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Values Fund Report is Clarified

Development Director Says 59% of Pledged Jobs Have Been Created

Dave DeWitte

The Gazette

June 20, 2006

[Note: This material is copyright by The Gazette, and is reproduced here as a matter of "fair use" for non-commercial, educational purposes only. Any other use may require the prior approval of The Gazette.]

    CEDAR RAPIDS — The first attempt by state officials to independently verify the economic impact of Iowa Values Fund shows that businesses have so far created only 59 percent of the 13,506 jobs they pledged under the program.

    Former IDED Director Mike Blouin’s flaunting of Values Fund’s job creation statistics was attacked by rivals in his unsuccessful bid for the Democratic gubernatorial nomination.

    Blouin campaign ads said the Values Fund created or retained 25,000 jobs. State Rep. Ed Fallon and Secretary of State Chet Culver challenged the validity of the numbers. Culver went on to win the nomination.

    IDED Director Mary Lawyer presented the state’s latest estimates at a meeting Monday at the Cedar Rapids Country Club of the IDED Board Due Diligence Committee.

    Values Fund projects have so far created 8,013 of the 13,506 pledged jobs, or 59 percent of the jobs pledged, Lawyer said.

    Companies have invested $1.64 billion of the roughly $2.18 billion in capital investment, or roughly 75 percent of the amount they pledged.

    Making some last-minute corrections to a freshly printed IDED report on the topic, Lawyer said the numbers aren’t perfect.

    The IDED staff tried to reconcile job-creation numbers submitted by the companies with payroll information they are required to provide the state for tax purposes using electronic means. That didn’t work in many cases.

    Fallon said Monday that the report’s findings indicated state officials have either been deliberately vague about the program’s impact, or deliberately misleading.

    ‘‘I’m surprised they’re that good, to be honest,’’ Fallon said of the statistics. State Auditor David Vaudt, called on by Fallon to audit the program, has agreed.

    Blouin said he was not surprised at the IDED findings.

    ‘‘You don’t overnight build a facility and hire everybody,’’ Blouin said. ‘‘These were mostly three- to five-year contractual commitments.’’

    Lawyer said 335 projects were awarded Iowa Values Fund assistance between July 1, 2003, and Dec. 31, 2005, the period covered by the report. Of that number, 24 projects didn’t go forward for various reasons. They had pledged 1,757 jobs.

    An earlier report by the state had relied on job creation and capital investment numbers provided voluntarily by the assisted companies, with no independent verification.

    Iowa Gov. Tom Vilsack welcomed the audited numbers, saying the Values Fund is one of the reasons Iowa ‘‘is adding jobs faster than any other state in the Midwest and currently has a record number of employed Iowans.’’