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Tax Credit Committee Starts With The Basics

John Pemble
IPR file
The Tax Credit Review Committee was created as part of a package of tax cuts passed in 2018.

A legislative committee assigned to review Iowa tax credits received an overview of current programs from the Department of Revenue Wednesday, but some Democrats on the panel said they were hoping for more.

It was the first meeting of the Tax Credit Review Committee, which was created as part of a package of tax cuts passed in 2018.

Iowa awarded more than $200 million in tax credits for fiscal year 2019 and the state’s obligations to tax credit programs are expected to increase over the next few years.

Committee member and Iowa House Speaker-Select Pat Grassley, R-New Hartford, said the committee was created to propose changes that could make the budget impact of the credits more predictable. He said some credits are decades old and should be reviewed more closely.

“We want to show that we’re trying to make sure we’re modernizing these tax credits, that we’re getting value in our tax credit,” Grassley said. “I think that’s something that we need to be looking at.” But Grassley cautioned that any changes to tax credits will be hard to pass because he expects strong opposition from interest groups.

Rep. Chris Hall, D-Sioux City, said the committee should move more aggressively to examine the effectiveness of economic development tax credits. Hall some of the most lucrative awards go to large, profitable companies through employment and training programs and that the credits leave less revenue to go toward education or health care.

“If we’re talking about actually finding some solutions and curbing the cost of some of these programs, the way that they’ve grown, we need to give serious attention to it and we can’t just say an introduction to the topic is good enough,” Hall said.

It’s not clear how the committee will move forward. The committee’s Republican co-chairs, Rep. Lee Hein of Monticello and Sen. Jake Chapman of Adel, would not commit to another meeting before the legislature reconvenes.

Grant Gerlock is a reporter covering Des Moines and central Iowa