This blog originally appeared on September 11, 2015 on IowaBiz.com.
For as long as anyone can remember, economic developers in Iowa have touted our state’s stability of government and economy as an important second tier decision motivator [after taxes, workforce and infrastructure] for companies considering locating or expanding here. The argument has been that compared with a number of peer states and regions, Iowa offers one of some of the most predictable, practical and civil state governmental machinery. Too, the state’s economic performance, owing to a diversified economy led by agriculture and manufacturing, has grown steadily if not spectacularly, generally outpacing the US average for at least the last ten years [state GDP grew by 2.9% in 2014, about double the national rate, and per capita income growth was #4 nationally in 2013- the fifth straight year of top 25 finishes in the category].
Iowa’s economy, it’s been said many times, is rarely too hot and rarely too cold, like a mythical baked potato.
The stoutness of Iowa’s economy is an obvious selling point for would-be job creators in our state, but the political stability argument can as nearly as consequential a one. Company leaders and boards of directors rendering decisions on the large-scale deployment of capital inherently consider the political environment into which their investment is flowing. This occurs at varying levels of formality and intensity from organization to organization- from subjective speculation around the meeting table to so-called ‘full-cost’ accounting, which seeks to quantify largely subjective matters like political climate and assign a value to be incorporated into project cost matrices.
Iowans tend to vote their tendencies for divided government. From 1992-2013, the state had a ostensible ‘unified’ or ‘trifecta’ government [one where both legislative chambers and the executive branch are all controlled by the same party] only six times, one of the lowest rates in the nation. Governors in Iowa average ten years in office, longer than most other non-term-limited states. And a passing glimpse at our federal delegation reminds that until the 2015 retirement of Sen. Tom Harkin, Iowans sent one Republican and one Democrat to the Senate for 30 straight years- 3rd longest streak in history.
At a time when a single party controls all branches of government in 31 [!] states and nearly half of all legislatures have veto-proof majorities, Iowa is one of just three [!] states with a divided legislature. Lawmakers here have historically been more than happy to point out that in the face of such bi-partisan power balances, they have made a conscious effort to avoid Washington-style partisan chaos.
And, largely, they’ve been right. For decades, Iowa’s political process has proven a national example of how a politically-divided state can nevertheless produce budgets, policy and leadership in a deeply bi-partisan and civilized way. This track record of political efficiency and pragmatism has proven valuable, as companies routinely cite Iowa’s political environment as a net positive for doing business here.
But now we might mess it up.
Despite what is clearly the better historical judgement of both Iowa voters and their representatives, Iowa, following several split-power legislative sessions full of rancor which have lasted into well into June, faces the very real prospect of a 2016 session more DC than DSM; more cherry blossom than corn cob. A 2015 session during which deep interparty disagreement about education funding sucked all the oxygen out of the proverbial room produced very little in the way of meaningful economic development legislation- in fact, the highest-profile piece of economic development legislation- a tax credit for biorenewable chemical production in Iowa- went down in a tragicomedy of partisan maneuvering. Ask any legislator, bureaucrat or lobbyist to handicap next year’s session and he or she will tell you that the unresolved education funding issue threatens to produce an unusually hyper-partisan environment under the golden dome in 2016. That’s not the Iowa way. The education issue is incredibly important to Iowa and rightly deserves the keen attention of Iowa legislators, but so is the process by which our political leaders in all three branches of government ultimately find agreement.
We’ve seen what sorts of monumental results legislative and executive bi-partisanship can produce in this state, and very recently. The 2013 Iowa General Assembly was perhaps one the state’s most productive ever, with massive property tax reform, a health care overhaul and education reform bills allreaching the governor’s desk and receiving his signature. Such a session of accomplishment proffers economic development professionals across the state sublime material to discuss with clients- not only, so the narrative goes, do our political leaders in Iowa achieve big things in the do-nothing congressional era, but they do it despite a narrowly divided government. That’s the Iowa way.
Have a look at our state flag and remember that the blue color of the left-hand vertical stripe is meant to represent loyalty, justice and truth and that the red color of the right-hand vertical stripe is meant to represent strength. Remind your legislator between now and January that others are watching how they do their jobs and how they interface publicly with their partisan counterparts- that they can be faithful to both the exertion of strength through party loyalty and deliver justice to their constituents in the form of negotiated, enduring results following a respectful debate.
The next job creation deal could depend on it.