill passed by the Republican-led House would eliminate the Grow Iowa Values Fund, created under former Gov. Tom Vilsack, a Democrat. The money would return to the state's general fund.
"While the governor is busy touting awards to help create 263 jobs today, using job creation initiatives approved under previous administrations, he should be talking to House Republicans about their terrible budget plans to end the state's job creation efforts next year," said Rep. Roger Thomas, D-Elkader, who sits on the House economic development committee.
Bob Riley, a board member, said it's unlikely the projects would move forward without the incentives. He said he's concerned lawmakers will "pull the rug out from under us."
Board attorney Craig Block said the agency may need an attorney general's opinion about whether incentives approved for companies — but with no formal contract yet in place — are considered encumbered dollars.
The economic development board plans to meet in July in Lake Okoboji, an annual gathering.
The omnibus bill includes language that would create a new economic development agency, but it's unlikely the proposed authority's board would be operational by next month, leaders say.