The Iowa Association of Business and Industry’s Message to the State Legislature: We Need Tax and Regulation Reform

If you mention the state of Iowa to the average American, a Midwestern agricultural state covered by acres of corn and soybeans immediately comes to mind. College football fans might know that the Hawkeyes rank as a Big Ten Conference Legend. Folks of the political bent would respond that the Republican Presidential straw poll is conducted from the campus of Iowa State University in Ames every four years. From this small college town, thirty seven miles north of Des Moines, a straw poll victory can thrust a candidate into the national spotlight. Conversely, a loss can dampen the aspirations of many others. History shows that the Iowa straw poll is not a very good prognosticator of the ultimate Republican candidate, but it does serve as a bell weather of conservative Midwestern values.

But if you are a business owner who calls Iowa home, your response may not be quite as up-beat and glowing. The fact that Iowa ranks at number twenty-three on the 2013 chiefexecutive.net list of “Best and Worst States for Business,” dropping a point from last year, is certainly not a welcome accolade.  Internal Revenue Service data shows that the state is bleeding residents, wealth and industry to business magnets like Florida and Texas. Between the years of 1992 to 2010, the state actually lost $ 3.5 billion dollars of Adjusted Gross Income (AGI) to Florida, Texas, Minnesota, Arizona, and Missouri.

All of this has not escaped the attention and concern of the Iowa Association of Business and Industry, the state’s largest business association. The association is comprised of 1,400 businesses that employ over 310,000 workers. During a recent conference in Des Moines, association board chairman Myron Linn acknowledged property tax reductions passed by the state legislature in 2012, but expressed strong feelings that the state needs to do far more in the way of tax and regulation reforms in order to put Iowa on equal footing with those states competing for Iowa’s businesses, as well as attract highly qualified workers. To this end, the association prepared its list of priorities to be presented to the Iowa State Legislature’s 2014 session, set to meet in January.

• Reduce and simplify individual and corporate income taxes. They want clarification of the definition of the state’s machinery and equipment sales-and-use tax policies.

• Enact a policy that ensures Iowa’s business regulations do not exceed those of the federal government. The legislature should do nothing now or in the future to put road blocks in the way of business growth and expansion.

• Highly qualified individuals should be rewarded with incentives to locate in Iowa.

•  Endorse improvements in education, particularly as it pertains to assisting the growth of the science and technology sector.

• Eliminate legal barriers that stand in the way of government’s ability to manage expenses and to streamline many government services.

While all of these requests may not immediately come to pass, this powerful and influential organization will certainly have its voice heard. Who knows, maybe the next time Iowa is mentioned to the average American their response will be, “It’s a place where I would like to raise my family and build my business.”