A 4.5 hour public hearing on state tax credits

A handful of the governor’s state agency directors sat at a table in the Urbandale Public Library this afternoon as more than 100 people sat or stood for the four-and-a-half-hour-long public hearing on state tax credits.  I stood in the room for nearly three hours, listening to the testimony, then I drove back to the newsroom to write a story.

The subject matter was/is heavy, but there were a few light moments during the hearing.  For example, Dave Roederer of the Iowa Chamber Alliance (a former aide to Terry Branstad when Branstad was governor) joked that if you ran the state like a business, there’d be just two agencies:  the Department of Revenue and the Lottery — because those are the only revenue-generating parts of state government.

Fred Hubbell, the acting director of the Iowa Department of Economic Development, joked with Tammy Shutter of the Iowa Motion Picture Association as the lights went down in the room so everyone could see the screen on which her power-point presentation would be shown.  “I hope this was locally made,” Hubble quipped. Shutter said yes, it had been made in the IMPA’s office in the East Village of Des Moines.

Governor Culver’s roster of agency directors questioned Iowa Business & Industry Association president Mike Ralston for what seemed like the longest period of all those who testified.  Ralston, as you may know, was director of the Iowa Department of Revenue during Governor Vilsack’s tenure.  “What do I have to say to make you quit asking me questions?” Ralston joked as Hubbell started to ask another question of him.  The crowd had been sitting quietly for nearly three hours by this point and laughed heartily for a brief time before the questions and answers turned back to the serious subject at hand.

You may read the “State of Iowa Agency Reports on Tax Credits” here.  That volume of information was released earlier this week (when I was on vacation).

Tammy Shutters, program director of the Iowa Motion Picture Association, began her testimony when hour two of the hearing began. Listen to Shutters presentation.   She spoke for almost nine minutes, then Department of Cultural Affairs director Cyndi Peterson asked Shutters about the tax credits available in other states.

“If you look at Michigan, which is the other state that has seen a lot of growth in recent years, they offer a 40 percent tax break and then if productions go to core communities…then you can get an additional two percent.  Iowa’s program was the most generous,” Shutters said. “I mean, I think that we really wanted to make a mark.  We were very assertive, very competitive and it got us attention and it was bringing the programs here.  New Mexico has a 25 percent tax break.  Louisiana has a 25 percent investor tax break and then they have multiple other tax incentives…so there’s a lot of ways that you can work this.  You know, I think when we say it needs to be competitive, you know, there’s lots of ideas.  I mean, ideas that we have thought of is that you have a beginning tax incentive and kind of, like Michigan, you set a parameter for how much on-the-job training, OK? Then, add another five percent…so it can be graduated.”

In response to another question, about an upfront audit that might be done of applicants for the film tax credits, Shutters said: “We think that we can be more picky with awarding these tax credits to these productions and to look at that upfront audit and measure: these people are committing to training this many Iowans, hiring this many Iowans and spending ‘x’ amount of dollars in this state.”