There’s a bit of a fight among Democrats over a bid to limit tax credits for businesses conducting research activities in Iowa. Governor Culver has suggested some limits on certain tax credits, but his proposal doesn’t go as far, or as low, as a plan being considered by his fellow Democrats in the state senate.

Iowa Department of Economic Development director Mike Tramontina defends the concept of giving companies that engage in research and development a state tax credit. "The research activity credit may be the single-most important economic development direction that we want to go," Tramontina says.

Some Democrats complain the bulk of the credits go to out-of-state companies that have research facilities in Iowa. Supporters of the tax credit, like Tramontina, say now is not the time to do away with the credit.

"The research activity tax credit needs to be saved…at some amount," Tramontina says. "It’s the kind of companies and the kind of work that we want done here." Business lobbyists crowded into a committee room at the statehouse yesterday to air their objections to limits on the research activities tax credit, arguing Iowa would be the only state to take such action while many other states are considering expanding such credits as a way to stimulate the sagging economy.