Iowa House Assistant Majority Leader Rep. David Young told greater Des Moines area business and elected leaders Tuesday that the Legislature will have a “vociferous debate” on further action to reduce taxes during the 2024 legislative session.

“It’s kind of like tax limbo, you know? How low can you go, and at what rate and speed?” Young said.

Young made the comments during the Greater Des Moines Partnership’s 2024 State Legislative Leadership Breakfast.

The District 28 Republican was responding to a question from the Partnership’s 2023 Government Policy Chair Robert Haus, who asked what policies or strategies the House Republican Caucus would pursue to attract and retain business during the upcoming session, which starts Jan. 8.

The Partnership’s annual panel discussion, held at the Des Moines Embassy Club West, also included State Sen. Mike Bousselot, R-Ankeny; Senate Minority Leader Pam Jochum, D-Dubuque; and Iowa House Minority Leader Rep. Jennifer Konfrst, D-Windsor Heights.

The Partnership hosted the event in tandem with the release of its 2024 legislative priorities: economic development, work-based learning, child care, housing and placemaking.

Andrea Woodard, senior vice president of government relations and public policy for the Partnership, told the Business Record that the Partnership’s agenda for the 2024 Legislature was created by its Government Policy Council with input from Partnership members and investors through a survey and various meetings.

The Partnership only takes positions on bills on which there is a consensus, she said.

Taxes
During the panel discussion, Young said that the Republican Caucus is scheduled to meet Thursday. He told the Business Record after the event that members are also waiting to hear what Gov. Kim Reynolds could say about tax issues in her annual Condition of the State Address.

In 2022, Reynolds signed a 3.9% flat tax into law that was scheduled to phase in over several years, according to a March 2022 article from Iowa Capital Dispatch. A majority of Democrats opposed the bill, saying it provides more benefits to high-income earners.

But proposals in the 2024 session could include further reducing Iowa’s tax rates or accelerating the timetable to reach 3.9% more quickly, Young said.

The assistant House majority leader told the crowd Tuesday that any policy advanced by the Legislature or governor would need to pay attention to future state revenues, inflation and “ebbs and flows” in the economy.

“The goal here is, in the most responsible manner, make sure that we are giving back as much as we can to those who earn those dollars, the taxpayers, the workers,” Young said.

Child care
Jochum said the lack of child care “has been a major barrier for many Iowans to enter the workforce.”

The Senate minority leader said Tuesday that there are bills proposed that will increase eligibility for Iowa’s child care assistance program, changing the income requirement from 160% of the federal poverty level to 200%.

“For a family of four, that would be an income of $60,000 a year or less. For a family of two, it would be about $39,000 a year, and they would be eligible for some assistance from the state of Iowa to help offset the cost of their child care,” Jochum said.

The program’s income threshold was increased during the 2023 session, up from 145% of the federal poverty level.

But Jochum said the biggest challenge is how to pay child care workers in Iowa “a living wage with benefits.”

According to Jochum, the average child care worker in the state makes $14 per hour.

“That means that most of those workers who take care of our children, eight to 10 hours every day, actually qualify for SNAP benefits, housing assistance, the list goes on,” she said. “Now, if your kids are our most valuable resource, I would think that we’d want to pay them a wage that reflects their value.”

Jochum said she would like to see a local grant program, which has been implemented in Dubuque that directly bolsters wages and benefits for child care workers, be used as a model at the state level. The $560,000 local grant was paired with a $250,000 contribution by Dubuque’s business community in a public-private partnership, she said.

Economic development
Young said he thinks the Legislature should take another look at the Major Economic Growth Attraction program (MEGA) that would provide incentives to large companies outside Iowa – including biosciences, advanced manufacturing and research and development groups – to move to or expand in Iowa.

These would be projects that could develop 250-acre-plus sites that could potentially bring $1 billion in investments.

Woodard told the Business Record that the Partnership supports investment in the MEGA program.

Previous legislation to get the program started stalled in 2023. That version, House File 642, would have allowed foreign businesses to acquire agricultural land in Iowa and receive tax credits if the foreign business is from a U.S.-allied country.

“We believe that we should revisit that,” Young said. “And maybe tweak it a little bit or maybe have a two-tier system where you have those giant sites and then maybe some more regional sites in some more rural areas to kind of spread that out” statewide in rural and metropolitan areas.

“So we can take advantage of the workforce that is out there that is wanting to work and match them up with those skills and the apprenticeships and a lot of these jobs that are out there that we need to fill,” Young said.

Housing
According to Konfrst, Iowa will need 25,000 new housing units in Iowa by 2030 across rural, urban and suburban communities.

She said Democrats in the Iowa House have introduced legislation to expand a first-time homebuyers assistance program; a grant program to help people stay in their home by investing in things like new windows and roofs; and looking at zoning regulations to allow conversion of empty commercial buildings to housing.

Konfrst was uncertain Tuesday if any of these initiatives would be supported by the Republican majority.

She said lawmakers are talking to community lenders to help make information on affordable housing options more available.

– Business Record Senior Staff Writer Michael Crumb contributed to this story.

Related: Partnership focuses on workforce development in its 2024 legislative priorities