A bill that would reduce the amount of business tax credits the state awards is advancing at the statehouse. Democrats say tax credits have grown by 350% in the past five years and this year the state will award half a billion dollars in tax credits. The bill proposes a variety of new limits, limits that business groups oppose.
Bill Brown is chairman of the Iowa Association of Business and Industry’s board of directors. He is also a lawyer and his firm does work connected with one of the state funds targeted for cutbacks. “It sends a signal…that we’re really not open for business here,” Brown says. Brown calls the proposal to cut the state fund that provides venture capital to start-up businesses a “knee-jerk reaction” to the problems with the state tax credit for filmmakers. Democrats propose reducing that fund from 100-million down to 60 million.
Senator Joe Bolkcom, a Democrat from Iowa City, is the chief architect of the tax credit cutting plan and he is unmoved by Brown’s argument. “Their arguments were not compelling to me,” Bolkcom says. “If they can come back and convince us that we should put more money in the pot, then we can come back and do that at a later date.”
The Democrats’ tax credit proposal would eventually scale-back state tax credits by $115-million over a three-year period. Representatives of a variety of other groups pressed their case to legislators during a meeting on the tax credit issue on Monday.
The Farm Bureau is urging legislators to maintain a tax credit for beginning farmers. The Iowa Catholic Conference wants lawmakers to maintain a tax credit for Iowans who contribute to private school scholarship funds.