Iowa Governor Branstad Affirms $25 Million Tax Break, As Promised

July 22, 2013 08:07 AM
 

"In order to find a fair and competitive situation, we felt this was absolutely essential," said Iowa Governor Terry Branstad in reference to a 25 million dollar tax credit allowed to Orascom Construction Industries (OCI), the parent company of the Iowa Fertilizer Company. The original deal between the state of Iowa and OCI had $25 million tax breaks for both this year and next year written in. Branstad recently penned a letter to OCI leadership affirming the breaks, assuring them that Iowa would keep its word.groundbreaking1 029

Opponents of the Wever, Iowa project say the Governor has given too much away in his bid to lure OCI to Iowa away from sites in Illinois. Governor Branstad said, "They (OCI) will be paying about 50 million dollars in future taxes every year. That's money that we would not have gotten if they had gone to Illinois. And, by the way, if the legislature had reduced the corporate income tax as we had requested last year, this would not have had to happen. We told (OCI) we know that at 12% Iowa's corporate tax is the highest in the country. It's uncompetitive, so we had do to something."

Construction continues in Wever, and the Iowa Fertilizer Company expects to flip the switch to "on" late in 2016. Opponents of the project still don't like it, but Governor Branstad and officials at the Iowa DNR and Department of Agriculture are convinced that, upon completion, the benefits of increased fertilizer production capacity and a 50 million dollar raise to the state's tax revenue stream will outweigh the upfront expense.


Photo credit: D. Michaelsen, Inputs Monitor 

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