High property taxes in Des Moines, the duplication of government services across Central Iowa and the loss of manufacturing jobs are issues that need considerable attention, according to the respondents in the Des Moines Business Record’s annual survey of business owners, leaders and managers.

They were mostly content with the status of the Grow Iowa Values Fund – although the Legislature hadn’t approved a final action for 2005 at the time of the poll – and optimistic about the future of Des Moines’ bid to increase downtown housing.

The survey was sent electronically to the 3,400 subscribers of the Des Moines Business Record Daily, with about 350 responding.

Property taxes

When asked if Des Moines’ property tax structure is a significant problem, 57 percent of those responding said “yes.” Many suggested changing the rules so that non-profit organizations, government agencies and churches would no longer be exempt from property taxes. Some said the suburbs should chip in to the Des Moines budget because suburban residents benefit from facilities such as the Science Center of Iowa and the Iowa Events Center, and a couple of people called for a “wheel tax” to be paid by workers who commute into the city. Relatively few said the city should cut its spending.

Gary Hagan, marketing coordinator at the Des Moines International Airport, said: “Sometimes a city needs to stand on its own two feet as opposed to offering huge tax abatements to lure businesses to a community. I don’t know if I’m in favor of totally abolishing the tax abatement, but I feel that Des Moines has a lot to offer businesses strictly on its own merit.”

Rose Wazny, who works in the Community Development Division of the Iowa Department of Economic Development, said Central Iowa should adopt “a shared taxing system modeled after Dade County, Fla. Des Moines carries the burden of regional facilities and state government.”

Developer Tim Urban offered a specific plan: “The one-cent sales tax applied to reduce tax should be rebated to all cities in Polk County based on total taxable and tax-exempt valuations.”

Sharing services

No contest here. Although the proposal to merge the Des Moines and Polk County governments failed last fall, 90 percent of the respondents said it’s important for Central Iowa’s governing bodies to find ways to share services.

Most recommendations for doing that were general or simply mentioned fire, police and emergency services. However, a specific answer came from Jaclyn Fleming, a retired vice president at AAA Motor Club: “The western suburbs have an excellent model for sharing public safety and recreational services,” she wrote. “Information technology, human resources and a centralized approach to purchasing would be another good place to start.”

Values Fund

We asked about the Legislature’s action on the Grow Iowa Values Fund even though final action hadn’t been taken; a package of about $35 million was still on the table. In our survey, 71 percent were pleased with the effort that moved that bill near approval.

Those who favored it said the infusion of public money into private enterprise benefits the economy in general, not just the direct recipients. “These types of activities are vital to the future of the state,” wrote Al Lorenzen, a senior vice president at Fidelity Bank.

Values Fund opponents argued that government should not be “in the business of picking winners and losers” and that the process should not favor big businesses over small ones.

More than any other topic, the Values Fund prompted several survey takers to write that they didn’t know enough to offer an opinion.

Downtown housing

Proposed residential projects dot the map of downtown Des Moines; some are under way but several have run into one delay after another. However, 78 percent of our respondents think the push for downtown housing will succeed.

They used optimistic words such as “vibrant” to describe what they think the area can become in the next few years. “With more residents, downtown should be more suitable for restaurants, stores and other businesses, which will draw more people,” wrote Jim Parker, director of risk management for MidAmerican Energy Co.

Some predicted a family-friendly atmosphere, but others weren’t so sure about that. One respondent expects only “the trendy and wealthy retirees” to become downtown residents, and Mick Barry, a vice president at Mid America Recycling, remarked, “I’m not sure that downtown living is an Iowa way of life. We are family oriented and need yards and space.”

The question also brought a few comments about the way downtown housing is being handled by community leaders. “The city and county need to stop feeding money to certain developers,” wrote Chris Gunnare, general manager of the Suites of 800 Locust. “Instead, use the funds to change the package for all; right now they are only dealing with certain people who hold the cards.”

Air travel

On a scale of 1 to 5, only 11 percent of those polled place Central Iowa air service in the top two categories. Forty-five percent rank it in the bottom two levels. The most frequent suggestion for improvement? Get Southwest Airlines in here.

“It’s getting easier to travel economically out of Des Moines,” wrote Fleming, the AAA Motor Club retiree. “But, from a tourism and convention viewpoint, it still is costly and hard to get people in and out of town.”

Several respondents said the pricing, scheduling and limited non-stop destination choices have a somewhat harmful effect on business here. But at least one person noted the plentiful array of corporate jets at the airport and suggested that business-related criticism of air service is mainly an emotional argument.

Manufacturing losses

Manufacturing, a traditional ingredient in any metropolitan region’s economy, continues to drain away from Central Iowa, and 39 percent of our respondents see that as a “very important” issue; 32 percent rank it just one notch lower on a 1-to-5 scale.

Supporters of manufacturing talked about the importance of a diverse economy, one that can ride out low spots in one sector because of the strength of another. Some mentioned the need to provide jobs for those who aren’t cut out for white-collar work.

“Manufacturing is a key component to a strong state economy,” wrote Amy Blaess, director of marketing at Jerry’s Homes Inc. “When we lose manufacturing, employees are working two or three jobs to compensate for the loss of one. Quality of life goes down, and it dominoes to other businesses and industries.”

On the other side of the scale, some respondents said it was time to move on and stop competing with lower-cost manufacturers overseas.

“We have been transforming to a service-oriented economy for decades,” wrote Brendan Comito, chief operations officer at Capital City Fruit Co. “Manufacturing is now being handled by the developing countries.”

The loss of manufacturing is inevitable, wrote Charles King, senior vice president at Medicom Communication Corp. “We should develop replacement sectors – biochemicals, for example, and energy. Surely we can find a way to reduce the cost of refining new energy sources.”

Other comments

Given a chance to bring up other topics, Business Record poll-takers offered a range of opinions. Here’s a sampling:

“I can not believe how much time our state legislators spend arguing about laws that affect little. And how they cave to special interest groups like the Newton race track. Please contact me when the track makes a profit. I want to be the first to know.” – D. Bryan Shiffler, manager, Shiffler Associates Architects P.L.C.

“Iowa economic development institutions (IDED, Greater Des Moines Partnership) do a poor job of addressing the needs of small, growing businesses. Until they do, we’ll not reach our full potential as a region or state.” – Kathryn Dickel, an organizer of the Iowa Entrepreneurs Coalition.

“The media should ask elected officials tough, religion-oriented questions like, ‘If you believe in the imminent rapture, how can you be trusted to protect the environment long-term or do the budget?’” – Jonathan Wilson, attorney with Davis, Brown, Koehn, Shors & Roberts P.C.

Local economic outlook fairly bright

Respondents to the Business Record’s 2005 survey are optimistic about their companies’ prospects in the next 12 months, though perhaps slightly less so than they were a year ago. And when it comes to the U.S. economy, they’re not expecting anything spectacular.

The informal, unscientific poll of a wide range of people involved in local business found a lukewarm opinion about the national economy. On a scale of 1 to 10, 76 percent of the responses clustered in the range from 4 to 7. Only 2 percent gave it the strongest possible rating.

Closer to home, 63 percent expect their companies’ revenues to grow in the next 12 months, a third see the figures staying level and 4 percent are bracing for a decline. It should be noted that some of those questioned are decision-makers in their companies and others are not.

Hiring prospects appear strong, as 84 percent said they plan to increase the size of their workforces. However, only 45 percent plan on making significant capital investments.

A year ago, the Business Record survey found that most respondents expected increases across the board, in revenues, staffing and capital investments.