In the past month, several groups with very different interests have proposed ideas to make Iowa a more attractive and prosperous place. These plans are now under debate at the state Capitol.

The Iowa Farm Bureau Federation throws around the biggest numbers of any of the groups. Its State Tax Increment Renewal proposal would eliminate the state’s 2,000 local and regional tax increment financing zones.  

Money from the proposed consolidation of the property tax stream could be used as collateral to back a sale of bonds that is expected to generate $2 billion. The proceeds could then be matched with money from the federal government and from private sources. The Farm Bureau wants to sell the bonds now, at a time when interest rates are low.

The plan promises property tax cuts of $20.5 million a year, and could deliver annual savings of as much as $43.75 million. With the savings, the Farm Bureau wants to use $400 million to rebalance inequities that result from tying school funding to sales taxes. That would help rural areas, which typically don’t have as much retail sales as urban areas do.

The remaining money could be used to pay off existing debt, fund new infrastructure projects such as renewable energy and provide tax credits for some specialized types of agricultural products.

The Iowa Chamber Alliance, a collection of 17 of community development groups, including the Greater Des Moines Partnership, the Cedar Rapids Area Chamber of Commerce and the Iowa City Area Chamber of Commerce, delivered a four-part plan on March 10. The so-called balanced approach would cost $830 million over 10 years. It relies largely on proceeds from gambling.

The first part of the proposal would focus on developing a road map to help decision makers focus on Iowa’s life sciences, advanced manufacturing, financial services and information-related industries. More resources would be given to the Iowa Department of Economic Development, including an additional $10 million a year to market the state. Research parks and small business development centers at colleges and universities would get more money, too.

The chambers are focusing on the state’s infrastructure. With more people moving to Des Moines and other large cities in the state from rural areas, the chambers want to change the way tax money is spent on roads. Under their plan, more money would go to roads that have heavier use. Over 10 years, about $500 million would be spent on the state’s roads.

The current road tax formula was put in place 53 years ago. The group wants to rewrite Iowa’s property tax code by July 1, 2005, and create a two-tiered flat tax on personal income.

The streamlining and simplification would extend to government itself. Iowa contains 1.04 percent of the U.S. population but has 6.89 percent of the nation’s state and local government.

“Iowa has more layers of government than any other state in the nation, and more government per capita that any other state with only two exceptions – North Dakota and South Dakota.” reads a brochure touting the Iowa Chamber Alliance’s plan.

The chambers want to continue using tax increment financing, and they want to give an additional $15 million each year to both the Vision Iowa and the Community Attraction and Tourism programs. To pay for it, $35 million would be swept from casinos and racetracks annually, along with $48 million from the Iowa Lottery.

Three days after the chambers presented their plan, Iowa Independent Bankers, an association of community bankers, weighed in with one of its own, stressing development at the local level. Tax increment financing ought to be “reviewed” without centralizing funding or administration, according to Larry Winum, president of Glenwood State Bank and chair of the association’s economic development program.

“Overall, I want to be certain that our local financial expertise is included in order to create the best economic development plan for all Iowans,” he said.

The state needs to harness more private money and boost incentives for lenders to extend credit to businesses. To that end, the bankers want the state to create a $50 million backstop for bad loans.

Des Moines Business Record staff writer Michael Lovell writes a weekly column on business issues affecting Greater Des Moines. He appears on WHO-TV on Sunday mornings to talk about business trends. Contact him at 288-3336 o by e-mail at michaellovell@bpcdm.com.