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Michael Blouin, Director of the Iowa Department of Economic Development (#3026)
February 14, 2003

Borg: AT THE IOWA STATEHOUSE, ECONOMIC DEVELOPMENT IS A PRIORITY FOR BOTH THE EXECUTIVE AND THE LEGISLATIVE BRANCHES OF IOWA GOVERNMENT. WE'LL DISCUSS THE DYNAMICS OF TRANSFORMING IOWA'S ECONOMY WITH THE NEW DIRECTOR OF THE IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT, MICHAEL BLOUIN, ON THIS EDITION OF "IOWA PRESS."

FUNDING FOR THIS PROGRAM WAS PROVIDED BY "FRIENDS," THE IOWA PUBLIC TELEVISION FOUNDATION... GENERATIONS OF FAMILIES AND FRIENDS WHO FEEL PASSIONATE ABOUT THE PROGRAMS THEY WATCH ON IOWA PUBLIC TELEVISION; AND BY THE IOWA BANKERS ASSOCIATION... FOR PERSONAL, BUSINESS, AND COMMERCIAL NEEDS, IOWA BANKS HELP IOWANS REACH THEIR FINANCIAL GOALS; AND BY THE ASSOCIATED GENERAL CONTRACTORS OF IOWA... THE PUBLIC'S PARTNER IN BUILDING IOWA'S HIGHWAY, BRIDGE, AND MUNICIPAL UTILITY INFRASTRUCTURE. ON STATEWIDE IOWA PUBLIC TELEVISION, THIS IS THE FRIDAY, FEBRUARY 14 EDITION OF "IOWA PRESS." HERE IS DEAN BORG.

Borg: STATEHOUSE INSIDERS AND BUSINESS LEADERS GENERALLY APPLAUD GOVERNOR TOM VILSACK'S APPOINTMENT OF MICHAEL BLOUIN TO DIRECT IOWA'S DEPARTMENT OF ECONOMIC DEVELOPMENT. BLOUIN'S SELECTION CAME IN THE VILSACK ADMINISTRATION'S POST-ELECTION SHAKEUP, AMID MUCH HANDWRINGING OVER IOWA'S SLUGGISH ECONOMY, EVEN IN GOOD TIMES ELSEWHERE. BLOUIN BEGAN HIS PUBLIC SERVICE CAREER AS A STATE LEGISLATOR FROM DUBUQUE, ELECTED TO BOTH THE IOWA HOUSE OF REPRESENTATIVES AND THE IOWA SENATE. HE THEN MOVED TO CONGRESS, REPRESENTING NORTHEAST IOWA IN THE HOUSE OF REPRESENTATIVES. AND MORE RECENTLY, BLOUIN HAS MOVED TO ECONOMIC AND COMMUNITY DEVELOPMENT IN THE PRIVATE SECTOR. HE SERVED AS PRESIDENT OF THE CEDAR RAPIDS AREA CHAMBER OF COMMERCE AND THEN MOVED TO BE THE CEO OF THE GREATER DES MOINES PARTNERSHIP. THAT'S THE HIGH-PROFILE AGENT-OF-DEVELOPMENT IN CENTRAL IOWA. MIKE BLOUIN, WELCOME BACK TO "IOWA PRESS." IT'S BEEN SOME TIME.

Blouin: DELIGHTED TO BE HERE, DEAN. THANK YOU.

Borg: AND ACROSS THE TABLE, TWO PEOPLE YOU KNOW WELL: "DES MOINES REGISTER" POLITICAL COLUMNIST DAVID YEPSEN AND "ASSOCIATED PRESS" SENIOR LEGISLATIVE REPORTER MIKE GLOVER.

Glover: MR. BLOUIN, THERE HAS BEEN SOME CONTROVERSY SINCE YOU'VE BEEN APPOINTED TO THE DEPARTMENT OF ECONOMIC DEVELOPMENT HEAD ABOUT YOUR SALARY, BECAUSE PART OF IT IS FINANCED BY PRIVATE BUSINESSES THAT YOU MAY HAVE TO HAVE INTERACTION WITH. IS THAT AN INHERENT CONFLICT?

Blouin: CONTROVERSY FOLLOWS ME, MIKE, WHEREVER I GO, SO IT DOESN'T SURPRISE ME THAT SOMETHING HAPPENED ALREADY. FIRST OF ALL, THAT'S NOT WHAT HAPPENED. THAT WAS THE ORIGINAL PLAN, THE ORIGINAL HOPE, TO TRY TO FIND A WAY TO UTILIZE THE FOUNDATION TO PICK UP PART OF THE COMPENSATION PACKAGE. IT WAS ALL PUBLICLY LAID OUT FROM THE VERY BEGINNING AT THE FIRST PRESS CONFERENCE WHEN THE GOVERNOR ANNOUNCED MY APPOINTMENT. IT TURNED OUT TO BE TOO COMPLICATED, TOO FRAUGHT WITH DIFFICULTIES, AND THE IDEA WAS SHELVED, AND THE ENTIRE COMPENSATION PACKAGE IS NOW COMING OUT OF STATE FUNDS. IT'S A SUBSTANTIAL CUT IN PAY FROM WHAT I'VE BEEN MAKING, BUT IT'S A DECISION I MADE FROM THE VERY FIRST TO AGREE TO THAT. AND NOW IT'S ON WITH THE JOB.

Glover: IS THIS AN ARGUMENT MANY PEOPLE IN THE PRIVATE SECTOR SAY, IF YOU WANT GOOD PEOPLE, YOU BETTER BE WILLING TO PAY THEM?

Blouin: NO QUESTION ABOUT IT.

Glover: IS THIS AN ARGUMENT FOR THAT?

Blouin: IT IS. I THINK IOWA COMPENSATION LEVELS FOR DEPARTMENT HEADS IN THE EXECUTIVE BRANCH OF GOVERNMENT ARE INCREDIBLY LOW COMPARED TO WHAT'S NECESSARY TO ATTRACT GOOD TALENT. WE DON'T HAVE THAT PROBLEM IN THE COACHING FRATERNITY. WE FOUND A WAY TO DEAL WITH THE MARKET DEMANDS AND THE NEED FOR MEANINGFUL COMPENSATION. FOR SOME REASON WE HAVE A HARD TIME CARRYING THE LOGIC OF THAT OVER TO STATE GOVERNMENT.

Yepsen: MR. BLOUIN, YOU'RE THE POINT MAN FOR THE GOVERNOR ON ECONOMY GROWTH ISSUES IN THE LEGISLATURE. EVERYBODY IN THE LEGISLATURE SAYS ECONOMIC GROWTH IS JOB ONE, IT'S THE NUMBER ONE PRIORITY. WHAT'S "THE" MOST IMPORTANT THING, OR WHAT ARE THE TWO MOST IMPORTANT THINGS YOU WANT THE IOWA LEGISLATURE TO DO TO HELP IOWA'S ECONOMY GROW?

Blouin: WE NEED THE IOWA VALUES FUND, NUMBER ONE, NUMBER TWO, NUMBER THREE, AS FAR DOWN THE LIST AS YOU CHOOSE TO GO.

Yepsen: WHAT IS IT?

Blouin: IT IS A $500-MILLION ATTEMPT TO TRANSFORM THE IOWA ECONOMY. IT IS, AT THIS STAGE, A CONCEPT THAT THE GOVERNOR HAS PUT ON THE TABLE AS A WAY OF MOVING A FAIRLY STAYED, REASONABLY SAFE, BUT DOWNHILL DIRECTED ECONOMY TO SOMETHING THAT'S 21ST CENTURY, TO SOMETHING THAT'S MORE IN TUNE WITH GROWTH INDUSTRIES THAT FIT IOWA. WE DON'T HAVE THE TOOLS TODAY TO DO MUCH OF ANYTHING IN TERMS OF GROWING, NURTURING, OR ATTRACTING BUSINESS. THIS WILL GIVE US THOSE TOOLS.

Glover: MR. BLOUIN, SINCE I'VE BEEN AROUND THE STATEHOUSE -- AND THAT'S BEEN MORE THAN A YEAR OR TWO -- TOPIC ONE HAS BEEN ECONOMIC DEVELOPMENT. IT'S BEEN THE TOPIC SINCE DAY ONE. WHAT CAN THE STATE REALLY DO, STATE GOVERNMENT, THAT IS, TO ALTER ECONOMIC DEVELOPMENT? ISN'T IT A RELATIVELY MINOR PLAYER? AREN'T YOU JUST ALONG FOR THE RIDE? YOU'LL GO WHERE THE ECONOMY IS GOING TO GO?

Blouin: NOT EXACTLY. THE STATE CAN'T CREATE AN ECONOMY. A STATE IS, TO SOME DEGREE, A SLAVE TO A NATIONAL ECONOMY, WHICH BECOMES MORE AND MORE THESE DAYS SUBJECT TO GLOBAL WHIMS. BUT IN TERMS OF TRYING TO CREATE BUSINESS STRUCTURES WITHIN THE STATE THAT ARE GROWTH INDUSTRIES IN THEMSELVES, WE CAN DO A LOT TO HELP POSITION US TO TAKE ADVANTAGE OF THAT GROWTH. WE'RE IDEALLY SUITED, NOT UNIQUELY BUT IDEALLY SUITED, FOR THE THREE CLUSTERS THAT EVERYONE HAS BEEN TALKING ABOUT: LIFE SCIENCES, INFORMATION SOLUTIONS, ADVANCED MANUFACTURING. AND WE EITHER TAKE ADVANTAGE OF THAT OPPORTUNITY TO GROW THOSE BUSINESSES TODAY AND BE A PARTNER IN THAT EFFORT, NOT A DRIVING FORCE BY ITSELF BUT A PARTNER, OR WE'RE GOING TO MISS THE MOMENT, AND IT WON'T COME BACK FOR QUITE SOME TIME.

Borg: YOU CALLED THE IOWA VALUES FUND A CONCEPT FOR DEVELOPING RURAL IOWA. WHAT IS THAT CONCEPT? IS IT TO DEVELOP SMALL TOWNS, OR IS IT TO DEVELOP ALREADY EXISTING INDUSTRIAL CENTERS, SUCH AS CEDAR RAPIDS, AND THEN HAVE A SPOKE AND WHEELS, WHERE PEOPLE COME FROM VINTON AND MECHANICSVILLE INTO CEDAR RAPIDS BUT YOU'VE INVESTED IN CEDAR RAPIDS?

Blouin: IT'S NOT EXACTLY EITHER, DEAN. IT'S AN EFFORT TO FIRST GET US TO THINK DIFFERENTLY ABOUT THE WAY WE TRY TO GROW THE STATE. WE HAVE 950 TOWNS IN IOWA. MOST ALL OF THEM STARTED AS SHOPPING CENTERS FOR FARM COMMUNITIES. SEVERAL OF THEM GREW ECONOMIES INDEPENDENT OF THAT FARM COMMUNITY; MOST DIDN'T. THE CUSTOMER BASE FED THOSE COMMUNITIES. THE CUSTOMER BASE IS GONE. WE CAN'T SAVE 950 TOWNS WITHOUT CUSTOMER BASE. WE CAN'T CREATE CUSTOMER BASE WITHOUT OCCUPATIONS OR THAT INDUSTRY WITHOUT BUSINESS GROWTH. AND WE CAN'T DO THAT IF WE STAY IN THE 950-TOWN MOLD. AND WE'RE SUGGESTING WE CONSIDER 20, 30, 35 REGIONS OF THE STATE AS COMMUNITIES THAT CAN GROW.

Borg: THEN ISN'T THAT ALSO A BACK-DOOR WAY TO GETTING PEOPLE TO THINK REGIONALLY IN OTHER TERMS, CONSOLIDATION OF GOVERNMENTS?

Blouin: IF THAT COMES, THAT'S A SEPARATE TRACK. THAT'S NOT THE PURPOSE OF THIS. THE PURPOSE IS TO USE A BUSINESS MODEL TO GET THE 225 PUBLIC/PRIVATE SECTOR, ECONOMIC DEVELOPMENT, LOCAL ORGANIZATIONS TO THINK IN TERMS OF GROUPING THEIR EFFORTS AND CREATE SINGLE-FOCUSED INITIATIVES THAT PUSH AND BUILD ON THE STRENGTHS OF A CLUSTER OF COMMUNITIES AS THE BEST WAY TO BEGIN TO BUILD AN ECONOMY. WHATEVER HAPPENS TO LOCAL GOVERNMENTS IS A SEPARATE DECISION AND ISN'T NECESSARILY RELATED TO THIS.

Glover: MR. BLOUIN, THERE'S BEEN A LOT OF TALK THAT ADOPTING THAT APPROACH, IN ESSENCE, AMOUNTS TO WRITING OFF LARGE SECTIONS OF THE STATE, TELLING THOSE SMALL TOWNS "YOUR DAY HAS COME AND GONE." WHAT DO YOU SAY TO THAT?

Blouin: IF THEY LOOK AT WHAT WE'RE TRYING TO DO, JUST THE OPPOSITE IS TRUE. THE BIGGEST PROBLEM WITH RURAL IOWA -- ISOLATED IOWA ESPECIALLY, THOSE COMMUNITIES THAT ARE MORE THAN 40 MILES AWAY FROM A COMMERCIAL CENTER, IS THEY ARE NOT PLAYERS IN THE GAME TODAY. THEY DON'T HAVE THE RESOURCES TO STEP UP TO THE TABLE AND BE PART OF THIS. WE'RE TRYING TO CREATE A SCENARIO IN WHICH IN GROUPINGS OF COMMUNITIES, THEY WILL HAVE THAT OPPORTUNITY TO SIT AT THE TABLE AS EQUAL PLAYERS WITH AN EQUAL OPPORTUNITY TO SUCCEED. NO GUARANTEES HERE, BUT AN EQUAL OPPORTUNITY TO SUCCEED.

Yepsen: MR. BLOUIN, WHAT ARE YOU GOING TO DO DIFFERENTLY THAN YOUR PREDECESSORS? I MEAN I'VE HEARD ABOUT REGIONAL ECONOMIC DEVELOPMENT FOR YEARS. MIKE IS RIGHT; WE'VE BEEN TALKING ABOUT ECONOMIC GROWTH IN THE LEGISLATURE SINCE BOTH OF US HAVE BEEN AROUND. WHAT'S GOING TO BE DIFFERENT HERE? I MEAN EVEN THE VALUES FUND, IT'S A STATE FUND TO MAKE INVESTMENTS. WHAT'S GOING TO BE DIFFERENT ABOUT MIKE BLOUIN'S STEWARDSHIP TO THE DEPARTMENT OF ECONOMIC DEVELOPMENT, AND HOW WILL YOU WORK WHERE OTHERS HAVE FAILED?

Blouin: TWO THINGS. WITH THE IOWA VALUES FUND, THERE IS A PIECE OF IT THAT'S DESIGNED TO CREATE INCENTIVES FOR REGIONAL ACTIVITIES FOR THESE ECONOMIC DEVELOPMENT GROUPS TO COME TOGETHER. ONE OF THOSE INCENTIVES IS TO USE STATE TAX CREDITS FOR THOSE WHO WILL INVEST IN THE PRIVATE SECTOR IN LOCALLY CONTROLLED, REVOLVING LOAN FUNDS. THE HOPE IS WE CAN CREATE $100 MILLION OF REVOLVING LOAN FUNDS THAT WOULD BE DRIVEN BY PRIVATE INVESTMENT, THAT WOULD BE LEVERAGED BY SOME STATE TAX CREDIT AUTHORITY, AND WOULD PUT THOSE FOLKS IN A POSITION THEY'VE NEVER BEEN IN BEFORE, THE ABILITY TO DRIVE THEIR OWN INCENTIVES; HELP THEM THROUGH LEVERAGING OF INVESTMENTS FROM THE LARGER PLAYERS IN THE STATE TO CREATE THEIR OWN COMMUNITY-BASED SEED CAPITAL FUNDS; CREATE A POT OF MONEY THAT COULD BE USED TO HELP LEVERAGE DIFFERENT COMMUNITY IDEAS THAT WOULD NURTURE ENTREPRENEURIAL ACTIVITIES IN CONJUNCTION WITH THE UNIVERSITIES OR INDEPENDENT OF IT, DEPENDING ON THEIR LOCAL PLAN. THE OTHER SIDE OF THE COIN THAT'S ESSENTIAL TO THIS IS TO CHANGE THE WAY WE DO BUSINESS IN RELATIONSHIP TO THOSE REGIONS. WE DON'T HAVE A LOT OF TRUST BUILT UP WITH LOCAL COMMUNITIES IN THIS STATE, LARGE OR SMALL, AND IT'S BECAUSE OF, I BELIEVE FROM MY EXPERIENCE AS A LOCAL DEVELOPER, A LACK OF RELATIONAL ATTITUDE THAT'S CONSIDERED A PEER KIND OF APPROACH. IT'S MORE OF A BIG-BROTHER, UMBILICAL-CORD APPROACH, AND WE DON'T HAVE THE TOOLS TO BE THAT WAY. WE NEED TO SIT DOWN WITH THESE GROUPS AS EQUALS; CREATE A JOINT MARKETING PLAN; ESTABLISH QUANTIFIABLE, MEASURABLE GOALS AND OBJECTIVES THAT DO NOT EXIST TODAY AT THE STATE LEVEL IN CONJUNCTION WITH THESE LOCAL ENTITIES, AND GO ABOUT THE BUSINESS COLLECTIVELY OF TRYING TO ACHIEVE THEM. WE NEED TO SET MEASURABLE ECONOMIC MODELS THAT HELP US DETERMINE THE VALUE OF OUR PROGRAMS. WE CAN'T TELL YOU TODAY WHETHER CIBA HAS AN ECONOMIC PAYBACK. WE THINK IT DOES BUT WE DON'T KNOW. WE HAVE NO WAY OF PROVING IT. WE NEED TO BE ABLE TO DOCUMENT THAT AND DUMP THOSE THAT DON'T WORK AND BUILD ON THOSE THAT DO.

Glover: LET'S LOOK AT SOME OF THOSE THINGS THAT HAVE BEEN ON YOUR PLATE IN THIS LEGISLATIVE SESSION.

Blouin: SURE.

Glover: JUST THIS PAST WEEK THE IOWA FARM BUREAU CAME TO THE STATEHOUSE AND PRESENTED A PLAN THAT WOULD DO A LOT OF THINGS: IT WOULD REVAMP THE STATE'S PROPERTY TAX SYSTEM; IT WOULD POUR SOME MONEY INTO SCHOOLS; IT WOULD BORROW $2 MILLION TO FINANCE YOUR IOWA VALUES FUND. WHAT'S THIS ADMINISTRATION'S VIEW TOWARDS THAT PLAN?

Blouin: YEAH, ALL OF A SUDDEN THE GOVERNOR IS THE PIKER IN THIS THING. HE JUST WANTS A MEASLY HALF A BILLION.

Glover: RIGHT. THE BIG SPENDING FARM BUREAU WANTS TWO BILLION --

Blouin: HAS COME IN WITH A TWO-BILLION-PLUS PROPOSAL. WHAT'S IT'S DONE IS IT'S ELEVATED THE DISCUSSION. THE GOVERNOR, CHRIS RANTS, STEW IVERSON, ALL OF THE LEADERS IN BOTH PARTIES HAVE BEEN SAYING, "BRING US IDEAS, BRING US BLOCKBUSTER SUGGESTIONS." THE FARM BUREAU HAS DONE THAT. WHETHER YOU AGREE WITH IT OR NOT, IT HAS ELEVATED THE DEBATE TO A LEVEL THAT IT NEEDS TO GET TO IF WE'RE EVEN GOING TO ACCOMPLISH THE GOVERNOR'S PROPOSAL.

Glover: WELL, LET'S START WITH THAT VERY QUESTION, "AGREE WITH IT OR NOT?" AGREE WITH IT OR NOT?

Blouin: I DON'T KNOW. I DON'T KNOW ENOUGH ABOUT IT. TIF ABOLISHMENT IS HIGHLY CONTROVERSIAL. SURE, IT'S HAD ABUSES BUT IT'S THE ONLY TOOL THAT LOCAL GOVERNMENTS HAVE TO REALLY DO ECONOMIC DEVELOPMENT. BUT IT MIGHT, IN ITS DEBATE, OPEN THE DOOR TOWARD DISCUSSIONS ABOUT DEFINING OR REDEFINING WHAT ESSENTIAL PUBLIC PURPOSE IS FOR ACCESS TO PROPERTY TAX USE LOCALLY. IT MIGHT OPEN THE DOOR TO THE SUPERMAJORITY DEBATE.

Glover: LET'S GET SOME MECHANICAL THINGS GOING HERE. HOW IS THIS ADMINISTRATION GOING TO RESPOND TO THIS PROPOSAL? EVERYBODY SAYS IT'S A BOLD PROPOSAL. IT'S SOMETHING THEY WANT TO TAKE SERIOUSLY. WHAT HAPPENS NOW? WHERE DO WE GO FROM HERE? HOW LONG DOES IT TAKE THIS ADMINISTRATION TO CRAFT A RESPONSE? DO YOU SAY YEA OR NAY? DO YOU COME UP WITH AN ALTERNATIVE? WHAT HAPPENS FROM HERE?

Blouin: I DON'T THINK IT'S THE GOVERNOR'S HISTORY TO SAY YEA OR NAY. AT LEAST IT'S NOT HIS CURRENT POSTURE WHEN IT COMES TO ECONOMIC DEVELOPMENT. HE HAS SAID HERE'S A PLAN, HERE'S AN IDEA, LET'S FLUSH IT OUT TOGETHER. AND THAT'S EXACTLY WHAT'S HAPPENING. WE'RE SITTING DOWN WITH A GROUP OF LEGISLATORS FROM BOTH PARTIES, WITH PEOPLE FROM THE GOVERNOR'S OFFICE AND MYSELF, TRYING TO DO JUST THAT. AND WE'RE LOOKING FOR IDEAS AND SUGGESTIONS FROM EVERYWHERE.

Borg: BUT GENERALLY YOU MENTIONED ABOLISHMENT OF TIF, TAX INCREMENTAL FINANCING, WHICH HAS BEEN USED BY LOCAL COMMUNITIES TO FINANCE ECONOMIC DEVELOPMENT. AS DIRECTOR OF THE STATE'S ECONOMIC DEVELOPMENT, WOULD YOU RATHER SEE THAT DONE AWAY WITH AND IT COME DOWN FROM A STATE LEVEL OR SHOULD COMMUNITIES BE ABLE TO KEEP TIF?

Blouin: LOCAL COMMUNITIES NEED A TOOL. WHETHER IT'S TIF OR SOMETHING ELSE, FROM MY PERSPECTIVE AS ECONOMIC DEVELOPMENT DIRECTOR, IS REALLY IMMATERIAL. THEY NEED A TOOL. IF THE LEGISLATURE WERE TO JUST REMOVE THAT TOOL AND NOT REPLACE IT, I THINK THEY WOULD BE DOING DAMAGE TO THE PROCESS. BUT THE DEBATE AS TO WHETHER THAT TOOL SHOULD CHANGE, WHAT IMPLICATIONS IT HAS IN LOCAL GOVERNMENT INVOLVEMENT AND SO ON, IS, IF DONE RIGHT, A VERY HEALTHY DEBATE, WHICH WILL LEAD TO, I'M CONFIDENT, A PRETTY POSITIVE CHANGE IN THE WAY WE DO BUSINESS.

Yepsen: DO IOWANS -- MR. BLOUIN, DO IOWANS REALLY WANT CHANGE? I MEAN I'VE HEARD YOUR BOSS SIT RIGHT THERE AND SAY THE MOST IMPORTANT THING IOWANS NEED TO DO IS TAKE MORE RISKS. NOW, FIRST OF ALL, HOW DOES GOVERNMENT ACCOMPLISH THAT? BUT SECONDLY, DO YOU THINK PEOPLE IN IOWA REALLY WANT THAT? I MEAN WE'VE GOT A PRETTY GOOD DEAL HERE. A LOT OF THESE LITTLE TOWNS ARE NICE PLACES TO LIVE FOR THOSE WHO ARE THERE. I'M NOT SURE PEOPLE IN IOWA REALLY WANT TO MAKE SOME CHANGES HERE, DO THEY?

Blouin: WELL, I THINK -- I THINK WE AS A POPULATION DO; WE JUST DON'T QUITE AGREE ON WHAT THAT MEANS. I USED TO THINK COUNTIES WERE THE PROBLEMS. YEARS AGO WHEN I FIRST STEPPED INTO THE LEGISLATURE, LET'S GET RID OF COUNTIES. PEOPLE LOVE THEIR COUNTIES. THEN I THOUGHT LET'S GET RID OF CITIES. PEOPLE LOVE THEIR CITIES BUT THEY WANT THEM TO COLLABORATE. THEY WANT EFFICIENCIES. THEY LIKE LIVING IN THE DIFFERENT COMMUNITIES THEY LIVE IN. THEY JUST DON'T LIKE THE COST OF IT. THEY LIKE LIVING IN IOWA IN THE VARIOUS OPTIONS WE PROVIDE THEM AS A STATE OF THREE MILLION PEOPLE, BUT THEY CAN'T HAVE THAT UNLESS WE FIND SOME WAY TO DRIVE AN ECONOMY TO ALLOW US TO CONTINUE TO PAY FOR THIS QUALITY OF LIFE WE ALL ENJOY. THAT CHANGE I BELIEVE PEOPLE ARE WILLING TO MAKE, AS LONG AS IT DOESN'T CHANGE THEIR OPTIONS TO LIVE WHERE THEY WANT.

Yepsen: AND I'VE HEARD PEOPLE IN THE DEVELOPMENT INDUSTRY AND IN CHAMBERS OF CONGRESS SAY THE MOST IMPORTANT ISSUE FACING THE STATE IS WORK FORCE. WE JUST DON'T HAVE ENOUGH BODIES FOR -- TO TAKE NEW JOBS AND THE JOBS THAT ARE NATURALLY GOING TO GROW. HOW DOES ANY OF WHAT WE'VE BEEN TALKING ABOUT HERE ACCOMPLISH THE GOAL OF GETTING MORE PEOPLE IN HERE?

Blouin: YOU CREATE GOOD QUALITY, EDUCATIONALLY ROOTED OCCUPATIONS IN THE STATE OF IOWA, AND THE POPULATION WILL COME. IT REQUIRES MORE THAN KEEPING YOUNG FOLKS HERE. IF WE KEPT EVERYBODY IN IOWA BY GUNPOINT AND MADE THEM TAKE A JOB WE KNOW IS COMING JUST THROUGH ATTRITION OF EXISTING WORK FORCE, WE'RE STILL GOING TO BE IN SERIOUS TROUBLE TEN YEARS OUT. WE'VE GOT TO BRING PEOPLE BACK. WE'VE GOT TO ADD PEOPLE TO THE POPULATION WHO'VE NEVER LIVED HERE, BUT WE'VE GOT TO DO THAT BY CREATING OCCUPATIONAL, CAREER-TRACK OPPORTUNITIES THAT GIVE THEM THE COMFORT OF KNOWING THAT THIS IS A PLACE WHERE THEY CAN FULFILL OCCUPATIONAL DREAMS AS WELL AS QUALITY OF LIFE. WE'RE NOT THERE YET.

Glover: THE EARLY PART OF THIS SESSION HAS BEEN DOMINATED BY THE TALK ABOUT THIS IOWA VALUES FUND, THIS FARM BUREAU PROPERTY TAX FUND, THE BORROWING OF TWO BILLION DOLLARS. AT THE END OF THE DAY, IS SOMETHING ALONG THIS LINE GOING TO EMERGE FROM THIS LEGISLATIVE SESSION AND GET YOUR BOSS'S SIGNATURE?

Blouin: I'M CONFIDENT THAT WHATEVER DEVELOPS OUT OF THE LEGISLATURE WILL BE A MAJOR STEP FORWARD. I'M CONFIDENT THERE WILL BE A MAJOR STEP, AND I'M CONFIDENT THE GOVERNOR WILL BE PART AND PARCEL TO THE WHOLE PROCESS. I'VE NEVER SEEN THE KIND OF ATTITUDE THAT EXISTS TODAY IN WATCHING THIS PROCESS FIRSTHAND FOR THIRTY-FOUR SOME YEARS. ACROSS THE BOARD, BOTH PARTIES -- RURAL/URBAN, NEW AND OLD MEMBERS -- WANT SOMETHING TO HAPPEN. THEY WANT IT TO BECOME LAW. THEY DON'T KNOW WHAT "IT" IS YET, BUT THEY WANT "IT" TO HAPPEN.

Glover: SO SOMETHING WILL HAPPEN. IN HIS CONDITION OF THE STATE SPEECH, YOUR BOSS ALSO MENTIONED THE STATE'S INCOME TAX SYSTEM: TOO COMPLEX, NOT COMPETITIVE, NEEDS TO BE SCRAPPED AND START ALL OVER AGAIN. IS THAT GOING TO HAPPEN TOO?

Blouin: IT'S NOT GOING TO HAPPEN THIS YEAR SINGULARLY. I THINK THEY'LL START IT THIS YEAR. I THINK THE LEADERSHIP'S COMMENTS THAT HAVE BEEN IN THE PAPER THE LAST COUPLE OF DAYS HAVE POINTED TO THAT. IT'S COMPREHENSIVE. IT'S GOT TO BE PROPERTY SALES AND INCOME. LET'S LOOK AT IT ALL. THOSE ARE AWFULLY RISKY STEPS. BUT WE NEED TO TAKE THOSE STEPS WHILE WE'RE TRYING TO BUILD A NEW ECONOMY, OR WE'RE ONLY GOING TO BE HALFWAY HOME.

Yepsen: HOW IMPORTANT IS THIS TAX DEBATE? YOU'VE BEEN IN THE DEVELOPMENT GAME. YOU TALK TO PEOPLE IN DEVELOPMENT. THEY SAY IT'S ONLY ONE PIECE OF A LARGER PICTURE. SHOULD WE BE FOCUSING THIS MUCH ATTENTION ON TAX POLICY IN THE STATE?

Blouin: IT'S ONE PIECE. IT'S A CRITICAL PIECE. IT'S A CRITICAL PIECE FROM TWO PERSPECTIVES. OUR TAXES SYSTEM, OUR TAX STRUCTURE, OUR TAX LOAD, MORE APPROPRIATELY, CAN'T CONTINUE TO GO UP, OR IT WILL BECOME A MAJOR BARRIER TO COMPANY GROWTH. SECONDLY, OUR QUALITY OF LIFE IS IN JEOPARDY IF WE DON'T FIND DOLLARS TO GENERATE THE SERVICES NEEDED TO MAINTAIN THAT, AND THOSE DOLLARS ARE TAXES. SO IF WE CAN'T RAISE TAXES, WE CAN ONLY REBUILD THE STRUCTURE AND GROW THE ECONOMY TO GENERATE MORE REVENUE.

Yepsen: WHAT'S MORE IMPORTANT FOR THE LEGISLATURE TO DO, INCOME TAX OR PROPERTY TAX? WELL, ON THE THEORY THAT THEY CAN'T DO IT ALL -- YOU JUST GOT THROUGH SAYING YOU WEREN'T SURE THEY'D GET ANYTHING DONE --

Blouin: PROPERTY TAX IS PROBABLY MORE IMPORTANT. I'M REALLY EXCITED ABOUT THE IDEA OF SUNSETTING THE ENTIRE SYSTEM DATE CERTAIN. THAT KIND OF FORCES US TO RESPOND. FROM THAT DAY ON TO WHENEVER THAT SUNSET IS, WE EITHER, AS A STATE, FIND A SOLUTION OR EVERY CITY AND COUNTY GOVERNMENT GOES OUT OF BUSINESS FOR LACK OF REVENUE. THAT'S A PRETTY GOOD GUN TO OUR HEAD.

Glover: WELL, LEAVING ASIDE THE QUESTION WHETHER THAT'S A GOOD THING OR A BAD THING, YOU JUST SAID THAT YOU CAN'T DEAL WITH THESE TAX SYSTEMS IN ISOLATION. THEY HAVE TO BE DEALT WITH TOGETHER. YOU CAN'T ALTER THE STATE'S PROPERTY TAX SYSTEM WITHOUT WORRYING ABOUT SALES TAXES AND INCOME TAXES. SO HOW DO YOU DO THIS? THIS YEAR WE DO PROPERTY TAXES AND THEN NEXT YEAR WE COME BACK AND WORRY ABOUT INCOME TAXES AND THE FOLLOWING YEAR WE COME BACK AND WORRY ABOUT SALES TAXES. DON'T YOU STILL HAVE THREE ISOLATED SYSTEMS THAT WAY?

Blouin: WELL, DAVID'S QUESTION WAS "WHICH WAS MORE IMPORTANT." I HAD TO MAKE A CHOICE. PROPERTY TAXES, IN MY OPINION, AS AN OVERALL PROBLEM IN THE STATE IS PROBABLY MORE IMPORTANT. I BELIEVE YOU'RE RIGHT; ALL THREE ARE ESSENTIAL. THAT DOESN'T MEAN YOU HAVE TO DO THEM IN THE SAME MONTH. IF YOU LOCK YOURSELF INTO A SUNSET ON PROPERTY TAXES, YOU CAN'T REALLY DEAL WITH THAT ISSUE WITHOUT LOOKING AT SALES AND INCOME.

Yepsen: SHOULDN'T WE BE DISAPPOINTED TO HEAR THE DIRECTOR OF ECONOMIC DEVELOPMENT IN THIS STATE SAY HE DOESN'T THINK LEGISLATURE IS GOING TO DEAL WITH THIS ISSUE?

Blouin: WELL, THEY'LL DEAL WITH IT BUT THEY'LL DEAL WITH IT ON A TIME LINE THAT WILL REQUIRE TWO OR THREE SESSIONS TO GET DONE. DAVID, IF THAT ATTITUDE CAN --

Yepsen: SOME OF US THINK WE MIGHT WANT TO GET SOMETHING GOING IN IOWA A LITTLE SOONER THAN THAT.

Blouin: IF THAT ATTITUDE CAN EXIST FOR THE REMAINDER OF THIS SESSION, NOTHING IS IMPOSSIBLE.

Yepsen: WELL, BUT IT'S A GREAT ATTITUDE, MR. BLOUIN, BUT WHAT HAVE THEY DONE? I MEAN THE SESSION IS A THIRD OVER WITH, AND DEMOCRATS LAST WEEK IN THE LEGISLATURE WERE CRITICAL THAT THIS SESSION IS TURNING OUT NOT TO BE DOING ANYTHING.

Blouin: WELL, I THINK EVERYBODY NEEDS TO HOLD THEIR CRITICISM. THIS IS THE TIME OF YEAR PEOPLE START TO GET FRUSTRATED. THESE AREN'T EASY SOLUTIONS. THESE AREN'T EASY PROBLEMS TO CREATE SOLUTIONS FOR. I DON'T SEE PEOPLE REFUSING TO ENGAGE IN THE DEBATE. THEY'RE JUST ENGAGING IN IT IN AS FRIENDLY AN ATMOSPHERE AS I'VE EVER SEEN. IF WE CAN MAINTAIN THAT, WE'VE GOT A CHANCE TO MAKE SOME MAJOR, MAJOR PROGRESS.

Glover: LET ME TAKE A SPIN ON DAVE'S CHANGE QUESTION. DAVE SUGGESTED THAT THERE IS SOME RESISTANCE TO CHANGE IN THIS STATE. LET'S GO TO FARMING. FARMING IS HISTORICALLY AN INDUSTRY THAT IS VERY, VERY RESISTANT TO CHANGE. EVERYBODY TALKS ABOUT VALUE-ADDED, HIGH-TECH, BIOTECH INDUSTRIES AND THIS KIND OF STUFF. DO YOU THINK THERE'S AN ATTITUDE OUT THERE THAT'S WILLING TO MAKE THE MIND-SET THAT VALUE ADDED NO LONGER MEANS BUILDING A HOG LOT AND PROCESSING PLANT AND IT MEANS SOMETHING MUCH DIFFERENT? IS THAT ATTITUDE OUT THERE?

Blouin: WELL, I THINK THERE'S AN ATTITUDE WITHIN THE DECISION-MAKERS THAT THAT'S GOT TO HAPPEN. THERE'S AN ATTITUDE WITHIN THE BUSINESS COMMUNITY THAT THAT'S GOT TO HAPPEN. I DON'T KNOW WHETHER THAT ATTITUDE EXISTS ON THE FARMS WITHIN FARM FAMILIES.

Borg: BUT WHERE DO YOU SEE THE POTENTIAL --

Blouin: I HAVEN'T HAD THAT MUCH CONTACT TO BE ABLE TO TELL YOU WHETHER IT'S THERE.

Borg: WHERE DO YOU SEE THE POTENTIAL FOR IOWA'S ECONOMIC DEVELOPMENT? IS IT IN VALUE-ADDED, KNOWING THAT WE HAVE PRIMARILY AN AGRICULTURALLY BASED ECONOMY RIGHT NOW? ARE YOU SAYING VALUE-ADDED TO WHAT WE HAVE NOW?

Blouin: LIFE SCIENCES PROVIDES PROBABLY THE GREATEST OPPORTUNITY FOR US BECAUSE OF THE POINT YOU JUST RAISED. MOST OF THAT INDUSTRY REQUIRES A BASIC INGREDIENT IN THEIR PRODUCT THAT COMES OUT OF THE GROUND, AND WE DO THAT AS WELL AS ANYBODY IN THE WORLD. BUT INFORMATION SOLUTIONS DEFINED AS TECHNOLOGY, INSURANCE, FINANCIAL SERVICES, WE'VE GOT A NICHE THERE. IT'S A NICHE THAT CAN GROW AND SPREAD ACROSS THE ENTIRE STATE WITH VERY LITTLE EFFORT, AND WE CAN'T IGNORE IT. ADVANCED MANUFACTURING -- AND PEOPLE FORGET HERE THAT WE'RE TALKING NOT JUST ABOUT ATTRACTING MAJOR, NEW, TRENDY KINDS OF PRODUCERS. WE'RE TALKING ABOUT TRYING TO SAVE HUNDREDS OF MID- TO SMALL-SIZED MANUFACTURERS WHO ARE TRYING TO MAKE THE TRANSITION FROM OLD, ANTIQUATED FACILITIES WITH PROBABLY NOT STATE-OF-THE-ART EQUIPMENT INTO ADVANCED MANUFACTURING. AND IF WE DON'T HELP THEM MAKE THAT CHANGE, THEY'RE GONE AND THE IMPACT ON SMALL-TOWN IOWA WILL BE DEVASTATED.

Yepsen: MR. BLOUIN, WHAT DO YOU WANT THE STATE UNIVERSITIES TO DO? SOME ARE SUGGESTING THAT THEY'VE REALLY NOT DONE ENOUGH, THAT YOU CAN LOOK AROUND AT THE CONDITION OF IOWA'S ECONOMY AND YOU CAN BLAME SOME OF IT ON THE STATE UNIVERSITY SYSTEM. IOWA STATE HASN'T FOUND A CURE FOR THE HOG-LOT ODOR PROBLEM. WHAT'S THE ROLE -- WHAT DO YOU WANT THE STATE UNIVERSITIES TO DO RIGHT NOW THAT THEY'RE NOT DOING IN ORDER TO BUILD A BETTER ECONOMY IN THIS STATE?

Blouin: THEY DO AN INCREDIBLY GOOD JOB ON RESEARCH PROJECTS. I'D LOVE TO SEE THEM JUST BE A LITTLE MORE AGGRESSIVE IN CONVERTING THAT RESEARCH RESULT INTO AN IOWA-BASED COMPANY. A LOT OF BLAME TO GO AROUND. BUT ON THE POSITIVE SIDE, WE'VE GOT TWO PRESIDENTS, DAVID SKORTON AND GEOFFREY, WHO ARE ABSOLUTELY COMMITTED TO MAKING THAT HAPPEN. THE SCIENTISTS, PROFESSORS, AS I UNDERSTAND IT, THEIR WHOLE COMPENSATION PACKAGE AND TENURE PACKAGE IS BASED ON RESEARCH FOR THE SAKE OF KNOWLEDGE. THAT LEADS TO MORE RESEARCH AND MORE KNOWLEDGE. THAT'S A VERY LAUDABLE GOAL. WE OUGHT TO BE FINDING WAYS TO ADD A COMPONENT TO THAT COMPENSATION PACKAGE THAT SPINS IT ONE MORE STEP AND REWARDS THEM FOR A COMPANY THAT SPRINGS UP IN IOWA AS A RESULT OF IT. I'M TIRED OF READING ABOUT POSTER CHILDREN IN SOMEBODY ELSE'S STATE BROCHURE. I WANT TO READ ABOUT THEM HERE. I DON'T WANT TO LOSE THE NEXT GATEWAY. I DON'T WANT TO LOSE TRANS OVA. I WANT THEM TO GROW HERE AND BECOME PART OF OUR BRAGGING RIGHTS.

Glover: MR. BLOUIN, LET'S LOOK AT THE BIGGER PICTURE. AND FEEL FREE TO DISAGREE WITH THE PRECEPT OF THIS QUESTION, IF YOU WANT. BUT IT STRIKES ME THAT IF YOU LOOK AROUND, DEVELOPMENT IS ALMOST ALWAYS LOCALLY DRIVEN. IN A LOCALITY, COMMUNITY WORKS WHEN THERE ARE LOCAL LEADERS WHO CAN PULL TOGETHER AND MAKE SOMETHING HAPPEN. IN COMMUNITIES WHERE THAT LOCAL LEADERSHIP DOESN'T EXIST, IT DOESN'T HAPPEN. IS THERE ANYTHING THE STATE CAN DO TO FOSTER THAT KIND OF LOCAL LEADERSHIP TO HELP LOCAL COMMUNITIES HELP THEMSELVES?

Blouin: I DON'T DISAGREE WITH YOUR PREMISE. THE STATE COULD HAVE THE MOST AGGRESSIVE ECONOMIC DEVELOPMENT PROGRAM IN THE COUNTRY, AND IF LOCAL COMMUNITIES AREN'T PART OF IT, IT ISN'T GOING TO WORK IN THOSE COMMUNITIES. SO YOUR PREMISE IS PRETTY VALID. IN THE PROJECTS AND PROGRAMS THAT I'VE BEEN INVOLVED IN, THAT'S WHAT'S MADE IT WORK. HOW DO YOU GET THEM TO THE TABLE? GO BACK TO WHAT WE OPENED THE SHOW WITH. WE'VE GOT TO GET COMMUNITIES TO BEGIN, IN THE PRIVATE SECTOR, TO TRUST EACH OTHER WITH THAT OLD, ENLIGHTENED, SELF-INTEREST PHILOSOPHY THAT IF IN A REGION WHERE THERE'S SOME COMPATIBLE KINDS OF CONNECTIONS, GROWTH TAKES PLACE IN ONE AREA OF THAT REGION, IT WILL HELP THE WHOLE AREA.

Yepsen: WE'VE GOT ABOUT THIRTY SECONDS.

Blouin: DIFFERENT THINKING.

Yepsen: WE'VE GOT ABOUT THIRTY SECONDS LEFT, MR. BLOUIN. SOMEONE WATCHING THIS PROGRAM WHO WANTS TO HELP THEIR COMMUNITY, WHAT SHOULD THEY DO? I'M PLAYING OFF MIKE'S QUESTION ABOUT ITS LOCAL LEADERSHIP. WHAT DO YOU WANT LOCAL LEADERS TO DO TOMORROW MORNING?

Blouin: I THINK THEY NEED TO RAISE SOME MONEY, NOT DEPEND ON THE COUNTY OR THE CITY TO PUT ALL THOSE DOLLARS IN PLACE. THEY NEED TO GET SOME PROFESSIONALS IN PLACE AND BEGIN TO WORK WITH THE TOWN 5 OR 10 MILES DOWN THE ROAD, AS OPPOSED TO COMPETING WITH THEM.

Borg: YOU'VE GOT A LONG ROAD AHEAD, AND I KNOW THAT YOU'RE ANXIOUS TO GET STARTED. WE'RE OUT OF TIME HERE. THANKS FOR TAKING THE TIME TO BE WITH US TODAY.

Blouin: THANK YOU. DELIGHTED TO BE HERE.

Borg: ON OUR NEXT EDITION OF "IOWA PRESS," WE FOCUS ON THE WORK OF THE IOWA GENERAL ASSEMBLY. OUR TEAM OF IOWA STATEHOUSE REPORTERS WILL BE GATHERED HERE AT THE "IOWA PRESS" TABLE TO DISCUSS THE 2003 LEGISLATIVE SESSION, NOW ENTERING ITS SIXTH WEEK. A REPORTERS ROUNDTABLE NEXT WEEKEND, FRIDAY AT 6:30, SUNDAY AT NOON. AND THAT'S IT FOR THIS WEEKEND'S EDITION OF "IOWA PRESS." I'M DEAN BORG. THANKS FOR JOINING US TODAY.

FUNDING FOR THIS PROGRAM WAS PROVIDED BY "FRIENDS," THE IOWA PUBLIC TELEVISION FOUNDATION... GENERATIONS OF FAMILIES AND FRIENDS WHO FEEL PASSIONATE ABOUT THE PROGRAMS THEY WATCH ON IOWA PUBLIC TELEVISION; AND BY THE IOWA BANKERS ASSOCIATION... FOR PERSONAL, BUSINESS, AND COMMERCIAL NEEDS, IOWA BANKS HELP IOWANS REACH THEIR FINANCIAL GOALS; AND BY THE ASSOCIATED GENERAL CONTRACTORS OF IOWA... THE PUBLIC'S PARTNER IN BUILDING IOWA'S HIGHWAY, BRIDGE, AND MUNICIPAL UTILITY INFRASTRUCTURE.