July 23, 2014

Job fair in Davenport Thursday for retiring soldiers

Home-baseOver three dozen companies plan to participate in an event in Davenport this Thursday aimed at connecting veterans with job openings in Iowa. It’s part of the state’s “Home Base Iowa” initiative and Governor Terry Branstad plans to be there for the job fair.

“Last November I announced the new program, including an incentive package for veterans, that would help recruit veterans to work in Iowa after they complete their military service,” Branstad says.

So far 86 veterans have contacted the State of Iowa through the Home Base Iowa website and officials say 23 veterans have gotten jobs through the program. Branstad signed legislation on Memorial Day that erases state income taxes on military pensions and allows veterans and their families to pay in-state tuition if they go to an Iowa college or university. Howard County and Greene County have offered additional local incentives for veterans and have been declared “Home Base Iowa” communities. To earn the designation, an area must get at least 10 percent of the area’s businesses to agree to hire veterans.

“Scranton Manufacturing is located in Greene County,” Branstad says. “They have already hired a veteran throught the Home Base Iowa program and they have interviewed several additional veterans.”

Twenty-nine other cities and counties are completing the paperwork in hopes of being declared “Home Base Iowa” communities as well. Branstad says national publications for the Veterans of Foreign Wars and the American Legion have listed the new benefits available in Iowa for soldiers who are leaving the military.

Survey finds 67 percent of Iowans oppose paying sales tax on internet purchases

The National Taxpayers Union and a D.C.-based think-tank are touting a new survey which finds a majority of Iowans are opposed to paying sales taxes on internet purchases.

A Gallup poll last year found 57 percent of Americans were opposed to internet sales taxes and the groups’ survey, which was conducted in Iowa this past May, found 67 percent of Iowans were opposed to the concept.

Andrew Moyland of the R Street Institute was at the Iowa capitol today to discuss the survey with legislative staff and representatives from Iowa business groups. Moyland suggested candidates for all offices should be wary of allowing states to collect internet sales taxes, including prospective presidential candidates like Ted Cruz, Mike Lee and Marco Rubio who’ve been campaigning in Iowa. There may soon be a vote in the U.S. Senate on a bill that would give states greater authority to collect sales taxes on internet sales.

“This is definitely coming to a head now and I think that folks who are supporters of this would like to get this done as soon as possible because even supporters don’t want to be on record supporting an internet sales tax bill so close to an election,” Moyland said during an interview with Radio Iowa.

Moyland praised Chuck Grassley, Iowa’s Republican senator, for opposing what’s called The Marketplace Fairness Act that would give states broader authority to collect sales taxes on internet purchases. Others who support the legislation say Main Street businesses see more and more people who come in, look over the merchandise, then go online to make the purchase — escaping the sales taxes they’d pay if they bought the product in the store. Moyland rejected that argument.

“There are 46 different states with sales taxes and 9,998 different taxing jurisdictions across the country,” Moyland said, “and so if you’re asking online retailers to have to jump through all those hoops when brick-and-mortar retailers are just jumping through one where they’re physically located, I think that’s the opposite of a level playing field.”

According to a University of Tennesse estimate, $88 million in sales taxes that were legally due to the State of Iowa were NOT collected on internet purchases made in 2012. Moyland argued that “pales in comparison” to the sales taxes the State of Iowa fails to collect because the state sales tax is not charged on all services. For example, boat repair services are not subject to the Iowa sales tax and, ironically, the state sales tax is not charged to any “on-line computer service” operating in Iowa. Here’s the comprehensive list of state sales tax exemptions for both goods and services.

Branstad says 2010 promise was to cut size of gov’t, not size of budget

Governor Branstad says he’s keeping his 2010 campaign promise to shrink the size of state government and reduce the number of state employees, but a new report shows there’s been an increase in the number of full-time workers on the state payroll during Branstad’s current term as governor.

“Governor Branstad has a problem in trying to reconcile all of the promises he’s made to what’s real,” says Jack Hatch, the Democrat who is running against Branstad.

A document from the Legislative Services Agency shows the number of state employees grew by 3500 during the first two years of Branstad’s current term. Branstad says he’s cut the workforce in the executive branch by over a thousand during the past three years, but Branstad says he cannot control hiring decisions in the other branches of state government OR at the three state universities. Almost 3900 new employees were hired at Iowa, Iowa State and U-N-I during the first two years of Branstad’s current term, but Hatch says those hires were Branstad’s to oversee.

“It’s an inadequate response when the governor of this state, the CEO of our state government, blames other people for his inability to manage the state,” Hatch says. “He appoints the Regents. He has significiant influence over the growth of this state budget.”

The size of the state budget has grown by half a billion dollars over the past two years, but Branstad says he never promised to cut overall state spending by 15 percent.

“What we’ve done, and I want to point this out. we’ve reduced the size and cost of state government and redirected more of the money to education and to property tax relief,” Branstad says.

Branstad says he believes that’s the expectation voters had back in 2010 when he was reelected to a fifth term.

“I think they wanted us to reduce the size and cost of state government, not cut education and not raise taxes,” Branstad says, “and we did exactly what we promised to the voters.”

As for the other two branches of state government, the number of employees in the legislative branch has declined by six percent over the past five years. The state’s court system saw a 17 percent reduction in staff over a 10 year period, but during the first two years of Branstad’s current term 23 more employees were hired in the judicial branch of state government.

Several factors make Iowa a draw for data centers

Iowa has become home to data centers or server farms for some of the biggest players in the tech industry. Why do companies like Google, Facebook and Microsoft choose a state in the middle of the country to store their data?

John Roth is a data center facilities manager for OneNeck IT Solutions in Cedar Falls says one advantage of securing data in Iowa is you don’t have to worry about earthquakes, hurricanes and other natural disasters. “You want to build where you can avoid that and have your facility maintain its up time. If you look at maps, Iowa has very low risk,” Roth says. He says tornadoes are about the only thing you have to worry about and you can build to mitigate that risk.

There are now large data facilities in operation or under construction in Council Bluffs, Altoona and West Des Moines. Iowa State University economist Dave Swenson says Iowa’s cheap energy prices are a major draw for the facilities. “These companies consume an unbelievable amount of electricity. They’re monsters. They eat electrify. That’s how they run, they require massive amounts of power,” Swenson says.

Iowa Economic Development Authority director, Debi Durham, says Iowa’s cheap electricity is due in part to the fact the state doesn’t apply sales taxes to the utility. Additionally, she says Iowa electric companies keep costs low with the investment in new renewable energy, and the diversity of their portfolios. “And then you have really strong investor owned utilities here, and then you couple those with the rural electric coops with are also strong in economic development, and then the third player is the municipalities, and then to be very competitive themselves,” Durham says.

ISU economist Swenson says Iowa’s attractive tax incentives sealed the deal for the companies locating the operations here. “Iowa is much more liberal in its range of state and local government incentives that it affords businesses,”Swenson says. “Other states, usually, usually are much more circumspect both in the amounts, the duration, the scope and the type.” Swenson says it’s doubtful whether places like Altoona and West Des Moines get back what they give up in property taxes.

However, Debi Durham says the state isn’t going into these agreements blindly. She insists Iowa will get the jobs Google, Facebook and Microsoft promise. “We actually hold all of our clients accountable –so there’s a day of reckoning down the road. And if they don’t meet those numbers then we exercise claw-backs. Which means you have to pay back incentives, or you don’t get to take, if you haven’t taken them,”Durham says.

When Microsoft announced West Des Moines as the site of its newest datacenter, many in the company’s home state of Washington were not pleased. Some speculated Iowa’s generous tax incentives tipped the scales, despite several logistical advantages of being in the center of the country. Both Microsoft and Facebook declined to be interviewed for this story.

By Sarah Boden Iowa Public Radio

 

State fiscal year concludes with tax receipts $185 million below expectations

State tax receipts in June were “flat” according to the latest information from the Legislative Services Agency. June was the final month of the state fiscal year and Jeff Robinson, a tax analyst for the Legislative Service Agency, says state tax collections for the past 12 months were $185 million below the official estimate.

“We have had plenty of time to plan for it and we had excess revenue above expenditures for this particular fiscal year,” Robinson says, “so while not a good thing, it’s not as it might be in a different fiscal year.”

Robinson says it’s too early to calculate how much money was left unspent in the state’s 12-month-long budgeting year. The accounts won’t officially be closed until September.

Personal income tax payments to the state were down 2.7 percent over the past 12 months. Robinson says that’s mainly because of federal tax law changes.

“It’s not a great year for personal income, but it’s not a bad year, once you adjust for that,” Robinson says.

Farm income is down this year compared to last as well.

“And you can see that when farm tax returns were filed, this was not as good a year,” Robinson says.

Sales and use tax payments to the State of Iowa were up $97 million for the fiscal year. State receipts surpassed $6.6 billion for the past 12 months.

IRS official, in email to co-worker, floated idea of auditing Grassley

Congressional investigators have released email showing a former IRS official wondered if Senator Chuck Grassley should be audited to see how he responded to an invitation that mistakenly was sent to her.

Lois Lerner is at the center of the controversy over IRS scrutiny of tax documents from conservative groups. Lerner got an email in 2012 from a group that actually was inviting Grassley to an event and offering to pay for Grassley’s wife to attend. Lerner asked a co-worker via email if Grassley should be audited to find out if he accepted. That IRS colleague advised against it and the matter apparently was dropped.

The House panel investigating the IRS calls it “shocking” and “unbelievable” that an IRS official would even think of launching an investigation of “a sitting Republican United States Senator.” Grassley says the incident is “very troubling” and the kind of thing that “fuels the deep concerns many people have about political targeting…by officials at the highest levels” in government.

Grassley says neither he nor his wife attended the event Lerner learned about from the mislabeled email invitation. The congressional committee which released the email exchange blacked out the name of the event’s sponsor.

Senator Grassley ‘very skeptical’ about IRS lost email

Iowa Senator Chuck Grassley is fuming over the latest development in the investigation into accusations the IRS targeted conservative political groups. Two years worth of emails from a key figure in the probe have vanished. Grassley, a Republican, compares the disappearance of all of that evidence to a child claiming a dog ate his homework. “I can’t believe it,” Grassley says. “Just the very period of time with the very single individual that we want information from that somehow that person’s email has disappeared.”

IRS officials say the emails sent and received by Lois Lerner, the former I-R-S official at the heart of the controversy, have been lost forever. The agency says all records of the emails from the last two years are gone, including computer hard drives that would have had back-up copies. The IRS says those drives have been recycled.

Grassley says he’s “very skeptical” of the claims. “I’m wondering if email can really disappear,” Grassley says. “I’ve heard on television both sides, ‘Yeah, I can’t get it,’ and other people say, like I believe, I can’t believe all of the records and email just disappear all at the same time.”

If congressional investigators can’t get the emails Lerner sent and received from -her- computer, he suggests they seek out emails from anyone she could have been communicating with during that time. Grassley says, “We might not find all two years of emails, but we might find enough that gives us some record of her involvement.” The IRS has already drawn harsh criticism from Republicans for reportedly giving the tax-exempt paperwork from conservative groups extra scrutiny.

The agency is accused of being especially harsh on the requests for tax-exempt status filed by any groups associated with the Tea Party.