Job creation and strengthening Iowa’s economy have not received the much-needed attention they deserve this legislative session. As the nation’s economy continues to trudge slowly along shaky ground, Iowans are weary about the future and the impact another economic downturn could have on their lives. It is important for our state these conversations are being held in the Iowa Legislature. It is our duty to pass responsible legislation that helps job creators expand and grow their workforces and businesses.
This week, Senate Republicans were pleased to see the consumables bill, House File 2443, pass the Iowa House with broad bipartisan support. The bill would end the double tax on manufacturers, by clarifying the definition of replacement parts, including supplies consumed during the manufacturing process as exempt from sales and use tax. If enacted, this legislation will lead to business growth and job creation. Senate Republicans have encouraged the majority party in the Senate to bring this bill to the floor for a vote, but so far our request has not been heard. A broad, bipartisan majority of legislators in the House and Senate believe this is good tax policy because it leaves the tax in place on the final product, but not the inputs.
Iowa’s manufactured products should not be double-taxed. Addressing the consumables tax language would allow manufacturers to make investments in new equipment. More important, ceasing the “double tax” creates an environment in which companies can continue to pay good wages and employ more skilled workers. I will continue to pursue this significant piece of legislation because it is vital to growing our economy and creating a legacy of opportunity for Iowa’s future.
Appropriation bills are beginning to come into the Senate Appropriations Committee of which I am a member. This is a sign that this session is starting to come to an end. This budget is targeted at $6.971 billion, a $479 million increase over last year’s budget. Much of this increase is tied to last year’s property tax reform, education reform, and expansion of Medicaid coupled with an increase of $86 million in the state’s share of Medicaid. This amounts to a 7.4% increase over last year’s budget which is not sustainable. Promises made, promises kept, for now.