Farmers aren’t the only Iowans who have big hopes for ethanol and biodiesel. In a survey of Central Iowa business leaders, 90 percent called the fledgling industry “important” or even “vital” to the state’s economic future.

The topic was one of the focal points of the Des Moines Business Record’s annual survey of local business leaders. This year’s survey was sent to a limited list of top-level leaders in early May and achieved a response rate of more than 33 percent.

The survey consisted of four general questions about the respondent’s company, seeking to establish an outlook for the local economy. That section was followed by eight questions covering a range of issues that affect the region directly or indirectly. Finally, respondents were encouraged to comment on any topic they chose.

Here’s a summary of the results:

Ethanol and biodiesel. Iowa easily outranks its nearest competitor, Illinois, in the annual harvest of both corn and soybeans, and stands at the top of the pack in ethanol production, too. The technologies to turn corn into ethanol and soybeans into biodiesel have been around for a long time, but it’s only recently that production plants have begun to multiply, and interest seems to have strengthened in Washington D.C.

Only five survey takers rated this industry as “not a major factor” in Iowa’s economy. Thirty agreed that production of such alternative fuels is “an important component” of that economy, and 13 rated it even higher as “a vital factor.”

Such interest suggests why several Iowa politicians have chosen to emphasize in-state energy production so strongly in their 2006 campaigns.

Financial incentives. A controversial topic? Not in this survey. Of 48 responses to the question “Should the state and city continue to provide financial aid packages to large companies that want to expand or locate here?” 41 said “yes.”

In a recent example of the practice, Des Moines and Iowa last year agreed to provide up to $47 million in grants and tax credits to persuade Nationwide Mutual Insurance Co. to add to its building at 1100 Locust St. and construct an office building and parking ramp nearby. Government officials said after the agreement was reached that the company had told them it had received offers of incentives to build elsewhere.

Last week, the U.S. Supreme Court rejected a lawsuit by Ohio taxpayers that challenged nearly $300 million in tax breaks that were granted for a new DaimlerChrysler AG plant. Chief Justice John Roberts said the citizens had no right to challenge governments’ tax policies or spending decisions “simply by virtue of their status as taxpayers.”

National health insurance. The results were not nearly as conclusive here, as 23 respondents said the United States does not need a national health insurance program operated independently from the current employer-driven system, and 24 said the country does need such a plan.

According to a study by The Henry J. Kaiser Family Foundation, employer health insurance premiums increased by 9.2 percent in 2005, and the annual premium for an employer health plan covering a family of four averaged nearly $11,000.

State Legislature. We asked the survey takers to rate recent sessions of the Iowa Legislature in terms of their effectiveness in addressing business issues, and 77 percent chose “fair” or “poor.” Ten gave the state lawmakers a “good” grade and only one chose “excellent.”

After the conclusion of the 2006 session, several business leaders expressed disappointment that the Legislature failed to deal with commercial and industrial property tax rates.

And in a related comment at the end of his survey form, Des Moines attorney and civic leader Steve Zumbach wrote: “The Greater Des Moines area has got its economic development priorities right by focusing on quality of life. If you build a community where people want to live, economic development will follow. The state, on the other hand, has let us down. Historically, Iowa had a first-class K-12 and postsecondary education system. The failure to adequately fund our education infrastructure is nothing short of irresponsible. We cannot have a first-class state with a second-class education system.”

Outside ownership. It was a split decision, but 22 of the respondents said the sale of local companies to owners from outside Iowa has harmed the Central Iowa economy. Nine said the change has helped us, and 17 said they had seen “no great impact” from the changes in ownership.

The recent sale of homegrown Townsend Engineering Co. to a Dutch company continues a long-term trend. Among the larger examples in recent years: In 1997, ING Groep N.V. purchased Equitable of Iowa Cos.; in 1999, E.I du Pont de Nemours & Co. completed its acquisition of Pioneer Hi-Bred International Inc.; and, in a deal whose repercussions have dominated the news recently, Newton’s Maytag Corp. was sold to Whirlpool Inc.

Downtown living. As rehab projects continue at a frantic pace in downtown Des Moines, nearly half of this successful and well-established survey group said they have considered living there. Twenty-two of 48 respondents said the thought had crossed their minds.

Current projects range from low-income apartments to million-dollar condominium units being fashioned in existing buildings. For example, the Kirkwood Hotel, the Equitable Building and the Liberty Building are undergoing conversion work now, and new construction is under way at two locations along Grand Avenue and is expected to start this year on Fourth Street south of Court Avenue. One proposed project, however, has hit a snag. Metro Lofts is being redesigned as apartments rather than condos; developer George Sherman blames the change on the rising cost of construction.

Gateway West. With the new Central Library up and running and residential projects in the planning and speculative stages across Locust Street, our poll found plenty of confidence that the long struggle to create Gateway West will spur more development in the area. Ninety percent saw more construction cranes in the future for the west end of downtown.

The national outlook. Nearly all of the respondents stuck to the middle of the road when asked to forecast U.S. economic prospects for the rest of 2006. Twenty-one expect little change, and 24 are looking for good growth. Only one predicted a recession, and two foresaw exceptional growth.

In the first quarter, gross domestic product grew at a 4.8 percent annual rate, the strongest showing in 2 ½ years. Halfway through the second quarter, the stock market has generally continued to climb, but home building and mortgage activity have started to cool.

Other thoughts. Given the chance to express their opinions on any subject, the poll takers wrote comments such as these:

● “Our state must maintain a favorable tax and business environment for businesses of all sizes. Central Iowa’s educated workforce, good business climate and commitment to ‘buy local’ are conducive to growing strong local companies.” – Ron Hanser, president, Hanser & Associates.

● “I am concerned with, not so much direct competition for a few clients, but with competition for a few good employees who will stay with the company for a long period of time.” – Jim Langin, president, Bank Iowa.

● “A tremendous amount economic development revenue leaves Iowa every day when our government (state and local) uses vendors [from] out of state. Those vendors do nothing extraordinary in relationship to the local companies in the same business. How can you expect local business to thrive and prosper, reinvest in the economy, add additional employees and services, yet have no advantages for that company in regards to achieving state or local government business? Rumor has it that the state of Michigan instituted an additional portion to their RFP system that allows ‘qualified, competent state businesses’ the opportunity for last look on RFPs, thus allowing the state to purchase at the lowest pricing around, yet also keeping the revenue in their state where it can be reinvested. Truly a win-win. There is something our state government should review.” – Ed Minnick, vice president of sales, Acme Printing Co. Inc.

● “It’s hard as a small retailer to listen, see or read mainstream media outlets. They nearly always focus on negative aspects of our current national and local economy. ‘Avoid going downtown today’ rather than ‘here are the easiest routes downtown.’ The state of Iowa has a very low unemployment rate and jobs are available; spread the good news. Yes, the hardships coming to Maytag employees are newsworthy; let’s broadcast the expansion ideas of other major corporations in conjunction with the bad news. Lastly, it’s not all the Bush administration’s fault, just as it was not all the Clinton administration’s fault.” – Joe Domeier, owner, The Art Store.

● “The quality of water in Iowa (lakes, rivers) is one of the most critical issues facing the state. We will never be able to convince additional businesses to relocate to Iowa if we continue to use our rivers as open sewers for agricultural and business interests.” – Stephen Dengle, executive vice president, Des Moines University.

● “One of the biggest issues facing Central Iowa businesses (and all communities across the United States) is workforce – quantity and quality. The workforce of tomorrow will pick communities that have the right quality-of-life amenities first, and the jobs second.” – Mary Bontrager, executive vice president, Greater Des Moines Partnership.

● “I feel strongly that Central Iowa is poised for significant growth over the next several years from both an economic and cultural standpoint. The groundwork has been laid for an unparalleled decade of expansion.” Dave Schwartz, executive vice president, TrueNorth Enterprises LLC.