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Analysis shows Iowa Fertilizer Co.’s Lee County Project will result in $153 million in Additional State Tax Revenue

Posted on: February 27, 2013
Contact: 
Tina Hoffman, Communications Director
Iowa Economic Development Authority
515.725.3150 or 515.783.8225 (cell)
 
Victoria L. Daniels, Public Information Officer
Iowa Department of Revenue
515.281.8450
 
Analysis shows Iowa Fertilizer Co.’s Lee County Project will result in $153 million in Additional State Tax Revenue
February 27, 2013 – DES MOINES   The Iowa Economic Development Authority (IEDA) yesterday released to the Senate Ways and Means Committee the results of the Regional Economic Modeling Inc. (REMI) analysis for the Iowa Fertilizer Co. project, the $1.4 billion fertilizer plant that is building its facility in Lee County in southeastern Iowa.  The IEDA board awarded incentives to the company last year to locate in Iowa instead of Illinois.  The economic impact analysis, performed by the Iowa Department of Revenue using the REMI tool, is conducted to estimate the change to employment and tax revenues the state of Iowa expected to experience as the result of a project locating within its borders. 
 
"The REMI analysis of the Iowa Fertilizer Co. project speaks for itself," said Debi Durham, director of the Iowa Economic Development Authority (IEDA).  "On the front end, Iowa Fertilizer Co. will inject $1.4 billion of capital investment into our state and create at least 165 permanent jobs and thousands of construction-related jobs.  Now we know that the benefits of that project will serve Iowans for years to come."
 
The REMI report details its findings in four main tables focusing on jobs resulting because of the project, the change in personal income, direct state tax revenue impact and total state tax revenue impact. 
The full analysis is available below, but several key finding resulted from the report, including:
  • The Iowa Fertilizer Project is expected to have vast impacts on employment throughout the area in multiple industries.  Even after the initial construction period, the Iowa Fertilizer Company is projected to give rise to almost 1,900 additional jobs in the state by the end of a 10-year period.
  • The Iowa Fertilizer Project has the potential to create $333 million in additional personal income for the citizens of the state of Iowa over 10 years.
  • The analysis suggests that the state of Iowa will receive an additional $8.8 million in tax revenue directly from the project, after taking into account the state incentives awarded.
  • The effects of the project are broader than just the direct impacts the Iowa Fertilizer Company will bring. The analysis suggests that the ripple effect of the project will mean an additional $153 million to the state’s tax revenue over 10 years.
The Iowa Economic Development Authority provides the Iowa Department of Revenue with information about major projects locating in Iowa.  The Department of Revenue uses a third-party model developed by REMI to analyze the expected impact of projects.
 
REMI is recognized as the provider of the world’s leading regional policy analysis models. The REMI model incorporates aspects of four major modeling approaches: Input-Output, General Equilibrium, Econometric, and Economic Geography. Each of these methodologies has distinct advantages as well as limitations when used alone. The REMI integrated modeling approach builds on the strengths of each of these approaches.
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