A Look Back at the 2018 Iowa Legislative session
May 11, 2018
The Iowa Legislature hammered the gavel for the final time on May 5, bringing an end to the 87th General Assembly. Depending on the perspective, the 2018 session proved controversial and productive. From a business perspective, the session carried some significant successes. The Economic Alliance is focused on the growth of our business community. Our public policy strategy is to provide a unified voice of our members to advocate for pro-growth and pro-business policies.
The political “tea leaves” we saw prior to this session lead us to prioritize three issues: tax reform, workforce, and economic development incentives. In all three areas, we wound up satisfied with results, albeit with more work to be done.
1) Tax reform was the top priority of Kim Reynolds the day she was sworn in as Governor in May of last year. Republicans, who hold the majorities in both the House and Senate, campaigned on state tax reform. Lastly, the federal government’s action on tax reform last year made it the “perfect storm” to get tax reform on the state level done this year. If they didn’t act, taxes would go up for Iowans because of the federal reform. We were confident lawmakers wouldn’t want to increase taxes for Iowans, particularly during an election year. We were proved right. The House and Senate voted on May 5 to send the governor the first reform on taxes Iowa has seen in several generations. While it was not everything we had hoped for, it does simplify the code by lessening the number of brackets and eliminating federal deductibility. Making Iowa more competitive is always one of our public policy focuses and simplifying the state tax code goes a long way to achieving it. The governor is expected to sign the legislation soon. Click here to learn more.
2) Workforce challenges continue to be the top concern of Economic Alliance members, business owners and leaders from across the state. After echoing these concerns and challenges for the past few years, the legislature acted this session and unanimously passed Governor Reynolds’ Future Ready Iowa Act (HF2458), which she signed into law on April 3. We have been supportive of the Future Ready Iowa initiatives that aim to create opportunities for more Iowans to have careers in high-demand fields and to reach the goal of 70 percent of our workforce having education or training beyond high school by the year 2025. Click here for more on how the Future Ready Iowa Act enhances our local workforce efforts.
3) Our Economic Development team relies on tax incentive programs to attract and retain business in our region. Without these programs, Iowa would be at a disadvantage as we compete with other regions around the globe. We knew that when the legislature began examining the state’s tax code, it likely meant they would also examine tax credits and incentives. We immediately prioritized our key economic development incentives into three buckets and began telling their success “stories” with legislators.
Those three buckets included innovation, workforce and redevelopment incentives. In the end we were successful in preserving these credits, at least for the time being. As a part of the tax reform deal, legislators have called for a review of all tax credits to take place with recommendations for changes to them to be presented as the next legislative session convenes in January. The Economic Alliance, with our partners across the state, will continue to provide input as the review takes shape.
While the session is over, our advocacy work continues. We cannot be successful in our advocacy efforts without the input and actions of members, and we thank each of you for your willingness to contact lawmakers when asked and echo our pro-growth advocacy efforts. Click here to see our full 2018 state public policy agenda and how we fared this session.