The governor has approved the renewal of a tax incentive for businesses that set up shop in five cities situated along Iowa’s borders.
All but five legislators voted for the legislation and Governor Terry Branstad signed it into law Thursday afternoon.
“Many of our neighboring states, unfortunately, have lower taxes than we do,” Branstad said during a bill signing ceremony in his statehouse office. “The Targeted Jobs Program allows some of our border communities to better compete with surrounding states by giving them a much better tool for off-setting Iowa’s uncompetitive income tax rates.”
Paul Eckert, the city manager for Sioux City, says 1500 jobs in Sioux City can be traced back to the tax break established when the program began in 2006.
“It was our top legislative priority in Sioux City. We think it’s incredibly important. We greatly appreciate the bipartisan support,” he said. “Ninety-eight million dollars of value has been created in Sioux City because of this legislation, so it was essential for us to complete — to bring jobs (and) retain jobs in Sioux City.”
The program is only available in Sioux City, Council Bluffs, Burlington, Fort Madison and Keokuk and the bill the governor signed into law yesterday extends the program for five more years. Businesses that promise to locate or expand in those five cities may qualify for a state withholding tax credit under the program. The business can claim a tax credit that amounts to three percent of the gross wages it pays to newly hired employees. The cities also get an equal amount from the state. It can be used on projects, like streets, that benefit the business involved.