Economic Growth

— Enhance Iowa's business environment

To maintain and enhance Iowa's attractiveness to current and potential businesses, it is essential that Iowa do what is possible to lower the cost to businesses and employees.

Specifically, the Alliance:

* Supports the state's Right-to-Work Law and opposes any legislation that would negatively impact those laws.
* Supports Iowa's statute for workers' compensation regarding injuries on the job.
* Opposes mandating prevailing wage rates for public construction projects, which would significantly increase the cost of such projects.

Taking away these protections could significantly impact the ability to attract a skilled workforce and/or impair business expansion and job creation in the state. For example, many national economic development consultants report that the lack of Right-to-Work laws in other states is often a deal breaker for companies considering business relocation.

Property Tax Reform

— Provide tax relief for commercial and industrial properties

Property taxes are very uncompetitive for commercial and industrial properties in Iowa. According to the most recent 50-State Property Tax Comparison Study, Iowa's urban commercial property tax rates are the fifth highest in the nation, with rural commercial property tax rates similarly ranking among the top ten highest.* Iowa's industrial property tax rates are not much better, ranking 15th highest in the U.S for both rural and urban areas. Meanwhile, neighboring states, including Minnesota, South Dakota and Nebraska, are enjoying more competitive commercial and industrial property tax rates.

Delaying reforms to Iowa's property tax system is intensifying the tax burden on commercial and industrial payers. Iowa's commercial and industrial property owners are taxed on 100 percent of their assessed value, while residential property owners pay taxes on approximately 46 percent of their assessed value due to an assessment limitation (rollback). This disparity between tax classes is placing too much burden on commercial and industrial taxpayers, making it difficult for municipalities, counties and schools to keep pace with growth.

The residential property tax rollback is based on an outdated system of linking residential values with agricultural productivity, rather than taxing based on true market values. Eliminating this agricultural link would allow local governments to decide how to tax commercial and industrial properties to gain the best advantage for business expansion and new business recruitment – thus expanding the job base, tax base and commercial/industrial and residential growth of a community.

*Source: Iowa Taxpayers Association, 2006 Report

Income Tax

— Simplify the income tax system

The Alliance continues to call for simplification and overall reform of the state income tax formula. Publications and statistical data used in marketing Iowa continue to show a skewed view of the true income tax liability of companies and individuals by showing the combined rate of tax. Although these publications may include a small asterisk to signify the deductibility of federal income taxes on state income tax returns, this is mostly overlooked by those looking to invest in Iowa.

The Alliance believes the state should flatten and adjust the current income tax structure to a two-tiered system. This change would allow the state to maintain its income tax revenue stream while eliminating the confusion in marketing our state.

Tax Increment Financing (TIF)

— Preserve TIF as an economic development tool

The Alliance supports Tax Increment Financing laws that have made cities and communities more competitive for business and industrial growth. TIF districts stimulate an increase in the tax base for the long term and allow communities to compete for jobs, sales tax and tourism dollars. Any change in the current TIF legislation would further erode the tools local communities use to compete for business growth.