Dollars and Cents

Lawmakers are back at the state Capitol this month for the start of the 89th Iowa General Assembly. The session will have a different look to it this year, as some will be donning face masks and others will be working remotely to protect one another from the COVID-19 pandemic. While it may have a different countenance, many of the issues remain the same.

Senate Republican leaders recently shared their priorities for the session. For the most part, they expect to be tackling issues they’ve faced in the past, ranging from workforce development to tax reform. Above all, their interests remain the same as years before: keeping Iowa’s business environment competitive.

“Our goal as a caucus has always been to pass policies to make our state attractive for businesses,” said Jack Whitver, Senate majority leader. “We have also worked to bring more people into the workforce and to help them obtain the skills necessary to fill the jobs openings in Iowa. We intend to continue to implement those policies in 2021.”

Top issues

Iowa’s low unemployment numbers were the envy of other states, and Republican senators aim to help workers and businesses return to pre-COVID prosperity, Whitver said.

“Our goal this legislative session is going to be helping Iowans back to work and getting our state back on track to be the best state in the country to live and work,” Whitver said. “Prior to the outbreak of the coronavirus, Iowa had one of the lowest unemployment rates in the country, wages were rising, and more job openings existed than Iowans looking for work. Recent unemployment numbers are among the best in the country, but more work remains to be done to restore the economy and improve career opportunities for all Iowans.”

Senate President Jake Chapman said the pandemic will indirectly play a role in legislative priorities as lawmakers work to put the economy back on track.

“We are still strong economically; Iowa was recognized as being the best state to weather COVID-19 financially because of the budgetary practices we had put into place,” Chapman said. “But certainly we want a thriving economy. We want an economy where businesses are expanding and where there are opportunities for Iowans to either grow in their jobs or to seek other opportunities and employment that might better their lives and livelihood.”

This is the fifth year in a row that Republicans have been in the majority in the Senate, and during that time they have focused on rewarding work and investment and making it easier to conduct business in Iowa, Whitver said.

“That focus will not change in the fifth year in the majority,” Whitver said. “Businesses and business owners want to stay open; they want to keep working. Their success obviously helps the business owners, but it is also good for their employees and the families who may depend on those jobs. The policies we plan to implement will be beneficial for all Iowans, whether they are small business owners or employees.”

Budget and tax reform

Senate leaders said conservative spending and keeping the tax rate low are of particular interest this year.

“The Iowa Senate will continue to work to provide consistency and stability in the state budget,” Whitver said. “It won’t spend more than it takes in and will ensure that fiscal promises are kept. The Senate will also work to reduce the tax rates on working Iowans. Iowa remains one of the states with the highest income tax rates in the country. Making Iowa more competitive with the states around us will improve the ability for Iowa businesses to compete at home and abroad.”

Tax reform needs to continue to be at the forefront this session, Chapman said. He pointed out how businesses in northwest Iowa have moved to South Dakota to benefit from its no personal income tax and low sales tax rate.

“I've been a huge advocate for significantly [reducing] and ultimately eliminating income tax in the state of Iowa, both on the corporate and individual side,” Chapman said. “And every year that goes by that we don't do that, other states are pursuing those paths. I just recently saw that the governor of Mississippi has announced that their focus for 2021 will be to phase out that income tax in their state. And so certainly that will be one of the areas that will help economically. My hope and my goal would be for this next session that we can focus on how we can provide tax relief here in Iowa.”

Regulatory relief and unemployment insurance will also be priorities, Chapman said.

“The one thing that has really concerned me is our unemployment insurance here in this state. If we're not careful, you know, that will be a tax increase on businesses,” Chapman said. “So I was very happy to see the governor use some CARES (Coronavirus Aid, Relief and Economic Security) Act money to shore up our unemployment in a manner that didn't increase those tax rates on businesses.”

Litigation protection

Whitver and Chapman said the greatest accomplishment of Republicans during the 2020 session was when they passed legislation to protect businesses from COVID-19-related lawsuits. It limits who can file lawsuits against companies for COVID-19 illnesses.

“In my mind, the most important piece of legislation passed during the final weeks of last session was passing litigation protection for small businesses and nonprofits operating in good faith to protect their employees and customers,” Whitver said. “It was critical in helping Iowans start working again and supporting themselves and their families. This legislation protected those businesses following the guidelines from the governor and public health officials from frivolous litigation in the event someone who had been at their facility tested positive for COVID-19.”

Chapman said the Senate may look into ways to assist business sectors that were hit particularly hard by the pandemic. He said it’s too soon to know what types of assistance may become available.

“We’ll also be looking at specific industries, sectors that have been decimated by COVID-19 and how we might be able to assist them in bringing those businesses back bigger and stronger than ever before,” Chapman said. “When you're not able to function and bring customers in, you don't have revenue coming in, but yet you still have to pay utility bills, you still have to pay your property tax. And it's crushing a lot of businesses. So we're going to do everything we can to incentivize them and bring these industries back as strong as we possibly can.”

ABI priorities

At the Iowa Association of Business and Industry (ABI), workforce, infrastructure and regulatory reform are top priorities for 2021. For ABI, that means overcoming barriers to employment, access to affordable housing, availability of training programs and ensuring workplace safety.

“ABI’s 1,500 members, with 330,000 employees, are drivers of the Iowa economy,” said JD Davis, ABI’s vice president, public policy. “Especially in 2021 when the job of the legislative session is to chart a course to economic recovery from the disruption of the global pandemic, workforce, infrastructure and regulatory reform becomes the road map to that recovery.”

The tumultuous past year has highlighted the needs of the state’s businesses and easily guides the priorities of 2021, Davis said.

“ABI members have remarked that the challenges of 2020 did not so much bring new issues to the forefront as they magnified the need to address issues that have already been identified,” Davis said. “Think of the increased need for employee child care when the lack of in-school teaching requires home schooling. High-speed broadband deployment becomes an imperative in a scenario where employees must work from home. The stress on the Unemployment Insurance Trust Fund to cover unemployment claims while remaining solvent have highlighted the need for reform there.”

Positive outlook

While 2020 was a difficult year on many fronts, Whitver shared his optimism for 2021 and beyond.

“I am confident in the future for Iowa and for America,” Whitver said. “This nation has faced many challenges since its founding, and we have continually met and overcome those challenges. I am optimistic the creativity, ingenuity and diligence of the people of this state and nation will overcome the challenge of the coronavirus and news of the successful vaccine approvals will continue to move our economy forward.”