ROCK RAPIDS, Iowa – Saying Iowa’s future depends on “the world knowing that we’re open for business,” Republican gubernatorial candidate Bob Vander Plaats on Monday unveiled his economic development blueprint for the state.
Citing the economic success of Israel detailed in the book, “The Start-Up Nation,” Vander Plaats said at the Lyon County Republican Dinner, “As governor, I’ll work to make Iowa the start-up capital of the world.”
He outlined a plan to capture the best features from business incubators around the world, encourage more military veterans to pursue entrepreneurial careers in Iowa, create a favorable tax and regulatory climate, welcome legal immigrants from various countries and aggressively market Iowa as a right-to-work state.
“We also need to seek out former Iowans who have been successful entrepreneurs in other states or countries and encourage them to come home – or at least share their know-how, networks and resources with us,” he said.
Noting a trend of experimentation at business incubators across the country, he said, “I suggest that we adopt their best ideas so we’re attracting and helping start-ups in the technology, environmental sciences and any other innovative realms that an entrepreneur can envision.”
“Business incubators are evolving. The entire business world is evolving. If we’re not aggressively going forward we’re actually falling farther behind. Iowa is missing opportunities every day under Chet Culver; we won’t miss them when I’m governor,” Vander Plaats said.
He continued, “We can’t do what we’re doing now and we can’t rely on warmed-over old strategies that didn’t get the job done. The last thing we need to do is engage in another race to the bottom where we create jobs that Iowans don’t want and can’t afford to live on. We’ve been doing the same things and had the same attitude for decades because we really haven’t had a governor who’s challenged us to do and be more. We need to shake things up.”
The Sioux City business consultant noted that part of Israel’s success is that it may be the only country in the world that seeks to increase immigration.
“It’s been said that a nation of immigrants is a nation of entrepreneurs. I know it will be outside the comfort zone of some Iowans but we must encourage legal immigration to use state resources to attract new ideas, new energy and real growth,” he said. “I talk often about doing more to keep our young people here and attract them back to Iowa when they’ve left, but we also need to attract people who’ve never been to Iowa before. They will bring a new energy, and frankly, that new energy will be attractive to young Iowans.”
He continued, “Israel has a cabinet-level person with a dedicated ministry responsible for welcoming and encouraging immigration. As governor, I’d encourage cutting-edge entrepreneurs to legally immigrate to Iowa. We want to identify the sharpest minds that are developing concepts and products that hold big economic promise.”
He added that the Israeli Ministry of Education provides a clearing house of overseas degrees. Vander Plaats said he would create a similar strategy in Iowa by reassigning personnel within state government. The approach could resolve rural health professional shortages, he said.
“Current and past governors have tried to simply take businesses and people from other states. It’s time to think globally and recruit globally. Having people who speak the different languages of the world – in addition to English – would make us far more competitive in this global economy,” he said. “We’ve talked about trying to teach our kids Mandarin or Spanish, that’s all well and good and we shouldn’t abandon those efforts, but why not attract successful people here who already know how to speak those languages, people who have business networks and connections in other parts of the world, people who will be a bridge for Iowa to new markets?”
Vander Plaats said he would spur growth by eliminating the corporate income tax, reducing property tax burden on businesses and cutting the state’s capital gains tax rate to 3.85 percent to bring it into proportion with the state’s top tax rate of 8.98 percent.
“I’ve said for months that we need to eliminate the corporate income tax and that we should take the burden of mental health funding off corporate property taxpayers,” he said. “The top federal tax rate is 35 percent and the federal capital gains rate is 15 percent. Clearly, we’d benefit from a reduced federal capital gains rate to stimulate economic activity and growth but I believe we need to take action at the state level, too. My plan would be to cut the state capital gains tax. A rate reduction usually spurs revenue gains because it inspires taxpayers to realize gains they otherwise would not and invest in new start-ups. And, reducing Iowa’s capital gains rate from almost nine percent to below four percent would be a meaningful tax reduction for many.”
Vander Plaats underscored the importance of holding the line on public-sector spending, saying he would revisit the $290 million in spending reductions proposed by House Republican in the recently concluded legislative session. He said his economic development efforts would also recognize the value of local development organizations and existing businesses and ensure that the state’s current citizens are an educated and prepared workforce for the future.
“Just as we need to move forward with innovative approaches, we also need to step back and remember to ask the right questions at the local level so we have better coordination with state development efforts: What do we do best in our community. How can we best adapt to the changing economy? What do we really need to grow – a better understanding of our challenges, more resources, new solutions or even just better organization?” he said. “Any business owner will tell you that you make more sales to repeat customers than new ones. The same is true, at least in the short run, with economic development and jobs creation. Existing businesses are going to generate more jobs for us than new ones so we need to do more to help existing businesses and revitalize our local main streets.”
Vander Plaats said he would work with commodity groups and other stakeholders to identify emerging trends in agricultural markets and set a goal of developing five new markets each year. As governor, he also would encourage the state’s business leaders to take a higher profile in promoting a pro-growth agenda.
“Especially in times like these, business executives are focused on keeping their own businesses going. But we’ve seen a culture arise recently where business leaders have been vilified because of the actions of a few bad apples on Wall Street and elsewhere,” he said. “Business leaders in Iowa are honest, hard-working, creative people. I want to see them more engaged in solving the problems of our state and moving beyond that to help us take that quantum leap to the next level of success.”
He reiterated his September pledge that he would work to create a 21st Century infrastructure in Iowa in which wireless technology has a central role. He said he would also emphasize road and other transportation improvements that will encourage economic development.
Vander Plaats said he would encourage more state efforts to help military veterans start their own business, too.
“I’m a business leadership consultant and one thing I’ve always appreciated about our armed services is the ability to turn young, raw recruits into leaders and to continue to build leadership skills in all personnel, not matter how high they advance in rank,” he explained. “Veterans understand the practical ways to manage for results. Veterans can handle steep learning curves and have a proven ability to work with others and learn new concepts and skills. And, they obviously know how to perform under pressure. Many veterans have benefited from world travel and they’re tech-savvy because of the state-of-the-art equipment they’ve worked with. We need to welcome Iowa veterans home and nurture and harness those assets.”
He concluded, “Let’s get government out of the business of picking winners and losers, attract and keep the best and brightest to Iowa and with an intentional entrepreneurial mindset, make Iowa the next economic great economic engine.”
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