Business council eyes legislation on taxes, broadband, workforce, child care

The COVID-19 pandemic has highlighted gaps in internet access. (Photo courtesy of Iowa Workforce Development)

The Iowa Business Council plans to push for a legislative platform designed to support a broad-based recovery from the pandemic, its executive director said.

Joe Murphy said in an interview that the state needs a more competitive tax policy, better broadband, programs that attract and keep workers in Iowa, better child care and affordable housing for workers.

“This year, we have a handful of priorities that we think really set the stage for future growth and continued economic recovery as we emerge from the pandemic,” Murphy said.

The council is a nonpartisan organization representing 22 of Iowa’s major employers. Here’s a summary of areas the council hopes lawmakers and the governor will address:

Broadband connectivity. “Obviously, that has been an issue for a long time, particularly in the rural parts of the state,” Murphy said. “But with so many people working at home and so many children learning virtually from their homes (during the pandemic), it’s really become a focus on broadband as a critical piece of infrastructure.

“Iowa really needs to take a look at long-term funding to get connectivity in place throughout the state of Iowa,” Murphy said. The state lags others in uploading and downloading speeds, putting residents and businesses at a disadvantage, he added.

A key challenge will be adding to the mish-mash of state and federal grants to come up with steady, long-term funding.

“Iowa really needs to take a creative look at funding options to really fund the infrastructure needed for high-speed broadband connectivity throughout Iowa,” Murphy said. The effort could cost “upwards of $500 million” and bonding might be an option, he added. The council also supports increased state matching grants.

Competitive tax policy. The council continues to support Gov. Kim Reynolds’ Invest in Iowa Act, which proposes to raise the sales tax to pay for conservation and outdoor recreation projects and to offset property taxes now paying for mental health services, Murphy said. 

Iowa ranks 48th among the states in corporate tax climate, he added. 

“Iowa’s income tax is complicated. You have to read the fine print multiple times to figure out what the rate is,” Murphy said. “I know our top rate in the state of Iowa is way out of line with the rest. We rank in the bottom quartile of (satisfactory) tax rates at 9.8%.” 

Workforce development. This year’s platform includes a call for continued investment in Future Ready Iowa, including the Last Dollar Scholarships and Employer Innovation Fund. Future Ready Iowa is a set of programs aimed at ensuring 70% of Iowans have education and training beyond high school by 2025. 

Child care.  “We continue to really lack options with respect not only to child care opportunities for our kids, but also how do we fund it?” Murphy said. The council says 23% of Iowans live in an area with a child care shortage, and the state has one of the highest percentages of families, 76%, in which both parents work outside the home (pre-pandemic). The state also still needs to address the situation in which low-income parents can lose aid by taking a part-time job. 

Affordable workforce housing. The council would like to see increased spending on the Housing Trust Fund, noting that a lack of affordable housing in many areas directly affects economic development. The group also supports the extension of the workforce housing tax credit.