Public Policy Update: Priorities Move Forward and the Impact of Clarkonomics

Public Policy Update: Priorities Move Forward and the Impact of Clarkonomics

March 28, 2024 | Public Policy

State Policy Update

Last Friday marked the second, and final, legislative funnel of the session. Any policy bills had to have passed one chamber and advanced out of full committee in the opposite chamber to have survived. Ways & Means and Appropriations bills are exempt from funnel deadlines. Additionally, leadership can also move a bill to the unfinished business calendar for it to still be considered viable. These are typically seen as priorities to leadership. You can view a more comprehensive list of bills status here.

The state's Revenue Estimating Conference (REC) also met last Friday to set the final FY24 budget estimates. The legislature is directed to use the March projections to set the budget for this legislative session. The REC also updated the FY25 projections from the December meeting and provided the first predictions for FY26. Revenue projections for FY24 decreased to -2.2% from the previous -1.0% projection in December, with the total General Fund Revenues equaling $9.626.5 million.

Now that the estimates have been released, budget and tax reform discussions are likely to increase at the legislature as the per diem expense payments for legislators expire. The final scheduled day for the legislature is April 16^th. The Economic Alliance continues to focus on policies related to our 2024 public policy agenda.

Expanding Work-Based Learning

• The Governor's Work-BasedLearning bill (SF2411/HF2516) continues expanding project-based learning programs and makes existing ones more efficient, including Last Dollar Scholar, adding career and technical education classes that 9-12 schools are required to offer, and allowing work-based learning when school is not in session. We support this legislation. Status: Appropriations bill - not subject to funnel deadline.

Increasing Housing Options

• HF2420 increases the caps for the Workforce Housing Tax Incentive program. We support increasing the cap to $50 million, and the allocation for small cities to $25 million. Read more here. Status: Ways & Means bill - not subject to funnel deadline.

Economic Development Competitiveness

• The "Major Economic Growth Attraction Program" or "MEGA Program" legislation (SF574) would create a fund for Iowa to compete for large-scale economic development projects that provide high-paying jobs and capital investment. We support this legislation. Click here to read more about the legislation. Status: Ways & Means bill - not subject to funnel deadline.

Promoting Predictable & Fair Taxes

• There are currently 3 tax-related bills moving through the legislative process. As they work their way through, we continue to call for tax structures that are simple, predictable and promote fairness and fiscal responsibility.
• The Governor's bill (SF2398/HSB543) calls for close to $3.8 billion in tax cuts over the next five years, lowers personal income tax to a flat 3.65% to go into effect in 2024 and effective 2025, the rate drops to 3.5%. Read more here. Status: Ways & Means bill - not subject to funnel deadline.
• SSB3141 is the Income Tax Elimination bill that would phase down the individual income tax to a flat 3.65% by Tax Year '26, lower Iowa's corporate income tax to 4.9% using the current method adopted in 2022, and transition the Tax Relief Fund to a trust fund with revenues generated used to gradually eliminate individual income taxes. Status: Ways & Means bill - not subject to funnel deadline.
• SJR2003/HJR2006 proposes a constitutional amendment to require 2/3 approval of both the Senate and House to increase tax rates. Status: Placed on the House and Senate Unfinished Business Calendar.

Protecting Employers

• E-Verify (SF 108) is the employment verification (e-verify) bill that requires employers to utilize the federal employment verification database to confirm that new hires are authorized to work in the U.S. and provides penalties for employers. We continue to oppose the legislation. Status: Died in the second funnel.

Passenger Rail Across Iowa

• HF591/SF2315 enacts the Midwest Interstate Passenger Rail Compact to develop intercity passenger and high-speed rail traffic and allows the state to join the existing compact. We support this legislation as it is the first step in Iowa seeing passenger rail from the Quad Cities, through Iowa City and Des Moines, to Council Bluffs. Status: Placed on the House and Senate Unfinished Business Calendar.

Child Care Availability

• We support child care facilities paying less in property taxes so they can use those dollars toward other efforts, like workforce wages. SSB3181/HF2655 designates child care facilities as residential property to decrease property tax costs. This language is also included in the Governor's tax proposal. Status: Ways & Means bill - not subject to funnel deadline. Passed House 94-1 on 3/19.

Community Attraction & Livability Efforts

• SF2394 Creates an Iowa Major Events Tourism program to give financial assistance to groups for major tourism events that have a measurable economic impact. Does not allow an entity receiving money from this fund to receive funds from the Sports Tourism fund. Status: Appropriations bill - not subject to funnel deadline.

More News

Election 2024: Last Friday marked the final day state and federal candidates could file the necessary paperwork to run for office. Read about who's running in area state races and who's running in area federal races this fall.

Serve Your Community: The City of Cedar Rapids is currently seeking citizens to apply to City Boards & Commissions: Read more about how to apply. Applications are due by April 30, 2024. Contact Barbra Solberg if you have specific questions about the process.

Clarkonomics: Common Sense Institute (CSI) Iowa has released "Clarkonomics", a detailed analysis of Caitlin Clark's economic impact on the Iowa economy. The release coincides with the kick-off to 'March Madness,' the annual NCAA tournament. Clark and the Hawkeyes are scheduled to play their first game on Saturday against the winner of the West Virginia vs. Princeton matchup. The study is not the first to explore the economics of Clark's superstardom, but CSI takes a unique approach. Past reports and news coverage have highlighted the money behind Clark's brand deals, ticket sales, and media coverage, along with other anecdotes of economic impact. In contrast, this report takes a data-drive approach to quantifying the impact of Iowa women's basketball and Caitlin Clark's extraordinary college career on the economy of the state of Iowa. Read the full report here. You can follow CSI Iowa on LinkedIn,Instagram and Facebook.

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