Reaction to Iowa Governor's ESOP Initiative

In response to Iowa Governor Terry Branstad's January announcement that promoting employee ownership would be one of his administration's top three economic goals, ESOPs seem to be gathering increased press coverage, with legislators endorsing his call and well-known local ESOP companies appearing in the press. Employees at Cedar Rapids-based Van Meter noted that their ESOP accounts increased in value faster than the S&P 500. Debi Durham, the director of Iowa's Economic Development Authority, noted that unlike out-of-state buyers, ESOP ownership was less likely to result in layoffs. At the same time, the nonpartisan Legislative Services Agency estimated the cost of the state's ESOP initiative at $1.7 million, consisting of $1 million in additional spending and $700,000 in lost capital gains taxes.