Consultant: Incentives Needed for Iowa Business

By George C. Ford

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By Becky Ogann

Story Created: May 6, 2010 at 3:58 PM CST

Story Updated: May 6, 2010 at 3:58 PM CST

DES MOINES - A Chicago consultant who advises businesses on where to locate says Iowa needs to rework its incentive programs and improve its corporate and individual income tax policy.

Brent Pollina, vice president of Pollina Corporate Real Estate Inc., was the keynote speaker for the 25th annual Smart Economic Development Conference Thursday in Des Moines.

Pollina annually prepares a ranking of pro-business states. Iowa was ranked No. 20 in 2009, getting high marks for being a ”right to work” state and its response to new companies looking for a location to expand.

Pollina said Iowa received an “F” grade for its corporate income tax and its individual income tax rate. He noted that the state is ranked 45th in terms of its corporate income tax rate and 46th in the nation for its individual income tax rate.

“Decision makers look at the corporate income tax rate because it impacts the company’s bottom line,” Pollina said. “They look at the individual income tax rate because it affects them personally. It’s also a factor in recruiting people from other states.”

Pollina rated Iowa’s economic incentives as average or a “C” ranking, saying the state needs to overhaul them, “starting from scratch.”

“You need to look at other successful states like Virginia, Georgia, Nebraska and the Carolinas to see what has worked for them,” he said. “You need to have some programs on the books, but they need to be flexible to meet the specific needs of a business.”

Pollina said Iowa puts too much emphasis on responding to new businesses locating in the state and not enough focus on retaining existing businesses and helping them expand their operations. He said regional organizations like Priority One in Cedar Rapids and the Iowa City Area Development Group are right on track with frequent visits to local companies and corporate headquarters to solve small problems.

“When they get to the point where companies are calling a site selection consultant like me looking for their options, it’s often far more costly to keep them in your community,” Pollina said.

“Right to work” is a “fatal flaw” for many states, according to Pollina.

“Companies use it as a measure of union activity,” he said. “I have clients who refuse to even consider a state if it’s not a right-to-work state. You are blessed here in Iowa and you need to defend that status.”

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