Iowa Public Television

 

Michael Blouin, Director of the Iowa Department of Economic Development

posted on January 31, 2005

Yepsen: ECONOMIC DEVELOPMENT REMAINS A MAJOR ISSUE AT THE IOWA STATEHOUSE. HOW TO GROW IOWA IS THE PRIORITY ON THE TABLE FOR MICHAEL BLOUIN, DIRECTOR OF THE IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT, ON THIS EDITION OF "IOWA PRESS."


FUNDING FOR THIS PROGRAM WAS PROVIDED BY "FRIENDS," THE IOWA PUBLIC TELEVISION FOUNDATION; BY THE IOWA BANKERS ASSOCIATION… FOR PERSONAL, BUSINESS, AND COMMERCIAL NEEDS, IOWA BANKS HELP IOWANS REACH THEIR FINANCIAL GOALS; BY THE ASSOCIATED GENERAL CONTRACTORS OF IOWA, THE PUBLIC'S PARTNER IN BUILDING IOWA'S HIGHWAY, BRIDGE, AND MUNICIPAL UTILITY INFRASTRUCTURE; AND BY CAPITOL RESOURCES, INC., LOCATED IN BROOKLYN, IOWA; AND BY NICOLE SCHLINGER AND ERIC LANGE INDIVIDUALLY, FUND-RAISING AND COMMUNICATION SERVICES FOR MAJOR CAMPAIGNS SINCE 1996.

ON STATEWIDE IOWA PUBLIC TELEVISION, THIS IS THE FRIDAY, JANUARY 28 EDITION OF "IOWA PRESS." HERE IS DAVID YEPSEN.

Yepsen: IN IOWA STATEHOUSE CIRCLES, JUST ABOUT EVERYONE HAS A WAY TO STABILIZE IOWA'S POPULATION, IMPROVE THE QUALITY OF LIFE, AND REINVIGORATE AN ECONOMY THAT HAS TAKEN ITS SHARE OF HITS IN RECENT YEARS. IT'S CALLED ECONOMIC DEVELOPMENT, AND THE GOVERNOR AND STATE LEGISLATORS ARE TRYING TO REACH AGREEMENT ON JUST WHAT TO DO. EARLIER THIS WEEK SENATE REPUBLICANS UNVEILED A BROAD-BASED PROPOSAL THAT INCLUDES: NO STATE INCOME TAX FOR WORKERS UNDER AGE THIRTY; AN INCREASE IN THE COMMUNITY ATTRACTION AND TOURISM FUND, OR CAT GRANTS, FROM $12 MILLION TO $25 MILLION; AND TAX CREDITS FOR BUSINESSES THAT PROVIDE JOBS PAYING $10 AN HOUR OR MORE; AND THE GOVERNOR WANTS TO RETOOL THE IOWA VALUES FUND. ALL OF WHICH IS ON THE PLATE FOR MICHAEL BLOUIN, THE GOVERNOR'S POINT MAN ON GROWTH ISSUES AND THE DIRECTOR OF THE IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT. MR. BLOUIN, WELCOME BACK TO "IOWA PRESS." GOOD TO HAVE YOU WITH US.

Blouin: GOOD TO BE HERE, DAVID. THANK YOU.

Yepsen: ALSO WITH US AT THE "IOWA PRESS" TABLE ARE KAY HENDERSON, NEWS DIRECTOR WITH "RADIO IOWA," AND MIKE GLOVER, SENIOR LEGISLATIVE AND POLITICAL REPORTER WITH THE "ASSOCIATED PRESS."

Glover: MR. BLOUIN, JUST THIS WEEK, SOME NUMBERS SURFACED, WHICH SUGGESTED THAT ON SOME OF THESE BIG ECONOMIC DEVELOPMENT PROJECTS, THE STATE COULD ACTUALLY BE LOSING MONEY. WHAT'S YOUR RESPONSE TO THAT?

Blouin: 227 COMPANIES HAVE BEEN HELPED IN THE LAST 19 MONTHS IN 69 COUNTIES, CREATING 15,000 JOBS, AVERAGING $37,500 A YEAR INCOME, AND GENERATING $2.3 BILLION OF CAPITAL INVESTMENT. NOT EVERY PROJECT IS GOING TO PERFORM AS WELL AS THE OTHERS, BUT THEY ALL LOOK REAL GOOD RIGHT NOW. WE'VE NEVER HAD NUMBERS LIKE THAT, AND I'M VERY PROUD OF THEM.

Glover: WHAT KIND OF A POLITICAL PROBLEM IS THAT CAUSING YOU? I MEAN, YOU'VE GOT TO CONVINCE AN IOWA LEGISLATURE TO REINVENT THE IOWA VALUES FUND. THERE'S A LOT OF RESISTANCE UP THERE TO THAT. WHAT DOES THIS KIND OF A REPORT DO TO YOU?

Blouin: WELL, I'VE NOT SEEN A REPORT. AND TO MY KNOWLEDGE THERE ISN'T ANY FORMAL REPORT. ALL I KNOW IS THE DATA THAT WE HAVE THAT WAS MADE PUBLIC WHEN THE PROJECTS WERE APPROVED AND IN AUGUST OF '03, THERE WERE STORIES WRITTEN ABOUT IT THEN. THERE WERE STORIES WRITTEN ABOUT IT ABOUT A YEAR LATER, SO THIS IS THE THIRD TIME WITH THE SAME DATA. THE PROJECTS ARE STILL SOUND. THE COMPANIES ARE STILL PROGRESSING. THEY'RE HIRING PEOPLE, THEY'RE MAKING INVESTMENTS, AND THEY'RE MOVING ALONG ON THE CONTRACTED AGREEMENTS. I DON'T THINK IT HURTS A BIT.

Glover: BUT SHOULD IT BE THE POLICY OF THE STATE TO TRY TO MAKE MONEY ON THIS, OR SHOULD IT BE THE STATE CAN JUST SPEND SOME MONEY TO CREATE SOME JOBS?

Blouin: I THINK IT'S GOT TO BE A MIXTURE. I THINK IF WE'RE GOING TO STEP INTO SOMETHING THAT DOESN'T HAVE A RETURN, WE OUGHT TO AT LEAST KNOW IT, THE WHOLE PUBLIC SIDE OF THE STATE. ALL THREE MILLION OF US OUGHT TO AT LEAST KNOW IT. SOMETIMES YOU REACH OUT IN AN EFFORT TO GROW A NEW SECTOR OF THE ECONOMY. WE'RE TRYING TO CREATE BIOTECHNOLOGY OUT OF AGRICULTURE. WE'RE TRYING TO ADD VALUE, LAYERS VERTICALLY AND HORIZONTALLY. WE'RE TRYING TO DO MORE THAN JUST CREATE ETHANOL, AS AN EXAMPLE, BECAUSE IF THAT'S ALL WE DO, WE'VE JUST CREATED ANOTHER COMMODITY, ABOUT 12 CENTS OF VALUE PER BUSHEL MORE THAN RAW CORN. WE NEED TO TAKE THE BY-PRODUCTS AND MULTIPLY THEM. WE NEED TO DO THE SAME THING ON THE ANIMAL SIDE OF THE EQUATION. AND SOMETIMES YOU HAVE TO RISK TO MAKE THAT HAPPEN BECAUSE OF THE POTENTIAL MASSIVE BENEFIT TO THE ENTIRE STATE. MORE TIMES IT'S A CONVENTIONAL APPROACH WHERE YOU CAN VERY EASILY SCALE COST VERSUS BENEFIT. AND ON THOSE PROJECTS, THERE OUGHT TO BE A PAYBACK TO THIS STATE.

Henderson: THE LAST TIME YOU WERE ON THIS PROGRAM, YOU SAID YOU WOULD NOT RUN FOR GOVERNOR IF LIEUTENANT GOVERNOR SALLY PEDERSON, WHO IS ONE OF YOUR BOSSES, WERE TO RUN FOR GOVERNOR. SHE ANNOUNCED IN NOVEMBER THAT SHE IS NOT GOING TO RUN FOR GOVERNOR. ARE YOU NOW GOING TO --

Blouin: WE'RE FIVE MINUTES INTO THE THE PROGRAM, AND THE LAST QUESTION COMES UP THIS EARLY. [ LAUGHTER ]

Yepsen: WE WANTED TO GIVE YOU TIME TO ANSWER IT.

Blouin: I DON'T KNOW. MY CONCENTRATION AND MY FOCUS RIGHT NOW IS ON TRYING TO GET THE VALUES FUND REENACTED. IT HAS DONE SO MUCH GOOD IN SUCH A SHORT PERIOD OF TIME THAT IT WOULD BE FOOLHARDY TO LET ANYTHING GET IN THE WAY OF THAT. SO I'M DEFERRING ANY KIND OF A DECISION OR EVEN A MAJOR THOUGHT PROCESS UNTIL THIS SUMMER. I'M FLATTERED BY IT, KAY. I REALLY AM. BUT IT HAS BEEN SINCE THE '70S, AND TO THINK THAT PEOPLE CONSIDER THIS A SERIOUS POINT FOR CONVERSATION IS VERY FLATTERING. BUT AT THIS STAGE, I REALLY NEED TO CONCENTRATE ON WHAT I WAS HIRED TO DO.

Yepsen: BUT YOU'RE STILL THINKING ABOUT IT?

Blouin: WELL, YOU KNOW, YEAH, I'M THINKING ABOUT IT A LITTLE BIT, BUT I'M NOT THINKING ABOUT IT AS A WAY OF LIFE RIGHT NOW.

Yepsen: AND SO THEN AFTER THE LEGISLATURE IS ADJOURNED, THEN YOU THINK ABOUT IT MORE SERIOUSLY.

Blouin: I WANT TO SEE WHAT THE VALUES FUND LOOKS LIKE. I WANT TO SEE WHAT KIND OF REQUIREMENTS THERE ARE, WHETHER WE CAN DO SOMETHING WITH IT.

Henderson: SO YOUR POLITICAL FUTURE HINGES ON THE SUCCESS OR FAILURE OF THIS VALUES FUND?

Blouin: NO. RIGHT NOW MY LIFE HINGES ON THE SUCCESS OR VALUE OF THE FUND, AND THE POLITICAL FUTURE IS SECONDARY. I DIDN'T GET INTO THIS FOR A POLITICAL FUTURE. I GOT INTO IT BECAUSE THE GOVERNOR ASKED ME TO SPEND A FEW YEARS TRYING TO HELP TURN THE ECONOMY AROUND IN IOWA, AND THAT'S REALLY WHERE I'M FOCUSED RIGHT NOW.

Henderson: SO WHAT ARE THE PROS AND CONS THAT ARE WEIGHING ON YOUR MIND?

Blouin: YOU KNOW, I REALLY HAVEN'T GOTTEN TO THE POINT OF PROS AND CONS YET, TO BE HONEST ABOUT IT. WE'RE FLUSHING IT OUT. YOU FIRST HAVE TO DECIDE: DO YOU WANT TO DO THIS TO YOUR LIFE; DO YOU WANT TO DISRUPT YOURSELF THIS MUCH; DO YOU WANT TO CHANGE GEARS IN TERMS OF WHAT YOU WANTED TO DO WITH YOUR LIFE AT THIS STAGE AND MOVE IN A DIFFERENT DIRECTION; WHAT DOES IT DO TO YOUR ABILITY TO MOVE INTO CERTAIN SEGMENTS OF ACTIVITIES THAT NOW WOULD HAVE TO TAKE A BACK SEAT; WHAT DOES IT DO IN TERMS OF BOTH SUZANNE AND I? THIS ISN'T MY DECISION. OTHERS ARE AFFECTED BY THIS. I MEAN THE FINANCES OF IT, THE PERSONAL TOLL, YOU'VE GOT TO LOOK AT ALL OF THAT. AND THAT TAKES A TREMENDOUS AMOUNT OF TIME, AND I DON'T HAVE TIME TO DO THAT RIGHT NOW.

Glover: AREN'T YOU CREATING SOMETHING OF A PROBLEM FOR YOURSELF BY EVEN HOLDING THIS OUT? I MEAN YOU'VE GOT TO DEAL WITH A LEGISLATURE WHERE REPUBLICANS CONTROL ONE HOUSE AND THE OTHER CHAMBER IS TIED. AND IF A REPUBLICAN LEGISLATIVE LEADER LOOKS AT YOU AS A POTENTIAL CANDIDATE FOR GOVERNOR, IT'S GOING TO MAKE LIFE VERY DIFFICULT FOR YOU.

Blouin: MIKE, THEY ALREADY ARE, AS YOU KNOW. AND THERE ARE PEOPLE WHO MAKE DECISIONS ON THE BASIS OF THAT, AND I CAN'T HELP THAT. I WOULD HOPE THAT AT LEAST A MAJORITY IN BOTH HOUSES WOULD LOOK AT THE RECORD OF WHAT'S HAPPENED AND TAKE PRIDE IN WHAT THEY COLLECTIVELY CREATED -- BOTH PARTIES, BOTH HOUSES, BOTH BRANCHES OF GOVERNMENT -- THAN SPEND TIME ARGUING OVER WHO GETS CREDIT FOR IT AS OPPOSED TO FINDING A WAY TO SABOTAGE IT. IN THAT KIND OF AN ATMOSPHERE, THINGS GET DONE. AND THAT'S REALLY WHAT I'M ALL ABOUT RIGHT NOW, TRYING TO GET SOME THINGS DONE. I CAN'T CONTROL WHAT GOES THROUGH OTHERS' MINDS.

Yepsen: LET'S GO BACK TO THE ECONOMIC GROWTH ISSUES AT THE STATEHOUSE.

Blouin: THANK YOU.

Yepsen: REPUBLICANS IN THE SENATE CAME WITH THE IDEA LAST WEEK OF NOT HAVING PEOPLE UNDER THIRTY PAY INCOME TAXES. WHAT'S YOUR REACTION TO THAT IDEA? WILL IT WORK? IS IT A GOOD ONE?

Blouin: IT'S AN IDEA THAT HASN'T COME UP BEFORE. IT'S ONE WORTH DISCUSSING IN CONTEXT WITH ALL OF THE OTHER PROPOSALS THAT ARE ON THE TABLE. THE GOOD PART IS WE NOW HAVE THE FOURTH GROUP IN THE LEGISLATURE CHECKING IN WITH AN APPROACH. WE'VE HAD THE SENATE DEMOCRATS. WE NOW HAVE THE SENATE REPUBLICANS. WE'VE HAD THE HOUSE DEMOCRATS AND THE HOUSE REPUBLICANS. NEXT WEEK WE GET THE GOVERNOR'S BUDGET PROPOSAL. AND NOW THAT ALL FIVE OF THOSE APPROACHES ARE ON THE TABLE, WE'VE GOT TO LOOK AT EVERY OPTION. AND I'M DELIGHTED THAT PEOPLE ARE BEING CREATIVE.

Yepsen: I UNDERSTAND HOW YOU DON'T WANT TO ALIENATE SENATE REPUBLICANS, BUT A LOT OF PEOPLE ARE SAYING THIS IS JUST NUTTY. HAVE YOU EVER HEARD A 20-SOMETHING SAY, "I'M LEAVING IOWA BECAUSE I DON'T LIKE THE STATE INCOME TAXES"?

Blouin: WELL, I CAN TELL YOU THIS, MOST YOUNG PEOPLE MOVE FROM IOWA TO LARGE CITIES, AND THEIR CAR INSURANCE ALONE WILL DOUBLE OR TRIPLE AND MORE THAN EAT UP ANY KIND OF A TAX DIFFERENTIAL. NEW YORK CITY ALONE, THEY'LL SPEND SEVERAL HUNDRED DOLLARS A MONTH ON A GARAGE.

Yepsen: BUT YOUNG PEOPLE DON'T THINK THAT WAY. THEY DON'T THINK THAT WAY; DO THEY?

Blouin: THEY WANT PLACES THAT ARE FUN. THEY WANT TO LIVE IN COMMUNITIES THAT HAVE SOME VISION TO THEM, SOME EXCITEMENT, SOME AMENITIES, SOME DIVERSITY, SOME HOPE FOR THE FUTURE WHERE PEOPLE ARE MAKING COMMITMENTS TO OPEN UP THEIR TOWNS AND BRING THEM ALIVE AGAIN. AND THAT'S WHAT WE'VE BEEN DOING WITH VISION IOWA AND CAT.

Yepsen: AND AREN'T THEY ALSO LOOKING FOR A GOOD JOB?

Blouin: BEYOND IT ALL THEY HAVE SPENT YEARS IN SCHOOL -- COLLEGE, POST GRAD WORK, WHATEVER IT MIGHT BE -- TO GET THE TOOLS TO PURSUE A PROFESSION. WE HAVE TO CREATE PROFESSIONS FOR THEM HERE IN THESE COMMUNITIES THAT ARE COMING AWAKE AGAIN, AND THAT'S WHAT THE VALUES FUND IS ALL ABOUT. THAT, TO ME, IS FAR MORE IMPORTANT. I HEAR IT HUNDREDS OF TIMES FROM FORMER IOWANS WHO WOULD LOVE TO COME BACK: SHOW US THE PROFESSIONS THAT WE CAN MOVE BACK AND NOT LOSE THE CONTINUITY OF WHAT WE'RE TRYING TO DIRECT OUR LIVES INTO.

Glover: SO YOUR ANSWER TO DAVE'S QUESTION IS IT IS A TRULY GOOFY IDEA.

Blouin: I'M NOT GOING TO SAY THAT. I THINK ALL IDEAS ARE WORTH DISCUSSING. I'M NOT A LEGISLATOR, BUT IF I WERE THERE, I WOULD QUESTION THE COST OF IT. BUT THAT'S NOT THE POINT. THE POINT IS IT'S A CREATIVE IDEA, IT'S A DIFFERENT IDEA, IT'S STARTED THE DISCUSSION ALL OVER AGAIN IN THE EARLY PART OF THE SESSION AFTER IT MIGHT HAVE BEEN GETTING BOGGED DOWN A LITTLE BIT. IF IT DOES NOTHING MORE THAN THAT, IT WAS PROBABLY WORTH PUTTING ON THE TABLE.

Glover: NOW, AS YOU'VE SAID, WE'VE HAD PROPOSALS FROM ALMOST EVERY GROUP AT THE STATEHOUSE. THE GOVERNOR IS GOING TO WEIGH IN ON MONDAY. LET'S MAY YOU CZAR FOR A DAY. IF YOU COULD DO ANYTHING YOU WANTED TO START THIS ECONOMY AGAIN, WHAT'S YOUR PRESCRIPTION FOR SOLVING THE PROBLEM?

Blouin: PUT THE VALUES FUND BACK IN PLACE. I'M NOT GOING TO WORRY ABOUT HOW IT'S FUNDED OR AT WHAT LEVEL. WHAT WE NEED MORE THAN ANYTHING ELSE IS A LONG-TERM STATEMENT TO IOWA BUSINESS, TO OUR YOUNG PEOPLE, AND TO THE WORLD AT LARGE THAT WE'RE IN THIS FOR THE LONG PULL. I'LL LET THE LEGISLATURE WORK OUT HOW IT'S GOING TO BE FUNDED AND AT WHAT LEVEL. WE JUST NEED A PERMANENT STATEMENT AND A COMMITMENT TO THIS THING FOR THE LONG PULL. CONTINUE TO BUILD OUR COMMUNITIES. VISION IOWA AND COMMUNITY ATTRACTION HAS DONE TREMENDOUS GOOD IN 170 TOWNS IN IOWA. WE OUGHT TO KEEP IT GOING. DON'T LET OUR EDUCATIONAL SYSTEM FALL APART. IT'S A CRITICAL COMPONENT OF WHAT MAKES IOWA ATTRACTIVE. WE NEED TO MAKE THE STEPS NECESSARY -- OR TAKE THE STEPS NECESSARY TO ENSURE THAT WE'RE GOING TO HAVE, FOR YEARS TO COME, A GLOBALLY ENVIOUS EDUCATIONAL SYSTEM.

Henderson: ONE OF THE SENATE REPUBLICAN IDEAS THAT APPEARS TO HAVE LEGS, AS OPPOSED TO THIS UNDER 30 TAX BREAK, IS THE ONE WHEREBY BUSINESSES THAT CREATE A JOB WOULD GET A TAX CREDIT WORTH THE SALARY OF THAT WORKER. THEIR CONTENTION IS THAT WE SHOULD REWARD BUSINESSES AFTER THEY'VE CREATED THE JOB RATHER THAN BEFORE WHEN THEY MERELY PROMISE TO CREATE JOBS. HOW DO YOU EVALUATE THAT PROPOSAL?

Blouin: I THINK THEY'RE BOTH GOOD IDEAS. YOU HAVE TO KEEP IN MIND WE DO TAX CREDITS TODAY. WE GIVE COMPANIES TAX CREDITS FOR CREATION OF JOBS THROUGH THE NEW JOBS AND INCOME PROGRAM, THROUGH THE NEW CAPITAL INVESTMENT PROGRAM, THROUGH THE ENTERPRISE ZONE, THROUGH THE IOWA INDUSTRIAL NEW JOBS TRAINING ACT. WE'VE BEEN DOING IT SINCE THE '80S, AND IT'S EQUAL PROBABLY TO A LOT MORE THAN WHAT THEY'RE TALKING ABOUT. BUT THAT DOESN'T MAKE IT A BAD IDEA. I THINK WE OUGHT TO THROW IT IN THE MIX AND SEE IF IT WILL HELP. IT ALSO GETS TO EVERYBODY AND THAT I LIKE AS WELL. IT WOULD BE A TOOL THAT PROBABLY WOULD BE HELPFUL IN TERMS OF INTERNAL GROWTH. THE THING I LIKE MOST ABOUT IT IS THAT IT WOULD APPLY AS WELL TO THE LITTLE START-UP COMPANIES, TO THE ENTREPRENEURIAL EFFORT TO TAKE A DISCOVERY AND MOVE IT INTO A COMMERCIALIZATION ATMOSPHERE. THEY DON'T EARN A WHOLE LOT OF MONEY. AND THEY DON'T HAVE THE OPPORTUNITY TO PAY TAXES IN THOSE FORMATIVE YEARS, SO IF THERE'S SOME CARRYOVER POTENTIAL OUT OF WHAT THEY'RE TALKING ABOUT, I THINK YOU'VE GOT A TOOL THAT COULD BE EXTREMELY HELPFUL.

Yepsen: MR. BLOUIN, LAST WEEK THE IOWA TAXPAYERS ASSOCIATION CAME WITH A REPORT THAT SAID IOWA'S COMMERCIAL PROPERTY TAXES, THE PROPERTY TAXES PAID BY BUSINESSES, ARE AMONG THE HIGHEST IN THE COUNTRY. THEY RANK FIRST TO THIRD, DEPENDING UPON THE CATEGORY.

Blouin: SURE.

Yepsen: HOW BIG OF A PROBLEM IS THAT, AND WHAT SHOULD WE DO ABOUT IT?

Blouin: IT'S A PROBLEM. IT HAS NOT BEEN THE DECIDING FACTOR IN VERY MANY EXPANSION OR LOCATIONAL DECISIONS, BUT IT'S A PROBLEM. YOU KNOW, I'M AN ECONOMIC DEVELOPER. MY JOB IS TO GET EVERY BARRIER OUT OF THE WAY AS POSSIBLE AND TALK ABOUT ALL OF THE STRENGTHS OF IOWA IN THE MEANTIME. AND PROPERTY TAXES ARE A PROBLEM. I THINK EVERYBODY ACKNOWLEDGES THAT. I'VE NOT HEARD A SINGLE LEGISLATOR IN EITHER PARTY, RURAL OR URBAN, DISAGREE. IT'S A MASSIVE PROBLEM THAT REQUIRES MASSIVE ATTENTION AND PROBABLY A HUGE CHANGE IN THE WAY DOLLARS ARE RAISED. AND I HAVEN'T HEARD A SOLUTION YET TO WORK.

Yepsen: ARE YOU TRYING -- EXCUSE ME. ARE YOU TRYING TO SWEEP THIS PROBLEM UNDER THE RUG? YOUR DEPARTMENT PUT OUT A BROCHURE COMPARING IOWA'S TAXES TO OTHER STATES THAT LEFT OFF SOUTH DAKOTA. THE SPEAKER OF THE HOUSE, CHRISTOPHER RANTS, WAS VERY CRITICAL OF YOU FOR THAT, SAYING YOU'RE IGNORING THE PROBLEM. OUR COMPETITIVENESS WITH SOUTH DAKOTA IS NOT VERY GOOD. SO WHAT ARE YOU DOING HERE?

Blouin: WE'RE PROMOTING OUR STRENGTHS?

Yepsen: AND NOT PROMOTING SOUTH DAKOTA'S.

Blouin: WE'RE PROMOTING OUR STRENGTHS.

Glover: THERE'S A PROPOSAL AT THE HILL, MR. BLOUIN, TO ELIMINATE, OVER FIVE YEARS, THE INCOME TAX ON SOCIAL SECURITY AND PENSION INCOME, WITH THE ARGUMENT BEING THAT THAT WOULD MAKE THE STATE MORE ATTRACTIVE TO OLDER PEOPLE. YOU'D LURE BACK SOME OLDER PEOPLE WHO HAVE SOME MONEY TO SPEND TO POUR BACK INTO THE ECONOMY. WHAT'S YOUR POSITION ON THAT?

Blouin: THE GOVERNOR'S POSITION IS VERY CLEAR ON IT, AND I'M PART OF THE GOVERNOR'S TEAM. IT WILL KEEP WEALTH IN IOWA. I WILL LEAVE IT AGAIN TO THE LEGISLATIVE PROCESS TO WORK OUT THE PARTICULARS TO SEE HOW MUCH WE CAN AFFORD, BUT THERE'S A LOT OF WEALTH AMONG RECENTLY RETIRED PEOPLE. AND WHEN THEY LEAVE, THE MONEY LEAVES WITH THEM. I THINK THE CHOICE THEY'VE GOT TO LOOK AT IS BETWEEN DOING THAT AND MAKING THE TAX SYSTEM FAIRER FOR EVERYBODY, NOT JUST FOR ONE AGE GROUP.

Glover: ONE OF THE PROBLEMS YOU HAVE AT THE STATEHOUSE IS THERE ARE A LOT OF RURAL LEGISLATORS WHO DON'T THINK THERE'S MUCH IN IT FOR THEM IN THIS WHOLE ECONOMIC DEVELOPMENT AREA. THEY POINT TO PROJECTS THAT HAVE BEEN APPROVED AND HAVE EITHER GONE TO BIG CITIES OR THEY'VE GONE TO SMALLER TOWNS THAT REALLY DON'T NEED IT, THAT ARE DOING PRETTY WELL REGARDLESS. HOW DO YOU ANSWER THAT?

Blouin: LET ME GO BACK TO THE NUMBERS I STARTED WITH: 227 PROJECTS IN THE LAST 19 MONTHS; 69 COUNTIES; 70 PERCENT OF THEM HAVE FEWER THAN 100 EMPLOYEES; 67 PERCENT ARE EITHER EXISTING BUSINESSES OR BRAND-NEW START-UP COMPANIES BORNE BY AN IOWAN. THOSE ARE AWFULLY GOOD STATISTICS. WE DON'T HAVE 69 URBAN COUNTIES. WE'VE GOT 99 COUNTIES.

Glover: WELL, YOU HAVE THAT PERCEPTION PROBLEM UP THERE. I HEAR THAT ALL THE TIME.

Blouin: IT IS A PERCEPTION PROBLEM BUT THE DATA KNOCKS IT DOWN. I'VE CARRIED THAT MESSAGE SINCE THE FIRST OF THE YEAR INTO A COUPLE OF DOZEN COMMUNITIES AROUND THE STATE -- AT BREAKFAST CLUBS, AT ROTARY MEETINGS, KIWANIS, ANYWHERE I CAN GET A GROUP TOGETHER, WESTERN AND SOUTHEASTERN IOWA AND NORTHERN IOWA -- AND WHEN PEOPLE HEAR THE DATA, IT'S AMAZING HOW THE ATTITUDE CHANGES.

Yepsen: WELL, MR. BLOUIN, EXCUSE ME. YOU JUST SAID 69 COUNTIES. THAT MEANS 30 COUNTIES GOT NOTHING.

Blouin: YEAH.

Yepsen: ARE YOU WRITING OFF A THIRD OF THE STATE? [ BLOUIN LAUGHS ]

Yepsen: WHEN YOU LOOK AT YOUR MAP, MR. BLOUIN, OF WHERE THESE PROJECTS ARE, I DON'T SEE A LOT IN WESTERN IOWA. I DON'T SEE A LOT IN SOUTHERN IOWA.

Blouin: TO THE CONTRARY; SOUTHERN IOWA IS A PROBLEM, DAVID.

Yepsen: ALL RIGHT. MY QUESTION IS -- MY QUESTION IS 30 OF THOSE COUNTIES ON THAT MAP GOT NOTHING OUT OF YOUR AGENCY ON THIS VALUES FUND. WHAT ARE YOU GOING TO DO ABOUT THAT?

Blouin: WE DON'T TELL COMPANIES WHERE TO GO. IF WE DID, THEY'D START TELLING US WHERE TO GO.

Yepsen: BUT YOU DECIDE WHERE THE GRANTS GO.

Blouin: NO. WE DECIDE WHERE THE DOLLARS GO IN RELATIONSHIP TO WHERE COMPANIES AGREE TO SETTLE. WE DON'T TELL THEM WHERE TO GO. WE WORK WITH LOCAL COMMUNITIES. WE WORK WITH COMPANIES TO FLUSH OUT WHAT THEIR NEEDS ARE AND TRY TO HELP THEM DETERMINE WHERE THEIR LIST OF IMPORTANT STEPS FOR THEIR PROCESS EXIST IN IOWA, REGARDLESS OF LOCATION. THEY DO THE WINNOWING DOWN. THEY DO THE DECISION-MAKING. AND WE ENGAGE OUR LOCAL COMMUNITIES IN THAT PROCESS AT THE EARLIEST POSSIBLE POINT. SECONDLY, A SUBSTANTIAL PERCENTAGE OF THE PROJECTS WE WORK WITH COME TO US FROM THE LOCAL COMMUNITY. THEY COME TO US FROM ACTIVE, PRIVATE/PUBLIC PARTNERSHIPS THAT ARE FINANCED OUT OF LOCAL DOLLARS WITH LOCAL STAFF WHO ARE PROFESSIONALS AND ARE CHOMPING AT THE BIT TO DO THIS WELL. WHERE THE WHITE SPACE EXISTS ON THE MAP IS WHERE THERE TENDS TO BE QUITE A BIT OF GAP IN TERMS OF PRIVATE/PUBLIC PARTNERSHIP. YOU'VE GOT LOCAL ECONOMIC DEVELOPERS WHOSE DOLLARS COME MAYBE EXCLUSIVELY FROM A COUNTY ANNUAL BUDGET OR A COUPLE OF CITIES' ANNUAL BUDGETS. THERE'S UNCERTAINTY AS TO WHETHER THEY CAN MAINTAIN THAT FROM YEAR TO YEAR. THERE'S NO MONEY TO MARKET. THERE'S NO MONEY TO JOIN THE STATE IN ITS SELL-IOWA TRIPS AROUND THE COUNTRY. THEY'RE REALLY DISADVANTAGED. IN THE BILL THAT PASSED THE IOWA HOUSE TWO YEARS AGO, THE CLARENCE HOFFMAN BILL THAT PASSED WITH 87 VOTES, THERE WERE DOLLARS IN THERE TO HELP US PUT MONEY INTO THE HANDS OF WHAT I WOULD CALL THOSE DISADVANTAGED AREAS OF THE STATE TO GIVE THEM A CHANCE TO GET CAUGHT UP, TO PUT THEM IN THE GAME. AND THAT GOT TAKEN OUT OF THE FINAL BILL ENTIRELY. IT'S BACK IN CLARENCE'S BILL IN THE HOUSE, AND I HOPE IT STAYS, BECAUSE THOSE SPOTS ARE GOING TO STAY WHITE, IF YOU WILL, AS LONG AS THEY DON'T HAVE THE RESOURCES TO JOIN WITH US.

Henderson: A FEW MOMENTS AGO DAVID ASKED YOU ABOUT PROPERTY TAXES. LET'S FOCUS ON INCOME TAXES. THERE ARE THOSE WHO CONTEND IOWA'S INCOME TAXES, WHEN COMPARED TO THOSE IN OTHER STATES, MAKE THE STATE UNCOMPETITIVE FOR BUSINESSES LOOKING AT PLACES TO LOCATE BECAUSE THEY DON'T WANT THEIR EMPLOYEES TO HAVE TO PAY THAT HIGHER TAX RATE. HOW KEY A COMPONENT IS GETTING RID OF THE DEDUCTION FOR FEDERAL TAXES PAID ON IOWA'S INCOME TAXES, WHICH INFLATES HOW IOWA'S TAX RATE COMPARES TO OTHER STATES?

Blouin: SURE. ANYTIME YOU HAVE TO EXPLAIN SOMETHING, YOU'VE LOST HALF THE BATTLE. AND IF YOU'VE GOT TO EXPLAIN IT A COUPLE OF TIMES, YOU'VE LOST THE BATTLE ENTIRELY. AND FEDERAL DEDUCTABILITY IS CONFUSING. IT'S CONFUSING ON OUR CORPORATE INCOME TAXES. IT'S CONFUSING ON OUR PERSONAL INCOME TAXES. WE ALLOW 100-PERCENT DEDUCTABILITY ON PERSONAL. WE ALLOW 50-PERCENT DEDUCTABILITY ON CORPORATE. AND WHEN WE HAVE TO GO THROUGH THE PROCESS OF EXPLAINING THAT OUR UPPER BRACKET REALLY ISN'T 9 PERCENT, IT'S JUST 6 PERCENT, YOU'VE LOST THEM, ESPECIALLY WHEN THEY GO TO OTHER STATES THAT DON'T HAVE THAT KIND OF CONFUSION. FROM AN ECONOMIC DEVELOPER'S PERSPECTIVE, SOMEBODY WHO HAS BEEN IN THIS BUSINESS OVER TWENTY YEARS, IT OUGHT TO BE CHANGED. REVENUE NEUTRAL -- I'M NOT TALKING ABOUT INCREASING ANYBODY'S TAX RATE. I'M TALKING ABOUT ELIMINATING IT SO THAT THE TOP BRACKET BECOMES, IN FACT, ON PAPER WHAT IN REALITY IT REALLY IS.

Glover: MR. BLOUIN, YOU MENTIONED EARLIER THE LOCAL GROUPS YOU WORK WITH. I'D LIKE TO ASK YOU A RELEVANCY QUESTION. HOW RELEVANT IS THE STATE'S ECONOMIC DEVELOPMENT EFFORTS? AREN'T WE REALLY DEPENDENT ON COMMUNITIES WHERE WE'VE GOT LOCAL GROUPS, LOCAL PEOPLE INVOLVED IN TRYING TO MAKE THAT COMMUNITY GO? ISN'T THAT WHAT REALLY DRIVES THE ECONOMY?

Blouin: IT'S A COMBINATION OF WHAT A LOCAL COMMUNITY IS WILLING TO DO TO MAKE ITSELF DYNAMIC: CAT, MAIN STREET, VISION IOWA, OTHER INFRASTRUCTURAL ASSETS, TAKING ADVANTAGE OF THE EDUCATIONAL RESOURCES THAT EXIST IN THAT COMMUNITY AND BUILDING UPON IT, INCORPORATING IT INTO THE COMMUNITY; BUILDING ON THE DIVERSITY OPPORTUNITIES THAT EXIST. I MEAN STORM LAKE IS SUCH A PRIME EXAMPLE OF HOW A COMMUNITY HAS EMBRACED, AFTER YEARS OF TRYING TO FIGURE IT OUT, NOT JUST DIVERSITY BUT THE UNIVERSITY -- BUENA VISTA UNIVERSITY STRENGTHS THAT EXIST THERE. THEY'RE TRYING TO FIND WAYS OF WAKING UP THE LAKE THAT EXISTS IN STORM LAKE. AND AS A RESULT, THEY'RE RAISING THEIR OWN EXPECTATIONS AND THEY'RE GOING TO BECOME A POWERFUL FORCE IN NORTHWEST IOWA FOR MANY YEARS.

Glover: I GUESS MY QUESTION IS, IF YOU'VE GOT A COMMUNITY THAT'S GOT THOSE KIND OF PEOPLE IN IT, THAT COMMUNITY IS GOING TO BE A SUCCESS. IF YOU'VE GOT A COMMUNITY THAT DOESN'T HAVE THOSE KIND OF FOLKS IN IT, IT'S NOT AND THERE'S NOT MUCH THAT YOU CAN DO ABOUT IT.

Blouin: YOU CAN'T FORCE LEADERSHIP BUT I BELIEVE EVERY COMMUNITY IN IOWA, IN A GENERAL SENSE, HAS THAT KIND OF LEADERSHIP. WHAT THE STATE CAN OFFER IS A MARKETING THEME AND INCENTIVES AND A WAY OF ORGANIZING EFFORTS TO ATTRACT AND GROW BUSINESSES ACROSS THE BOARD SO THAT THOSE COMMUNITIES AREN'T WANDERING ON THEIR OWN IN THIS EFFORT TO GROW THEIR ECONOMIC BASE. VERY FEW TOWNS IN IOWA ARE CAPABLE OF DOING IT ALONE.

Yepsen: WELL, IF WE'VE GOT SUCH GREAT LOCAL LEADERSHIP OUT THERE, MR. BLOUIN, WHY ARE THERE 30 COUNTIES IN THE STATE WHERE THERE'S NOTHING GOING ON WITH THE VALUES FUND?

Blouin: WELL, FIRST OF ALL --

Yepsen: PEOPLE ARE NOT STEPPING -- THE FACT IS PEOPLE ARE NOT STEPPING FORWARD AND ENLISTING YOUR HELP TO DO THIS.

Blouin: THEY ARE, DAVID. THEY ARE STEPPING FORWARD.

Yepsen: WELL, THEN WHY IS A THIRD OF THE STATE DYING?

Blouin: PART OF IT IS A POPULATION TREND. I MEAN WE CAN -- YOU CAN GET INTO THIS STUFF AS DEEPLY AS YOU WANT. AND IN A HALF HOUR, THERE'S NO WAY WE CAN COVER IT ALL. PART OF IT IS THE FACT THAT THEY'VE BEEN BEATEN DOWN SO MANY TIMES OVER THE YEARS THAT THEY JUST DON'T SEE ANY REASON TO STEP UP. THERE'S MORE GOING ON IN SOME OF THOSE RURAL AREAS THAN YOU THINK. THERE ARE COMMUNITIES LIKE SHENANDOAH AND CLARINDA AND RED OAK AND CRESTON AND ATLANTIC THAT ARE WORKING TOGETHER IN TRYING TO FIND WAYS OF BUILDING ON THEIR MUTUAL STRENGTHS. THERE ARE COUNTIES IN SOUTHEAST IOWA WHO, FOR YEARS, HAVE REFUSED TO WORK TOGETHER WHO ARE FORMING COALITIONS NOW AND TRYING TO FIND A WAY TO SELL A COMMON THEME. IT'S STARTING TO HAPPEN.

Yepsen: KAY IS THE VOICE OF SOUTHWEST IOWA.

Henderson: EXACTLY. YOU MENTIONED EARLIER THAT THE UNDER-30 CROWD MAKES DECISIONS WHERE TO LIVE BASED ON THE VIBRANCY OF THE COMMUNITY. WHAT CAN THE STATE DO, IF ANYTHING, TO MAKE COMMUNITIES MORE VIBRANT, TO HAVE THOSE CULTURAL ASPECTS TO IT, PLACES WHERE THEY CAN LIVE AND THRIVE IN THE KIND OF ON-LINE COMMUNITIES THAT THEY WISH TO HAVE?

Blouin: ABOUT $300 MILLION OF GAMBLING MONEY HAS BEEN SPENT THROUGH VISION IOWA AND CAT OVER THE LAST SEVERAL YEARS. IT'S LEVERAGED WELL OVER $2 BILLION OF LOCAL --

Henderson: BUT THESE ARE PEOPLE WHO MAY NOT BE ABLE TO AFFORD A TICKET TO THE DOWNTOWN ARENA HERE, AND THEY MAY WANT SOMETHING ELSE.

Blouin: BUT THEY CAN AFFORD THE PARKS. THEY CAN WALK AROUND THE MISSISSIPPI AND SEE AN INCREDIBLE RENAISSANCE HAPPENING AND TAKE ADVANTAGE, FREE OF CHARGE, OF SOME OF THE PARKS AND TRAILS THAT ARE COMING INTO BEING. YOU DON'T EVEN HAVE TO GO TO A WHITE SOX GAME. I'M A SOX FAN SO I WON'T SAY CUBS. BUT YOU GO TO A WHITE SOX GAME, IT COSTS YOU A FORTUNE. BUT JUST KNOWING THAT IT'S THERE IS AN AMENITY, KNOWING THAT MAYBE ONE OF THESE DAYS WE'LL GO OVER AND SEE A GAME AT WRIGLEY FIELD OR COMISKEY PARK. THAT'S AN ADVANTAGE. SOME PARTS OF IOWA HAVE THAT ADVANTAGE. MANY PARTS HAVE TO CREATE OTHER AMENITIES. I'VE SAID THIS ALL OVER THE STATE, AND I REALLY BELIEVE THIS: THE PHONE RINGS IN DES MOINES BECAUSE THERE'S AN ASSUMPTION ON THE PART OF A COMPANY THAT THE AMENITIES ARE HERE THAT THEY'RE LOOKING FOR. THEY EXIST IN ALMOST EVERY PART OF THE STATE, NOT JUST ALL IN ONE TOWN. IF YOU PIN DOWN IN ALMOST ANY CITY IN IOWA, NO MATTER HOW LARGE IT IS, AND GO OUT 20 OR 30 MILES, YOU'LL FIND EVERY AMENITY THAT EXISTS IN DES MOINES TO VARYING DEGREES. THEY JUST AREN'T AS VISIBLE. THEY'RE HIDDEN IN A RURAL CLOTHING, IF YOU WILL. THEY NEED TO FIND WAYS TO SELL IT AS A NEIGHBORHOOD, AS A COLLECTION OF TOWNS TO RAISE THE LEVEL OF WHAT THEY HAVE SO THAT THEY CAN START GETTING THE PHONE TO RING.

Yepsen: MR. BLOUIN, MY PHONE IS RINGING. THEY'RE TELLING ME WE'RE OUT OF TIME. THANKS FOR BEING WITH US THIS WEEK. WE APPRECIATE IT.

Blouin: THANK YOU VERY MUCH. IT'S GOOD TO BE BACK.

Yepsen: NOW, ON OUR NEXT EDITION OF "IOWA PRESS," OUR FOCUS SHIFTS FROM IOWA'S CAPITAL TO THE NATION'S CAPITAL WHERE THE 109TH CONGRESS HAS JUST OPENED. AND WE CALL ON A VETERAN MEMBER OF THE IOWA DELEGATION IN WASHINGTON, D.C. JOINING US IS REPRESENTATIVE JIM LEACH FROM IOWA'S SECOND CONGRESSIONAL DISTRICT. WE'LL DISCUSS IRAQ, DEFICITS, SOCIAL SECURITY, AND TAXES. WE'LL RETURN NEXT WEEKEND AT OUR REGULAR AIRTIMES: FRIDAY AT 7:30 AND SUNDAY AT NOON. I HOPE YOU'LL BE JOINING US. I'M DAVID YEPSEN OF "THE DES MOINES REGISTER." THANKS FOR BEING WITH US HERE ON STATEWIDE IOWA PUBLIC TELEVISION. CAPTIONS BY: MIDWEST CAPTIONING DES MOINES, IOWA

FUNDING FOR THIS PROGRAM WAS PROVIDED BY "FRIENDS," THE IOWA PUBLIC TELEVISION FOUNDATION; BY THE IOWA BANKERS ASSOCIATION... FOR PERSONAL, BUSINESS, AND COMMERCIAL NEEDS, IOWA BANKS HELP IOWANS REACH THEIR FINANCIAL GOALS; BY THE ASSOCIATED GENERAL CONTRACTORS OF IOWA, THE PUBLIC'S PARTNER IN BUILDING IOWA'S HIGHWAY, BRIDGE, AND MUNICIPAL UTILITY INFRASTRUCTURE; AND BY CAPITOL RESOURCES, INC., LOCATED IN BROOKLYN, IOWA; AND BY NICOLE SCHLINGER AND ERIC LANGE INDIVIDUALLY, FUND-RAISING AND COMMUNICATION SERVICES FOR MAJOR CAMPAIGNS SINCE 1996.

Tags: Iowa