FROM THE DESK OF REPRESENTATIVE DE BOEF

January 20, 2005

It is the end of the third week at the Capitol.  Freshman legislators are beginning to figure out where things are.  This is my third term, but I still had trouble finding committee rooms this year because of remodeling at the Capitol.

Floor action is beginning to occur.  The biggest action taken by the legislature this week is the passage of 4% allowable growth for K-12 education.  While this is short of the 6% requested by the education lobby, it is $100 million and will be a great stretch for the state to be able to cover it.  However all of use here at the Capitol realize that the education of our children must remain a number one priority when discussing the budget for Iowa. 

Finding ways to expand Iowa and encourage economic growth is a main goal of Republican and Democratic legislators alike.  Iowa Senate Republicans unveiled a bold economic development initiative aimed at creating jobs, attracting young people, developing skilled workers and improving Iowans’ quality of life.

“This initiative is a dynamic market-based approach that puts economic growth in the hands of businesses, not government,” said Senate Republican President Jeff Lamberti (R-Ankeny).  “It’s no longer about government picking winners and losers.  It’s about developing long-term economic policy that is sustainable well into the future.”

The initiative offers tax credits to businesses for new job creation and eliminates state income tax for Iowans under the age of 30.  It also provides incentives for high-tech training, increases funding to the community attractions and tourism program, creates tax incentives for businesses to contribute to community development projects and reforms burdensome business regulations. 

The business tax credit would apply to new full-time jobs paying at least $10 an hour.  The tax credit would be available for newly-created jobs for up to five years with a maximum credit of 20 percent of the salary paid per year.  To further assist with business expansion, Senate Republicans want to commit at least $25 million a year for facility construction or renovation.   

“We are creating jobs, not promises,” said Senate Republican Leader Stewart Iverson (R-Dows).  “Every employer can benefit from this plan: big and small, rural and urban, established and new.  Businesses are the ones that create jobs.  Government creates the climate that encourages businesses to grow.” 

In an effort to keep and attract young Iowans, the initiative also eliminates income tax for people under the age of 30.  “More than half of our college graduates leave the state after graduation,” said Lamberti.  “We want to reverse Iowa’s brain drain and make our state a more attractive place for young people.”

Republican senators said that a skilled workforce is essential to a growing business community.  Under the plan, the state will continue partnering with community colleges to provide high-tech training for workers and investing in Regents institutions to assist in developing new technology and new businesses.  Tax incentives also would be available to companies that take advantage of cutting edge training for their workforce.

The initiative also focuses on improving the quality of life in Iowa’s communities.  Republican senators want to significantly increase funding for Iowa’s Community Attractions and Tourism (CAT) program from $12 million to $25 million a year over five years.  The CAT program funds important recreational and cultural projects in small towns and large communities.  The initiative also would create a community development tax credit that businesses could receive in exchange for charitable contributions to community projects. 

“While good-paying jobs are essential for bringing people to Iowa, increased cultural and recreational opportunities are important for keeping people here,” said Iverson.

Republican senators said they also will continue fighting for a better regulatory environment for Iowa businesses.  “We are changing the way we grow,” said Lamberti.  “We are creating jobs and making our state a more attractive place for people to live.  We aren’t just throwing up money and seeing what sticks.”

As one who supports encouraging business to expand by tax and regulatory incentive I am much more enthusiastic about this proposal.  The benefits are more widespread then the proposal of the Governor to bond for $800 million to continue to support the Grow Iowa Values Fund.  I will not endorse the borrowing of $800 million to pick winners and losers in the business industry of Iowa.

I would appreciate your input.  My phone number at the Capitol is 515-281-3221, or e-mail me at bdeboef@legis.state.ia.us.  I would welcome visitors at the Capitol, too!