The Iowa Chamber Alliance wants the Legislature to raise taxes on cigarettes and gambling to create a dependable funding source for the Grow Iowa Values Fund, which under current law relies on growth in sales taxes for funding.

The initiative was one of five issues the Alliance addressed in announcing its 2004 legislative agenda Nov. 12 at the Capitol. The Alliance represents 17 chambers of commerce in Iowa’s largest commercial areas. Gov. Tom Vilsack praised the agenda as a “comprehensive and holistic” approach to growing the state’s economy.

The Alliance, which last year supported passage of legislation establishing the Values Fund, said the Legislature now needs to find a more steady revenue source for the economic development fund. Intended as a seven-year fund, $503 million fund, it could run out of money within the next year unless sales tax revenues increase by more than 2 percent.

“Our top priority is to grow the state of Iowa,” said David Maahs, executive director of the Iowa Chamber Alliance. “The Grow Iowa Values Fund is a key critical item for our state,” he said, adding that each of its initiatives is important for Iowa.

As part of a move to improve the state’s business climate and make it more competitive with surrounding states, the Alliance also proposed a simplified, two-tiered flat state income tax consisting of a base rate and a second tier for higher-income taxpayers. The proposed system would need to be revenue neutral, the Alliance said.

Other intiatives include support for shifting road use tax revenues from rural roads to fund primary highways in the state. The Alliance cited 30 major road projects on hold in the state for lack of funding.

It also called for the Legislature to simplify the process for consolidating local governments. The current law, enacted 25 years ago, has not resulted in any consolidations. The Alliance also supports creation of a unified marketing plan for the state, which is now being undertaken by a committee of the Values Fund.

For the first time this year, the Alliance will also address an agenda of federal issues, among them funding for transportation, workforce training and homeland security.