According to Senate Majority Leader Mike Gronstal, the 2012 legislative session is about three priorities: “jobs, jobs, jobs.”
Likewise, House Speaker Kraig Paulsen, R-Hiawatha, says this year’s work is about improving Iowa’s economy, creating an environment that encourages employers to keep and create jobs, and ensuring that each Iowa family is better off by providing “jobs, savings and certainty.”
The problem to date for the split-control Legislature is that philosophical differences between majority Democrats in the Senate and majority Republicans in the House have kept them from getting the job done.
The remaining weeks of the 84th General Assembly’s second session will decide whether they and Republican Gov. Terry Branstad can forge agreements that will enable Iowa to seize on its current advantageous situation compared to many other states and rebound from recession in a way that propels growth and prosperity — or whether they flounder through another year of gridlock in hopes voters can sort things out in November.
Last session, legislative partisans staked out two divergent and competing paths for improving Iowa’s job prospects which generally did not intersect, leaving a list of House-passed bills languishing in the Senate and a crop of Senate-passed measures gathering dust in the House. Most of those initiatives failed because one side viewed government as a facilitator and the other sees it as an obstacle to business development.
Legislative leaders of both parties are hoping this year will be different, but Republicans want to lower commercial property taxes across the board, ease government regulations and encourage private business growth while Democrats want to target tax relief, focus on job training and education, and foster quality-of-life amenities that employers look for in attracting skilled workers for modern jobs.
“I think we’re both in the same book, now it’s just a matter of getting to the same page,” said Rep. Pat Grassley, R-New Hartford, chairman of the House Economic Growth Committee. “There’s always a little bit of give and take in everything that gets passed here. It is going to take some bipartisan support for us to be able to do that.”
The best prospects for compromises this session are finding ways to cut commercial/industrial real estate taxes by up to 40 percent over a several years, making it easier to set up employee stock option programs to preserve Iowa-based companies, and lowering the state tax on in-state sales between Iowa companies to strengthen the supply chain with manufacturers, key lawmakers say.
“Those are the kinds of policies that I think can make a different in the private sector,” said John Gilliland of the Iowa Association of Business and Industry. “Job creators will tell you that having government out of the equation and providing tools and incentives to private industry to create jobs is the most effective and efficient way to create job growth in Iowa.”
Areas of disagreement
However, budget negotiators are far apart in areas of funding business incentives, skilled worker retraining, university research and technology transfer initiatives, cultural grants, and other programs where in many cases legislative Democrats are closer to Branstad than GOP lawmakers.
That’s been a source of frustration for key players like Sen. Bill Dotzler, D-Waterloo, co-leader of the House-Senate economic development budget subcommittee, while Paulsen vented his frustration last week over the lack of progress in finding a property tax compromise.
Dotzler said an effective economic growth strategy is a combination of educating existing workers, providing business development incentives that are competitive with other states, and using technology transfer to foster innovations in the marketplace. But he sees Iowa missing the mark in quality-of-life areas where government can play a role in helping to match skills with jobs, ensuring adequate housing, and helping communities with recreation and attractions that are crucial selling points in the current “war for talent.”
“Creative and talented people can go anywhere and businesses follow that talent. They’re going to want to land in places that have hip and happening communities,” Dotzler said.
Rep. Jason Schultz, R-Schleswig, also a co-leader of the joint House-Senate economic development budget panel, said government has “outgrown its mandate” and creates a business climate that is less effective the more it gets involved.
“It is completely outside of the constitutional box and any influence that it does have is negative,” he said.
Although Democrats and Republicans start from different philosophical positions, Schultz said he was optimistic this year will net some agreements to improve Iowa’s job-creation prospects.
“As long as we’re aimed at the same target, I definitely have a positive hope for negotiations and coming to a consensus between the two positions,” he said.
Invest $20 million a year for three years to identify local skilled worker shortages, and then help Iowans gain new skills so they can fill those positions; reduce tuition and fees for students receiving workforce training to fill local unfilled jobs. Cut commercial property taxes for every business, with four out of five seeing their property tax bills cut in half, beginning with small and Main Street businesses. Cut health insurance costs for 60,000 Iowa businesses that have 10 or fewer employees. Jump-start Iowa’s clean energy industry and create jobs throughout Iowa by providing consumer rebates for home and business small solar or small wind projects. Increase earned income tax credit; twice passed by the House and Senate and twice vetoed by Gov. Terry Branstad last year; would cut state income taxes for 260,000 Iowa families.
Create an incentive for a business owner to sell all or a portion of a company to an Iowa-based employee stock ownership plan. This would result in the employees of a company having ownership interest in their company and would also keep jobs in Iowa communities. Cut commercial/industrial property taxes by 40 percent over eight years; cap yearly rate increases at 2 percent for residential and agricultural property classifications; plan has state gradually taking over 100 percent cost of K-12 school aid and provides “backfill” for local governments. Require all administrative rules created by state agencies tot be accompanied by a jobs impact statement. Administrative rules are the regulations drawn up by government bureaucrats to implement laws approved by the Legislature. Makes changes to the existing High Quality Jobs Program to aid businesses seeking to locate in Iowa or to expand their current operations; add a cash incentive component to the program, which had previously only offered tax benefits. Provide corporate tax relief for suppliers to anchor manufacturers in Iowa. Make it easier for new employers to do business in Iowa by reducing the length of time they pay an ‘introductory rate’ for unemployment taxes.
Source: Iowa House, Senate