The Business Record reached out to Iowa Senate and House leaders from both parties about their plans in the 2019 legislative session for Future Ready Iowa and possible action on the corporate income tax rate. Here are responses to the questions as of Monday before the governor’s Condition of the State address.

Senate President, Charles Schnieder, Republican

What are Iowa lawmakers’ plans for Future Ready Iowa this year?

Employers tell us that access to skilled workers is a major barrier to economic growth in Iowa, so addressing this issue is a priority for me. I expect Gov. Reynolds will include a request to fully fund the Future Ready Iowa program in her proposed budget. I expect there will be broad support in the Legislature for this request. Additionally, I look forward to working with the governor and my colleagues in the Legislature and the business community to find other creative solutions to Iowa’s workforce challenges.

What action should be taken on Iowa’s corporate tax rate? If no action is necessary, why is that the case?

In 2018, I was proud to support the most significant tax cut legislation in Iowa history. Once fully implemented, the legislation will simplify the corporate tax code and bring corporate rates down by nearly 20 percent. Unfortunately, the 9.8 percent rate on corporate income of $250,000 and higher is still one of the highest in the country. We have more work to do to bring down income tax rates and make Iowa more competitive. I expect addressing both corporate and individual income taxes will be a multiyear project for the Legislature. As we monitor the effects of the 2018 reforms, we will explore opportunities to drive down income tax rates even more.

Senate Minority Leader Janet Petersen, Democrat

What are Iowa lawmakers’ plans for Future Ready Iowa this year?

We need to make sure job training and education are affordable for all Iowans. One of my top priorities in 2019 will be to invest more resources in initiatives that create jobs, expand opportunities and grow the economy. It’s unfortunate that some of the funding for the Future Ready Iowa bill was the result of taking money from other successful job creation efforts. That is not a good, long-term strategy. In 2019, we need to fully fund programs for them to work. 

What action should be taken on Iowa’s corporate tax rate? If no action is necessary, why is that the case?

We believe it will be important to work in a bipartisan manner on a tax plan that meets these principles:

• Tax reform must be fair. Iowa’s tax system has a number of tax brackets in an attempt to make the income tax system progressive so that those with lower incomes pay at lower rates. However, according to the Iowa Policy Project, when all state and local taxes are accounted for, Iowa’s lowest income earners pay the largest portion of their income in taxes. Changes to Iowa’s tax system should address this situation and not make this problem worse.
• Tax reform must make Iowa’s tax code more transparent so Iowa can show its true competitiveness to the nation. Iowa’s tax code has become a confusing collection of credits, deductions and exemptions that has left the state with high tax rates that do not accurately reflect the cost of living and doing business in Iowa. Our tax rates appear to be among the highest in the nation — but according to the Tax Foundation, the amount paid by Iowans through our tax system ranks Iowa in the middle of the pack.
• Tax reform needs to take into account our current budget situation. We just completed a legislative session where funding was slashed for nearly every part of state government, and there is no sign the situation will be improving next year. We must not repeat the mistakes of Kansas, which passed massive tax cuts that have resulted in a continual budget crisis where schools are underfunded and has forced the state to balance the budget by stealing from road funds and raising other taxes.
• Tax reform needs to examine corporate tax credits. We have cut state funding for vital state programs that serve some of our youngest and most vulnerable Iowans. So far, corporate tax credits have been exempt from these cuts. We must determine if these corporate tax credits a good return on the investment and benefit Iowans, not just those few businesses.

House Speaker, Linda Upmeyer, Republican

What are Iowa lawmakers’ plans for Future Ready Iowa this year?

Future Ready Iowa was one of our top priorities last session, and it remains a priority as we implement it. Ensuring that Iowa employers have a workforce with the skills necessary for the 21st-century economy is critical to continued growth. Even with our unemployment at its lowest point on record and tied for lowest in the nation, Iowa employers still have more than 60,000 job openings that they are looking to fill.

To meet this need, it will require continued collaboration between our K-12 schools, community colleges and the business community. Connecting Iowa students with firsthand, real-world job experience while they are still in high school is a great way for them to gain job skills in high-demand areas, as well as a potential career after graduation. We will continue to look for opportunities to expand these efforts.

Future Ready Iowa is still in need of some funding, so we will see what Gov. Reynolds includes in her budget request and take that under consideration.
What action should be taken on Iowa’s corporate tax rate? If no action is necessary, why is that the case?

Last session, we passed a monumental tax reform bill that was the largest tax cut in Iowa history, delivering $400 million in tax relief to families and small businesses this year. As part of this tax overhaul, we reduced the top corporate rate from a national high of 12 percent down to 9.8 percent, along with some other changes. 

While I don’t expect any major changes to the income tax this session, there may be some fixes to last year’s bill. We need a chance to let those changes settle and see how they impact the state’s budget and economy.

We understand that for businesses to grow and expand, it is critical that Iowa has a competitive structure and will continue to look for opportunities to do that.  

Majority Leader, Chris Hagenow, Republican

What are Iowa lawmaker’s plans for Future Ready Iowa this year?

We continue to hear from employers across Iowa that the availability of a skilled workforce is their biggest challenge to growing their businesses. Connecting our K-12 schools with community colleges and local businesses will help assemble the workforce of tomorrow.

Future Ready Iowa is part of the solution. We want to continue building off last year’s efforts, and look forward to working with the governor to see what we can accomplish this year. This is a top priority for us as well as the business community.

What action should be taken on Iowa’s corporate tax rate? If no action is necessary, why is the case?

We passed a historic income tax bill last session, which included some corporate changes. House Republicans will continue to look for ways to make Iowa’s tax code competitive so that businesses are able to grow.