Sierra Club Response on Special Legislative Session for Funding Subsidies to Mesabi Metallics
Iowa’s governor called the legislature into special session on October 2 to provide funding for subsidies for the Mesabi Metallics steel mill that was just announced to be built in Lee County. The governor’s press release did not state the amount of the subsidy that she wants to give Mesabi.
This is the second year we have a budget with expenses of $1.3 billion greater than revenue for the year. We have been drawing down reserves to make up the difference. And we are underfunding or not funding all kinds of things, including water sensors and parks and recreation. At the current rate, those reserves are going to drained within a couple of years. At that point, the state’s finances will be going off of a fiscal cliff, which will result in cutting services and laying off staff. Giving a large subsidy to Mesabi will bring us to the fiscal cliff even sooner.
Iowan’s are concerned about affordability as they have watched increases in the price of gas, the cost of food at the grocery store, and everyday living expenses. Further, when our tax dollars subsidize large corporations, everyone else picks up the slack.
There is no question that this subsidy is being rammed through the legislature with very little consideration of the costs, benefits, requests, or any other details. The Democrats were approached about a special session the week of September 20, but were provided few details. The Mesabi project was announced to the public on September 28 and the governor called the special session on September 29.
Pepper Purpura of KCCI reported that the president of Southeastern Community College, Michael Ashe, “has been in talks with Mesabi Metallics for months about potential workforce training”. [1]
Obviously, the backs were slapped, the hands shaken, and meals consumed long before this development project was publicly announced. All the while, the public was kept in the dark. Now, the taxpayers will be on the hook for large subsidies. Yet, the public still doesn’t know the details. If this is such a great economic opportunity, why does the company have its hand out begging or demanding taxpayer fund it?
Howard Lutnick, U.S. Commerce Secretary answered that question during the White House press conference when the Mesabi project was announced. Erin Murphy of The Gazette reported, “Howard Lutnick said at Monday’s announcement that the plant’s location and construction in Iowa is not dependent upon state tax incentives or breaks.” [2] Further, he added, “‘No, I think this deal’s done. This deal is done. They’ve already worked it out,’ Lutnick said in response to a reporter’s question. ‘That’s why we’re all together with the president. The president doesn’t bring people together unless it’s a done deal.’” [2]
The Revenue Estimating Conference is meeting on October 16. The three members of the Conference review the revenue that has been collected, consider the fiscal health of the state’s economy, and make projections for revenue being brought into the state’s coffers. The governor is asking for the legislature to increase the incentives that Iowa Economic Development can offer Mesabi before the legislature understands the predicted fiscal picture of the state.
We urge the legislators to resist the urge to give this proposed subsidy package to Mesabi Metallics. It is time for the legislators to carefully consider the request, ask serious and important questions, and to take steps to ensure that the taxpayer money is not squandered.
[1] Pepper Purpura, “Southeast Iowa weighs workforce needs for planned steel plant”, KCCI, September 28, 2026
[2] Erin Murphy, “Largest-ever U.S. steel plant coming to Iowa, White House says”, The Gazette, September 28, 2026
What you can do
Contact your state legislators and ask that they oppose changes for increased subsidies to Mesabi Metallic.
To find your state senator's email address, Iowa Legislature - Senators
To find your state representative's email address, Iowa Legislature - Representatives
To locate your state senator and representative, see www.legis.iowa.gov/