Public Policy Update: Economic Development Program Changes Proposed
February 14, 2025 | Public Policy
State Policy Update
Lawmakers continued to introduce bills and hold subcommittee and committee meetings on various issues this week. The Iowa Economic Development Authority (IEDA) introduced their bill to restructure tax incentive programs. The Economic Alliance, along with a coalition of economic development groups across the state, has provided input on the restructuring plan of programs instrumental to our economic development work. As one of our top priorities this year, we are working to support updates to tax incentive policies that meet current demands to support business growth. The proposed bill aims to streamline processes, eliminate redundant programs, and enhance support for infrastructure, redevelopment, and cultural initiatives in Iowa, including:
- Strategic Infrastructure Program: The requirement for the Iowa Innovation Council to review applications for financial assistance is removed. Instead, a committee appointed by the IEDA director will handle the review process.
- Brownfield and Redevelopment Tax Credits: The brownfield redevelopment program and advisory council are repealed. The IEDA will now determine tax credit amounts and review applications independently, with the option to engage outside experts for assistance.
- Historic Preservation Tax Credit: New criteria are established for projects involving single-family dwellings, and timelines for project commencement and completion are adjusted. The IEDA can award additional tax credits for large projects exceeding $10 million in qualified expenditures.
- Arts and Culture: The IEDA will manage an Arts and Culture Enhancement Fund to support arts organizations, promote cultural expression, and increase access to arts in underserved communities. The bill repeals several existing cultural programs and funds, consolidating them into this new fund.
Two other significant issues put forth this week we’re monitoring address government efficiency and childcare.
- Government efficiency: As promised in her 2025 Condition of the State, Governor Reynolds signed an Executive Order this week creating a task force aimed at improving efficiency in state government. Named after the federal Department of Government Efficiency (DOGE), Iowa’s DOGE Task Force will be led by Emily Schmitt of Sukup Manufacturing, who also led the Governor’s Child Care Task Force. Continuing the efforts made last year to realign state government for better efficiency, and unlike the federal DOGE undertaking, Iowa’s DOGE Task Force will make recommendations to the Governor and lawmakers on maximizing return on taxpayer investment, leveraging emerging technology like artificial intelligence, and further refining workforce and job training programs. The task force will hold its first meeting within 60 days and submit its report and recommendations within 180 days of that initial meeting.
Childcare solutions: Also mentioned in her Condition of the State, the Governor announced legislation in the past week intended to create more childcare solutions. The $16 million grant program would incentivize continuum of care partnerships between childcare centers and preschool providers to help parents with midday transportation challenges and help more children enter and remain in preschool.
Federal Policy Update
Advocating to Prevent Tax Increases: Absent congressional action, American families, workers, and businesses will be hit with the largest tax increase in American history at the end of 2025. It means businesses could face increased taxes, leading to potential job cuts, reduced wages, or even closures. Families could experience decreased take-home pay, making it challenging to manage everyday expenses like child care. And communities may suffer as local businesses struggle to survive, resulting in fewer jobs and less investment in local services. As Congress contemplates addressing the impending tax cliff and avoiding the largest tax increase in U.S. history, we continue efforts led by the U.S. Chamber to urge action to prevent automatic tax increases, protect small businesses, and maintain incentives for investment and innovation. For more information, contact Barbra Solberg, the EA’s public policy strategist.