The Apple of Iowa’s eye



You may have heard that the state of Iowa and city of Waukee are giving more than $200 million in incentives to Apple Computer to locate a new data center here. The highly automated facility, which will host Apple’s computer servers, will employ 50 people, probably less than the number of employees in the Apple store in Jordan Creek mall. That works out to $4 million per job.

That got me to thinking. Will the state make that offer to every business in the state? At that rate, with 10 employees here, The Storm Lake Times should receive $40 million from Gov. Reynolds and her generous friends in the legislature.

It’s in the same league with the $300 million or so Iowa gave to the Egyptian company to build a fertilizer plant in southeast Iowa that employs 200 people. That works out to just $1.5 million per employee. With inflation and everything, the price tag is greater now.

So that’s the range that Iowa is willing to pay to attract new workers.

Never mind the fact that these projects will take decades to return the investments to the state in tax collections. Or that they will use gazillions of gallons of water that will starve our underground aquifers. Or the huge amount of electricity they will use that will force up electric rates for the rest of us. To make up the shortfall we’ll just cut aid to our schools, won’t hire state troopers and quit inspecting nursing homes.

No, the important thing is that companies like Apple, which has more than $250 billion in cash, most of it tucked away in foreign countries where it can avoid paying taxes, are free to exploit rubes like us Iowans who will do anything in the name of economic development.

We’re not the only suckers in the Midwest. Wisconsin has offered Foxconn, the Chinese electronics giant, $3 billion to locate a plant in Janesville where it will most likely manufacture Apple iPhones.

Now I don’t begrudge big companies like Apple the opportunity to save money by playing states against each other. That’s smart business. Especially if the states are dumb enough to be suckered into it.

I like Apple. I made money on it when I bought and sold its stock back in the 1980s. It makes good products. I typed this column on an Apple computer and text my kids across the country on an Apple iPhone.

I don’t have an MBA degree, but it just doesn’t make much economic sense when Iowa, which is facing a budget deficit of around $150 million this year — nobody knows for sure, including our governor and legislators — can afford to throw around hundreds of millions of dollars in money it doesn’t have.

The answer seems to me that Congress pass a law making it illegal for governments to offer these enticements that play the taxpayers of one state against the others.

In the meantime, I hope that Gov. Reynolds or Debi Durham, director of the Iowa Economic Development Authority, can advise me when The Storm Lake Times can expect our check for $40 million. We have payroll checks to write and can sure use the money.