Democrats in the Iowa Senate have passed a bill that scales back some of the tax credits the state awards to businesses, entrepreneurs and beginning farmers. Senator Joe Bolkcom, a Democrat from Iowa City, said the state can’t afford to offer half billion dollars in tax credits in the current economic climate.
“There were members that wanted to go further. There were those that wanted to be cautious,” Bolkcom said this afternoon to close Senate debate on the bill. “I think we’ve struck a good balance.”
All 32 Democrats in the senate voted for the bill. All 18 Republicans in the Senate voted against it. Senator Randy Feenstra, a Republican from Hull, summed up the G.O.P.’s objections. “States around us — Minnesota, Nebraska, Wisconsin — are all increasing their tax credits to generate more business and more opportunity,” Feenstra said. “It seems the states around us have a direct, opposite rationale about how to create business. Iowa reduces tax credits and it shows business and companies that we are closed for business.”
Senator Matt McCoy, a Democrat from Des Moines, called Feenstra’s remarks “unfair.”
“I think that Iowa is open for business and I think we want to create an environment in the State of Iowa where business can prosper and grow,” McCoy said. “And one of the ways we do that is to ensure that the programs we have working out there are actually good programs and that they’re appropriate and that they’re administered properly.”
Senator David Hartsuch, a Republican from Bettendorf, said business owners can’t hire more people if their tax burden increases. “I’m very concerned about the impact that this bill is going to have on businesses that might want to relocate to Iowa,” Hartsuch said. “I’m very concerned abut those businesses that rely on these tax credits so that they’re not overburdened with taxes.”
The bill passed the Senate, over the objections of Republicans like Hartsuch. Democrats outside the legislature who’ve been pressing for big changes in the state’s premiere tax credit for research activities dismiss the senate’s bill as little better than doing nothing on the issue.
The legislation does continue the suspension of the state tax credit for filmmakers for at least two more years. The bill now goes to the House for consideration.