Central Iowa’s business leaders are used to handling difficult challenges, but ask them whether Iowa and Des Moines have become too dependent on gambling as a source of revenue, and most react the same way: “That’s a tough question.”

The consensus among respondents in the Business Record’s annual executive survey was that we’re hooked on gambling dollars and it’s too late to change that. “We probably have become too dependent, but without having enough other industries in our state, we’re between a rock and a hard place,” said Carolyn Helminger, president of Coldwell Banker Mid-America Group Realtors. “It’s a double-edged sword when you’re trying to figure out how to get the money you need. I think we need to bring more revenue base into our state and attract more business and manufacturing.”

The informal, unscientific poll of local business owners, executives and managers also brought these encouraging findings: Most of those contacted expect to see increased revenues for their companies in the coming 12 months; most expect to add employees; and most are planning significant capital investments.

Although nearly all of the respondents expect interest rates to rise, almost two-thirds said the cost of borrowing has little or no effect on their companies’ hiring and investment decisions.

Regarding social issues other than gambling, the area leaders gave lukewarm approval to the Grow Iowa Values Fund and supported, with some reservations, the idea of merging the Des Moines and Polk County governments.

GROW IOWA VALUES FUND

The Grow Iowa Values Fund targets five areas: business development and assistance, university research and development, workforce training, quality of life and school infrastructure. The program’s stated goals are to help grow the state’s economy, create jobs and generate wealth.

“I think any investment in Iowa is good for the economy,” said Marty Herrmann, vice president of operations at Iowa Paint Mfg. Co. David Vellinga, president of Mercy Medical Center, put his support behind the program, too, saying, “It has stimulated necessary discussions and activities in the Iowa economy and has led to growth and recruitment.” Should the Legislature find a new way to continue the program, or should the funding be an annual issue? “The way it’s funded now is good; it should be debated on a regular basis,” Vellinga said.

Others reported a favorable impression of the program but said it’s too soon to know how effective it will be.

“I don’t think it has been around long enough to see results,” said Jim Hubbell, chairman of CB Richard Ellis/Hubbell Commercial. “I think it’s a good idea to put money into economic development and growing companies, but it’s too early to tell.”

Ron Hanser, president of Hanser and Associates, took the same tack, saying, “As a tool to meet economic development goals, it is a step in the right direction. But we need to take a long-term view on these things and see more than first-year results. We need more time to evaluate it.”

A couple of those interviewed weren’t impressed with the Values Fund at all. “It hasn’t done enough to attract or grow businesses in Iowa,” said Kyle Krause, president of Krause Gentle Corp. “The Legislature has many issues on the table, and I’m not sure they’ll have additional money to fund it.”

And Jim Erickson, president of Anderson Erickson Dairy, said, “We have more to sell in Iowa than economic handouts. My competitor (Wells’ Dairy in Le Mars) got $30 million and was going to stay in the state anyway.”

CITY-COUNTY MERGER

Most of the respondents like the concept of merging Des Moines and Polk County into one government body, but weren’t sold on the details they’ve heard so far.

Hubbell said: “I like the idea but I’m not sure I like the specific solution being offered. It’s a solid idea to combine the governments and for sure combine services. I think we missed an opportunity when the Water Works and the Parks Board weren’t combined (as had been proposed).”

“I support the concept,” said Mike Knapp, head of Iowa Realty. “I believe there will come a time when people will find a way for more consolidation. As a business owner, you attempt to offer services in the most economical way you can and to the degree you can move away from parochial thinking.”

Aside from working out the nuts and bolts of a merger plan, these businessmen were most concerned about issues of competition and cooperation.

“Our competition is the surrounding states and their metro areas; we’re stronger as we join forces together,” said Sumner Worth, president of Gilcrest/Jewett Lumber Co. Inc.

Tom Gumm, co-owner of Lozier Heating and Cooling, summed it up this way: “It helps Des Moines — and if we don’t take care of the core of the metro area, it’s all going to fall apart. Consolidation is a better place to be instead of all being against each other.”

GAMBLING REVENUES

A dilemma is the choice between two undesirable options and that describes our gambling-revenue situation, according to these business people. Many deplored the harmful effects of gambling but acknowledged that casino profits are supporting many worthwhile causes and projects.

“Do we have any alternatives? I don’t know of any,” said Worth. “Maybe we don’t have a choice until someone addresses Indian reservation gambling, which is sucking money out of the community. [Indian-operated casinos are exempt from taxes.] At least we’re getting some value out of these other casinos. Setting the dollars aside, we would be much better off without it.”

The Indian exemption also troubles Erickson, who said, “I’m especially upset that the Indian reservations don’t pay any tax. I think that’s not fair.”

Hanser said: “As we look at what’s necessary to make Iowa more attractive, we need to realize gambling is one important component in the entertainment mix. But I think it can be too much. We don’t Iowa to become a Las Vegas. That isn’t consistent with what Iowa is.”

Several respondents shared his concern about what might lie in Iowa’s gambling future. “Gambling is a tax on the poor, and that’s not my idea of how we should be taxing. I’d like to see less gambling,” said Ken McCuskey, vice president and chief accounting officer at Sauer-Danfoss Inc. in Ames.

H. Lynn Horak, president of Wells Fargo Bank Iowa, said: “I don’t think we’re too dependent, but we should be very careful in any further expansion. I’m perfectly OK with opening up Prairie Meadows (to table games), but gambling shouldn’t expand in the metro area.”

“I think it has been a healthy arrangement so far,” said Al Oberlander, principal at RDG Planning and Designs, “but I’m concerned with the recent expansions, which signal to me an increasing dependence on this revenue source.”

Toby Joseph of Joseph’s Jewelry went a step further than the rest and proposed a specific change to our gambling policies. “If I were in charge, everyone would need a license to come in the casino,” he said. “If they were on government assistance, owed child support, had overdue debt or outstanding tickets, they would not be allowed to play.”