GOV. REYNOLDS PROPOSES NEW TAX PLAN - Iowa City ...

GOV. REYNOLDS PROPOSES NEW TAX PLAN
                                              Governor Kim Reynolds recently
                                              gave her annual Condition of the
                                              State Address on January 11th.
                                              During that speech, Reynolds
                                              mentioned individual income tax cuts
                                              for all Iowans. She suggested a
                                              gradual move to a flat rate of 4%
                                              over the next four years. Since this
                                              announcement she has also
                                              considered corporate tax cuts. The
                                              Iowa Legislature has also made it
clear that tax cuts will be a major priority for the 2022 legislative session.

Individual income tax cuts

Reynolds said in her Condition of the State Address that she wants to cut the
individual income taxes to a flat rate of 4% for all working Iowans over the next
four years. The first year of the 4% flat tax rate would be 2026. During this first
year of the 4% individual income tax the state is expected to see a $1.6 billion
reduction in revenue. Reynolds sees this as a win, however, because this lost
state revenue will stay in the pockets of Iowans and be invested in smaller,
local businesses. At the end of this plan in 2026, the average family should
expect to pay $1,300 less in income taxes per year. The Iowa Senate has
drafted their first version of this bill, Senate Study Bill 3044, and here is what
the range of individual income tax rates look like over the next four years
(dependent on income levels and marriage status):

     2023: 4.4% - 6%
     2024: 4.4% - 5.7%
     2025: 4.4% - 4.82%
     2026: 4% flat rate

To learn more about the new individual income tax plan click below.

                                  LEARN MORE

Corporate income tax cuts

Although never mentioned in her Condition of the State Address, Reynolds
proposed corporate income tax cuts on top of the individual income tax cuts
throughout Iowa. This plan will gradually reduce the top corporate tax rate
depending on how much revenue the state is receiving from corporate income
taxes. The bill says that:

      If the net corporate income tax receipts for the preceding year exceed
      $700 million, new corporate tax rates will be applied
      These new, lower corporate taxes will only be applied to the two highest
      current corporate tax rates after the next January 1st
      The corporate income tax rate cannot be adjusted lower than 5.5%

The tax cuts are expected to cost the state a total of about $300 million over
the next 5 years, estimated by the Department of Revenue.

                                   LEARN MORE

CHANGES TO IOWA UNEMPLOYMENT
REQUIREMENTS
Iowa's unemployment requirements
have recently changed, and the
government is now looking towards
the idea of "reemployment." Gov.
Reynolds and Republicans in the Iowa
Legislature have changed these requirements as an effort to reemploy Iowans
and get them back into the struggling workforce. Effective January 9, 2022, the
Reemployment Case Management (RCM) program was put into place.

What is the Reemployment Case Management program?

This program is set up to get unemployed Iowans back to work as quickly as
possibly. Iowa Workforce Development will assist unemployed workers with
enhanced efforts to help them find a job. This new program has decreased the
amount of activities that qualify as "reemployment activity" from 27 to 12,
cutting the list by more than half. It also changed the requirement of
participating in two of these activities per week to participating in four activities
per week.

What does this mean for Iowa's businesses? Here are some pros and
cons.

There are pros and cons for Iowa businesses under this new approach to
unemployment by Iowa Workforce Development and Gov. Reynolds. The
obvious benefit to this new program is that businesses, large and small, will be
gaining new employees to help their day to day activities. Iowa businesses
have struggled retaining their workforce and the RCM program will assist them
in finding workers. These new employees will also have a quicker process to

joining the workforce, given the new reemployment activity requirements the
unemployed workers must follow.

So, what are the cons? Well, the increase in reemployment activities from two
to four per week is worrying some employers. This means that they will be
dealing with twice as many applications, twice as many resumes to review, and
possibly more interviews that they simply do not have the time for. This is an
extra workload for many businesses that are already short staffed. Another
concern for employers is the amount of interviewees who are not actually
serious about the job - rather, those unemployed interviewees are only trying
to satisfy their weekly reemployment activity requirement.

To see full details and FAQs on the RCM program, click the button below.

                               SEE FULL DETAILS

JOHNSON COUNTY TALENT COALITION
As we head into the year our workforce remains a top priority.You are invited
to join a Johnson County focused Talent Coalition to take a deeper dive into
the challenges and opportunities that exist as the landscape continues to
evolve. The Business Partnership will be partnering with ICAD on this coalition
so we can address the issues that business leaders, like yourself, are facing.
This work will complement the regional ICR efforts but allow us to be more
intentional about the resources and needs of our local employers.

The goal of our time together will be to identify the key workforce issues you
are facing, map the existing resources available to you, and identify gaps and
new opportunities to explore collectively.

We will convene via zoom on February 1st from 1- 2:30pm.

                                REGISTER HERE

AMERICA COMPETES ACT OF 2022
                                             On Tuesday, January 25th, U.S.
                                             House Democratic leadership
                                             released the America COMPETES
                                             Act, a 2,900 page bill. This bill is
                                             aimed at boosting United States
                                             high tech research and
manufacturing with a heavy focus on the semiconductor industry. President
Biden claims that this new bill will make our supply chains stronger and
reinvigorate the innovation engine to help outcompete China and the rest of
the world.

Biden is currently encouraging bipartisan support for this Democratic-
introduced bill. Some Republicans in Congress are in agreement with the base

layers of this bill, but are still wanting some minor changes before completely
agreeing with it. Legislators believe the sooner this bill gets passed the better,
but at this point it is not expected to be passed until March. To see President
Biden's statement on this act, click below.

                                   CLICK HERE

FEBRUARY'S LEGISLATIVE FORUM
                                           The Business Partnership will host its
                                           second of three legislative forums
                                           with elective officials this February.

                                           Join us at the North Liberty Police
                                           Department on Friday, February 18 at
                                           2 p.m. to connect with your legislator.
                                           Topics such as infrastructure,
                                           economic development, and housing
                                           will be covered at this forum.

                                                      REGISTER HERE

GRAB A SEAT AT OUR ANNUAL BANQUET
                            Reserve your ticket today for our Annual Banquet
                            on February 10th!

                            Learn about our 2022 goals and plans, hear from
                            University of Iowa President, Barbara Wilson, and
                            learn more about the Better Together 2030 visionary
                            project.

Doors open at 5:00 p.m. Program and dinner begins at 6:00 p.m. This
event will be hosted at Hyatt Regency Coralville Hotel & Conference
Center.

                                 SAVE ME A SEAT

                           This event is sponsored by:

The Business Partnership advocates for economic growth policies on the local,
state and federal levels. We collaborate with the business community and other
stakeholders and partners to develop our yearly policy agendas, to create a
consistent voice for the region.

We are a non-partisan organization that does not endorse or donate to political
candidates. We support First Amendment rights for all people and encourage
elected officials, candidates and citizens to be civil in discussions and debates
on policy issues and political opinions. We are committed to leading by
example.

If you have particular projects or issues that you would like addressed, contact
Jennifer Banta, Vice President, Advocacy & Community Development.

IOWA CITY AREA BUSINESS PARTNERSHIP
IOWACITYAREA.COM                                                                   ​   ​   ​   ​   ​