Progress Iowa: Apple Deal Ripped In Iowa And Around The Country

Image (1) progress-iowa.jpg for post 17381RE: RELEASE: Business leader: Apple deal gets an ‘A’ for return on investment

Matt Sinovic <>

Thursday, August 31, 2017 3:14 PM

How do you know the Apple deal isn’t being received well?

Less than an hour ago, the Governor’s office felt compelled to send a press release (included below my signature) touting the deal with a column written by someone who was listed by the Des Moines Register as one of the 50 ‘most wanted’ Republicans prior to the 2016 caucus — and they tried to pass it off as a ‘nonpartisan’ analysis.

Thankfully, Iowans aren’t buying it.

The Apple boondoggle will continue to deplete our state budget at a time when we are already struggling to scrape by, and when education and other public services have seen one cut after another. But you don’t have to take my word for it. Here are just a few of the local and national reactions to this terrible deal for Iowa taxpayers:

Des Moines Register: Apple played Iowa for suckers and we let them do it

by Daniel Finney, 8/31/17

“The entire state budget is about $7.2 billion, and we’re giving away nearly twice that in a single year with deals for companies that can and should pay their own way.”

Cedar Rapids Gazette: Gov. Siri will handle your data center query

by Todd Dorman, 8/31/17

“After giving away billions of dollars in revenue over the past 20 years in special interest cuts, breaks and credits, when will we finally say enough is enough?”

LA Times: Apple breaks new ground in squeezing locals for huge tax breaks while offering almost no jobs

by Michael Hiltzik, 8/25/17

“Waukee and the state are giving Apple about $208 million in tax abatements. For that, they’re getting a plant that will employ a permanent workforce of 50 people.”

“Fifty. That works out to $4.16 million per job. At prices like that, analysts at the subsidy-tracking think tank Good Jobs First have observed, “taxpayers will always lose.” That’s because there’s no way the new employees will pay that much more in state and local taxes than the public services they and their dependents consume.”

LA Times: Iowa’s handout to Apple illustrates the folly of corporate welfare deals

by Michael Hiltzik, 8/29/17

“We were highly skeptical of this deal when it was announced Aug. 24. In the fullness of time, we’ve subjected it to closer scrutiny. And now it looks even worse.”

And for those interested in economic development that doesn’t bankrupt Iowa’s future, I recommend reading The Real Path to State Prosperity, published by the Iowa Policy Project.

Below is the full press release sent by Governor Reynolds’ office.

Feel free to reach out with any question or additional comment.

Matt Sinovic

Executive Director | Progress Iowa



———- Forwarded message ———-

From: Press Releases from Iowa Governor’s Office

Date: Thu, Aug 31, 2017 at 2:20 PM

Subject: RELEASE: Business leader: Apple deal gets an ‘A’ for return on investment


Governor Kim Reynolds « Lt. Governor Adam Gregg

FOR IMMEDIATE RELEASE: Thursday, August 31, 2017

CONTACT: Brenna Smith,

(515) 281-5211

Business leader: Apple deal gets an ‘A’ for return on investment

(DES MOINES) – John Stineman, head of the nonpartisan Iowa Chamber Alliance, penned a column in The Des Moines Register Thursday laying out why last week’s Apple announcement is not only great for the state’s reputation as a worldwide technology destination, but also is a sound investment by state and local leaders.

From the column:

Let’s look at the facts.

·         Apple pledged a $1.3 billion investment to build a high-capacity data center that will start with two buildings (totaling 400,000 square feet) with potential for more. The data center will employ 50 Iowans directly, and according to Apple will create more than 550 construction and operation jobs (a conservative estimate compared to most data centers).

·         The State of Iowa pledged $19.65 million in tax-credit incentives to help bring the deal in the door.  

·         The City of Waukee abated the property taxes on the project by 71 percent for 20 years, totaling $187.44 million in abated property taxes.

·         All told, it’s a total of $207.8 million in state and local incentives and a total of $1.3 billion in investment in Iowa.


For starters, this deal doesn’t cost Waukee or its taxpayers a single penny. The “investment” by Waukee is foregoing only a portion of a massive increase in its tax base. The proposed Apple site is currently used as farmland, and is taxed as such, bringing in less than $100,000 annually. Once Apple purchases the site, Waukee will yield $3.75 million annually in property taxes from the same land. That’s $74.9 million in new property taxes during the abatement period. And in the first year after the abatement, the city will get $13.2 million or more per year — assuming no increase in valuation.

The net cost for all of this for Waukee? Zero. It is literally all upside. 

The decision to award $19.65 million in state incentives is not easy. It never is. It’s the taxpayers’ money. And unlike Waukee’s “all upside” proposition, for the state it’s a strategic investment.

Gov. Reynolds had to examine what the return on investment would be for all Iowa taxpayers.

It’s not just about 50 high-quality jobs. It’s about spurring economic activity through a capital-intensive project to create more jobs, more investment, more business and consumer spending, and more overall growth. The growth the project generates needs to be able to pay the taxpayers back with a demonstrated return on the taxpayers’ investment.

The governor knew that the project was guaranteed to generate no less than $19.65 million in sales and use tax — so the taxpayers are made whole just in the construction phase of the data centers.

Read the full column here.


About Dave Bradley

retired in West Liberty
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