This year’s session of the Iowa Legislature will include discussions of several topics of interest to Greater Des Moines business leaders.

Among them: local option sales taxes, water quality, tax credits for renewable biochemical production and workforce development. 

As lawmakers settle in, it now appears that a tax credit for the production of high-value chemicals such as solvents, food additives and perfume ingredients from the byproducts of biofuels production may have a better chance of passing this session.

Depending on whom you ask, the proposal — a top priority of the Iowa Economic Development Authority and biofuels interests — either was held hostage in a nasty fight over education funding that included a still-controversial veto by Gov. Terry Branstad, or it stalled because Democrats questioned if the full cost to the state treasury had been revealed. 

The idea was to carve out part of IEDA’s existing tax credit allotment to put Iowa in a position to add value to one of its top industries. Iowa leads the nation in biofuels production. 

A new report by the Cultivation Corridor and the Iowa Biotechnology Association said the lack of state aid for biochemical production is “a serious impediment to the state’s potential to emerge as a center of gravity for biorenewable chemical investment and job creation in the coming years.” 

In another tax-related matter, Greater Des Moines municipal officials again will ask lawmakers to allow cities to add a 1 percent local option sales tax on their own, with voter approval. As it stands, the metropolitan area has to vote as a bloc, and the local option tax has been soundly defeated each time it made the ballot. At the same time, most other major cities in the state already have the tax because they don’t have contiguous cities and therefore can vote alone.

Legislative leaders seem willing to discuss a change that would let, say, West Des Moines vote to add the tax on its own. But some lawmakers still are leery of any tax increase, and the Des Moines metro area often struggles to gain support from rural lawmakers.

Lawmakers also will be under pressure to take significant action to clean Iowa’s waterways. “Iowa’s water is an embarrassment,” said Larry James, a Des Moines real estate attorney and co-chair of a Greater Des Moines Partnership task force on water and soil issues. If lawmakers don’t act this year, James said, it will encourage talk of regulation by the U.S. Environmental Protection Agency, something agricultural interests and many others want to avoid. 

Workforce development also will prompt discussion. A statewide task force appointed by the Legislature calls for “career and academic” plans at schools and other changes meant to prepare students for a whole range of workplaces struggling to find enough employees. The Iowa Department of Education and the Iowa Business Council support the changes, but legislative leaders warn that schools already struggle to pay for their basic needs, and it may be hard to find enough money to add new requirements.

Renewable biochemicals tax credit
Kent Darr reports that an idea that has strong support in the business community — a tax credit for production of chemicals from byproducts of renewable fuels manufacturing — appears to be getting serious consideration. In the House of Representatives, which passed the legislation twice last session, it’s  matter of driving home the message that this could be a big job producer and economic development boost for Iowa, the nation’s leading purveyor of biofuels, backers say. 

Local option tax
Darr also reports that cities across the state have taken advantage of locally approved sales taxes to help cities pay their bills with something besides already-stressed property tax collections. But the current state law means that cities in the Des Moines area have to vote as a bloc on local option sales taxes, and such taxes have been overwhelmingly rejected by voters. The past several years, Greater Des Moines cities, including Des Moines and West Des Moines, have pushed for a change that would allow each city to vote independently to add the local sales tax just in its borders. Legislative leaders appear ready to allow a debate on the issue. 

Workforce development
Joe Gardyasz reports that lawmakers will be asked to consider a statewide task force’s ideas to help fill a shortage of so-called middle-skills workers. Proposals call for changes at school districts that more closely align them with businesses in advanced manufacturing, health care and other technical fields that require more than a high school education, but perhaps less than a college degree. Part of a plan supported by the Iowa Department of Education and the Iowa Business Council would update core curriculum plans to convert them to “career and academic plans” with more attention to career and technical education. As with most education plans, money is an issue. 

Water quality
Perry Beeman writes about the governor’s unusual and controversial proposal to extend a school-related sales tax to help finance water quality work, as Democrats and Republicans alike continue to simmer over Branstad’s earlier veto of lawmakers’ agreement to use $20 million from annual balances to pay for water quality work. Among the other ideas: reaching out to the U.S. Department of Agriculture for more help, establishing a new tax credit for landowners who do conservation work, and supporting a new 3/8ths of 1 percent sales tax specifically for conservation and recreation projects. All of it appears dicey at best.