Business Council bullish on ’20 but seeks lawmakers’ help

By: - January 8, 2020 11:20 am

The Iowa State Capitol (Photo by Perry Beeman/Iowa Capital Dispatch)

As Iowa lawmakers prepare to gavel in Jan. 13 for a legislative session that leaders say is likely to include talk of tax cuts and other actions requested by businesses, an organization representing the state’s biggest employers says it’s bullish on the first six months of 2020.

The Iowa Business Council, which represents the largest employers in the state, reported its members expect higher sales in the first six months of the year and an overall positive economic climate.

“IBC members are cautiously optimistic about 2020 and want to work with legislators and educators K-16 to make sure we have the right programs and in some cases legislation in place so our state can prosper,” board chairwoman Mary Andringa of Vermeer Corp. said in an interview.

GOP lawmakers who control both houses and the governor’s office have said they likely will consider new tax cuts, and perhaps a sales-tax increase to help pay for outdoor recreation and conservation projects — if the tax increase could be offset by cuts elsewhere. Those actions would fit in with the goals of IBC, which wants to find ways to make Iowa a bigger draw for potential employees.

On the IBC’s survey-based indices, anything above 50 means a positive outlook and expected growth. The overall outlook for the next six months came in at a hair above 60. That is down five points from early last year. 

On the down side, IBC members said they are concerned about a volatile political environment, changing consumer habits and regulations.

In a statement, IBC Executive Director Joe Murphy said the organization is supporting a streamlined and more competitive tax system, along with programs that help lure workers to Iowa and train them and others, and initiatives to increase the state’s population and its diversity. 

Mary Andringa chairs the Iowa Business Council. (Photo courtesy of Iowa Business Council.)

Andringa said the economic outlook for 2020 seems to be setting up much like the past couple of years. Few expect a recession, but many expect slower growth. 

“I felt like it was pretty typical,” Andringa said the IBC survey. “We still see growth for 2020, but as far as capital spending and employment, it will be about the same. It doesn’t signal a downturn, it’s a continued good economic situation. Optimism maybe wasn’t quite as high as a year ago, but it’s a positive trend.”

Asked how lawmakers can address IBC’s top concerns, Andringa said answers to the challenges will involve businesses offering internships and externships, state lawmakers and Gov. Kim Reynolds continuing support of Future Ready Iowa, and the Iowa Economic Development Authority expanding its effort to lure new residents.

IEDA has addressed the concerns in part by setting up a fake real-estate office in New York City to spread the word on Iowa’s relatively low housing costs. (The “This is Iowa” campaign caught many eyes, and drew praise, though critics pointed out in YouTube comments that Iowa also has relatively low wages — in many fields — to match the low cost of living). 

IBC members are backing their own digital ad campaign to lure workers, which is expected to complement the IEDA work. Details are still in the works, Andringa said. 

For employers to overcome the lack of workers, lawmakers will need to help push the federal government to change immigration laws to make it easier to attract more workers, Andringa said. Also, the state needs to make professional licensing requirements more uniform so doctors and other professionals can move with less hassle, she added.

“It’s difficult for someone licensed in one state for a medical job, for example, to switch to another state. We have to make that easier,” Andringa said. “Maybe you have an engineer whose partner is in medicine. It can be difficult to move” because of the varying rules among states, she added.

In the survey about the six-month outlook, IBC leaders: 

  • Forecasted higher sales, with 63% supporting that view.
  • Projected little change in capital spending and employment.
  • Cited these obstacles to growth: workforce shortages (90%) or business climate issues such as infrastructure, regulations or taxes (44%).
  • Indicated they consider these jobs the hardest to fill due to labor shortages: data analysts, health care professionals, skilled tradesmen and hourly retail associates.
  • Reported, with a 55% majority, that trade and tariff issues have affected their company’s revenue.

IBC member companies include: Alliant Energy; Casey’s General Stores, Inc.; Collins Aerospace; Corteva Agriscience; Deere & Company; Fareway; FBL Financial Group, Inc.; HNI Corporation; Hy-Vee, Inc., Iowa Bankers Association; Kent Corp.; MercyOne; Meredith Corp.; MidAmerican Energy Company; Pella Corp.; Principal; Ruan Transportation Management Systems; The Weitz Co.; The University of Iowa Health Care; UnityPoint Health; Vermeer Corp.; Wellmark Blue Cross Blue Shield of Iowa; and Wells Enterprises, Inc.

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