Google seeks $19.8M tax break in Iowa

Google needs a tax break like Bill Gates needs food stamps, yet that isn’t stopping the search giant from asking for $19.8 million in “economic development incentives” from Iowa to build a $1-billion expansion of its growing data center facility in Council Bluffs.

And, well, why not ask? The company has already been given $16.8 million in tax breaks to build out the various stages of the existing Council Bluffs facility, which opened in 2007.

According to this Omaha World-Herald report, the latest tax break is expected to be approved by the Iowa Economic Development Authority and the Council Bluffs City Council with little or no opposition.

In addition to 2,000 ongoing construction jobs, the finished facility is supposed to carry 70 full-time “qualified” positions, with qualified being a salary level that wasn’t specified in the story. That may not seem like a lot of jobs for $36.6 million in tax breaks, but the local officials speak glowingly of having an employer of Google’s stature in town – who wouldn’t? -- and Google, on its website, isn’t shy about extolling its virtues either:

Since 2009, we've awarded more than $820,000 to local schools and nonprofits. Additionally, in October 2011, we partnered with the City of Council Bluffs to launch a free WiFi network for everyone in and around three Council Bluffs areas: Downtown Council Bluffs, Mid America Center, and the Harvey Recreational Complex. We expanded the network in 2013 to cover River’s Edge Park and City Hall.

But are such tax breaks really necessary? Especially when talking about construction projects of this magnitude and companies as well off as Google, which has some $64 billion in cash burning a hole in its corporate pockets.

Years ago I worked as an editorial page editor for the local newspaper and on one occasion the Chamber of Commerce asked us to meet with representatives of a shopping mall developer that was seeking permission to build a huge one in town. The Chamber and the developer wanted the newspaper’s editorial backing, which, truth be told, they would have gotten without the meeting.

Although tax breaks were not at issue, I asked one of the mall guys what role property tax rates played when his company was deciding where to build.


 “You mean none at all?”


So why did Google decide to build in Council Bluffs in the first place? Here is Google’s answer on the company’s website:

Council Bluffs has the right combination of energy infrastructure, developable land, and available workforce for the data center.

Nothing about taxes.

Now noting the original $16.6 million in tax breaks might have appeared unseemly, but my guess is that the money also wasn’t noted because it wasn’t important in the context of a $1.5 billion project.

My guess is that Google is building the next $1 billion addition to its Council Bluffs operation in Council Bluffs because it already has a big facility there, and the city still has the right combination of energy, land and workers.

The $19.8 million is just a free bonus for Google … at the expense people who pay taxes in Iowa.

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