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SWEEPING
ECONOMIC DEVELOPMENT BILL PASSES IN SESSION…
IOWA
IS “OPEN FOR BUSINESS”
The
governor called the Legislature into special session on Tuesday,
September 7. Republicans
charged ahead with a comprehensive economic development package
that offered relief to Iowa employers in a number of significant
ways.
The
first is tax reform. The
legislation we passed allows businesses to couple with the bonus
federal depreciation schedule.
As a result, this allows Iowa farmers and small businesses
to keep more than $70 million that can be used for expansion and
equipment purchases.
The
second is workers’ compensation reform. Iowa businesses
have been plagued for years by the high cost of workers'
compensation insurance. Everyone agrees that injured workers
need to be fully compensated for their injuries.
Unfortunately, some aspects of Iowa's law were especially
onerous on Iowa businesses by making them pay twice for the same
injury. This bill will prevent this from occurring in
the future, while still protecting the worker's right to be
compensated if they suffer additional work-related injuries.
This agreement also improves existing language that gives
injured workers a fresh start when they go to a new job. We
hope that this will provide additional incentives for Iowa
businesses to hire those who have suffered work-related injuries
in the past.
Third,
we restored the values fund, which puts Iowa on an even playing
field with other states that offer economic incentives.
Nothing is more frustrating than seeing other states lure
away Iowa’s existing and
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potential
companies because surrounding states are willing to offer incentives
that we won’t. As a result of this bill, Iowa’s Department of Economic
Development can effectively compete with these states.
AS
ECONOMY CONTINUES TO IMPROVE, SO DO STATE REVENUES
General
fund receipts for August totaled $544.1 million, which is $81.4
million more than was collected in August of 2003.
This is 17.6% MORE than just last year!
To date, $886.2 million has been collected this year, which
is 11.3 percent more than the same period last year and outpaces the
estimated rate of annual growth, which sits at a much lower,
negative 0.5 percent.
Personal
income tax receipts show that more Iowans are earning more money.
Receipts were $226.3 million during August, a full 9.6
percent more than August of 2003.
For the fiscal year, income tax receipts total $397.4
million. This is an
increase of $29.3 million over last fiscal year. This is an 8.0 percent increase.
For
the year, personal income tax receipts are estimated to grow by 1.2
percent.
August
sales tax receipts were up 10.5 percent over August of 2003, showing
that our retail businesses are also benefiting from the economic
upswing. For the July
and August period, receipts increased 12.6 percent compared to last
year. For the entire
fiscal year, sales tax receipts are up nearly 5 percent.
Year-to-date
growth is at an impressive 11.3 percent, with more good news
expected as we head into the fall.
All four major tax categories showed growth (income, sales,
use, corporate).
Ways
& Means Update
Bills
introduced introduced in
committee
this week:
HF
2582-
An
Act concerning regulatory, taxation, and statutory requirements
affecting individuals and business relating to economic
development, workers' compensation, financial services,
unemployment compensation employer surcharges, income
taxation bonus depreciation and expensing allowances, and
civil action appeal bonds, and including effective date,
applicability, and retroactive applicability provisions.
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