Des Moines, Iowa – A state audit has found millions of dollars worth of state grants and loans to businesses that promised to build or expand operations in Iowa have so far yielded a fraction of the jobs that were promised.
The audit covered an 11-year period. State officials signed almost a thousand contracts with businesses, awarding nearly 310-MILLION dollars to companies during that time frame. The businesses promised to create or retain more than 57-thousand jobs in return. The audit found about 80 percent of the promised jobs have not materialized yet. Plus, the audit noted state officials need to do a better job verifying whether businesses are actually creating new jobs. State Auditor Mary Mosiman.
A spokeswoman for the Iowa Economic Development Authority says the audit includes the years of “the great recession” and the administrations of three different governors and six agency directors. The audit released on Wednesday is a follow-up to a 2007 audit evaluating state economic incentive programs. Mosiman is recommending that the Iowa Economic Development
Authority consult with the legislature to improve the tracking and verification of its grants and loans.
For example, the audit raises questions about whether the Iowa Economic Development Authority is getting state grant money back when businesses fail to fulfill job-creation promises. Fewer than 12-thousand jobs have actually been created or retained by the companies that got state grants and loans from mid-2003 through the middle of 2014. Tina Hoffman of the Iowa Economic Development Authority says “a lot of individual projects have been successes” and others “in the building phase” will account for more jobs. Mosiman says policymakers — not auditors like her — are the ones who’ll decide whether these economic incentive programs are effective.
The spokeswoman for the Iowa Economic Development Authority says her agency is constantly looking for ways to make state incentive programs more effective. And she notes the agency recently has been using state tax credits more often as part of its incentive portfolio.