June 8, 2012
Business Assistance & Job Creation Efforts
Business Assistance & Job Creation Efforts
The State of Iowa supports business growth through direct financial assistance and tax incentives.
During the 2012 Legislative Session, the legislature expanded the High Quality Jobs Program to offer $15 million in direct financial assistance in addition to various tax incentives. The program is designed to help Iowa businesses expand, prevent current businesses from leaving Iowa, and encourage new businesses to locate in Iowa.
Since its inception, the High Quality Jobs Program has already generated $7.4 billion in capital investment, helped create 13,820 high paying jobs, and produced $2 in tax revenues for every $1 in tax incentives. The inclusion of a direct financial assistance component, which launches in the fall, strengthens Iowa’s job creation efforts.
In addition to the High Quality Jobs Programs, EDA offers support through their targeted small business program, the demonstration fund and their enterprise zone program. The Demonstration Fund provides financial and technical assistance to high technology prototype and concept businesses. The primary purpose of the fund is to help businesses with a high-growth potential reach a position where they are able to attract later stage private sector funding.
Local communities also use Iowa’s Enterprise Zone initiatives designed to stimulate development by targeting economically distressed areas in Iowa. Through state and local tax incentives, businesses and developers are encouraged to make new investments, and create or retain jobs in these areas. The goal of the program is to revitalize these areas and make them competitive with other locations throughout the state.
For more information regarding businesses assistance in Iowa, log on to http://www.iowaeconomicdevelopment.com.
Helping Small Businesses, Entrepreneurs Create Jobs
Small business owners and entrepreneurs have a wide range of resources available to them through the State of Iowa.
First, the Iowa Economic Development Authority (EDA) offers a business license information center that allows small businesses and entrepreneurs to find and compile all necessary licenses in one place as they prepare to launch a venture. EDA also offers guides on small business startup requirements, provides technical assistance to small businesses and entrepreneurs, and assistance in regulatory and compliance matters.
Additionally, EDA can help offer and find financial capital and grants to qualifying small businesses and entrepreneurs through the high quality jobs program, the demonstration fund or by putting a business in contact with one of the state’s innovation networks. For more information on EDA assistance program, visit http://www.iowaeconomicdevelopment.com.
Iowa’s Small Business Development Centers (SBDC) are another great resource for small business owners and entrepreneurs. SBDCs (http://www.iowasbdc.org) conduct research and train businesses and entrepreneurs in management, financing, and operating a small business. With 15 regional assistance centers across Iowa, they also provide comprehensive information services and access to experts in a variety of fields.
Iowa’s three state universities also play an important role in small business development. The University of Northern Iowa’s MyEntre.net (www.myentre.net) program is an entrepreneurship development system consisting of an online social network and free web-based entrepreneurial resources.
The universities also play an important role in commercializing research and innovation while working with entrepreneurs to better develop and market their ideas. The research parks at Iowa State University (www.isupark.org) and the University of Iowa (http://researchpark.uiowa.edu) provide space for entrepreneurs and start-ups to work in close proximity to world class research and technology.
Minority and female small business owners in Iowa are eligible for up to $50,000 in loans under the states targeted small business program (http://www.iowaeconomicdevelopment.com/business/tsb.aspx). Businesses must be located in Iowa, must have less than $4 million in annual sales and must be 51% owned by a woman or minority group member.
Tax Changes to Spur Job Growth, Renewable Energy
A number of tax credits designed to help spur job growth and boost Iowa’s renewable energy industry were approved by the Legislature this year.
A solar energy system tax credit was created that allows certain businesses to claim a state tax credit, very similar to the federal tax credit, for installing solar energy systems. Sales tax exemptions were created to help certain small businesses to not be double taxed on inputs used in their businesses. Designed to increase the use of ethanol, the ethanol tax credit was also extended for another year.
In an effort to improve openness and transparency, the Legislature approved additional reporting and auditing requirements for Tax Increment Financing (TIF) to assure that the tool is used for the intended purposes. TIF allows local communities to use tax revenue growth in special districts to spur additional growth in the area. While the tool has proved vital for many communities across Iowa to encourage the growth of new and existing businesses, controls were also put into place to assure that TIF is used to create new business instead of pirating business from nearby communities.
Commercial property taxes were again a major issue this year. While no final compromise was reached with $350 million on the table before session adjourned, significant progress was made during negotiations. Commercial property taxes continue to be a major issue for Iowa’s small businesses and the Legislature will work on the issue again in January when the 2013 session starts.
Resources for Small Businesses
A new online business resource center will be a one stop shop for support and information for small businesses and entrepreneurs statewide.
The Iowa Economic Development Authority (IEDA) is partnering with U.S. Sourcelink to provide small business and entrepreneurs with resources that are available to small business owners but are often difficult to locate.
IEDA signed a three year contract with U.S. Sourcelink to establish the statewide resource site. U.S. Sourcelink is America's largest resource network for entrepreneurs. Its mission is to match aspiring and existing entrepreneurs to the resources they need to grow. IEDA will populate information on service providers from around the state. Small business resources will have access to assistance information online or be directed to a community partner and program that will help entrepreneurs start, sustain, and grow their businesses.
IEDA expects to launch the program statewide this fall.
State Revenues Jump Head of Estimates
As fiscal year 2012 winds down, Iowa’s economy continues to pick up steam with state revenues pushing ahead of estimates. Through the end of May, state general fund revenue growth increased $218.4 million or 6.1% over the same period as last year. The growth in revenues is running $79 million ahead of the estimated revenue growth by the Revenue Estimation Conference (REC).
Through the end of May, corporate income tax revenues are up 31.9%, sales and use tax revenues are up 5%, and personal income taxes are up 4.6%. These three revenue sources represent just over 90% of the state’s total general fund revenues. Fiscal year 2012 ends on June 30th.
The state balance sheet is anticipating that the fiscal year 2012 budget will spend $6.01 billion and have an ending balance of $427.4 million. If revenues continue to run ahead of the estimate, the ending balance could also be $79 million higher than was originally anticipated. When this ending balance is paired with the $595.5 million that is currently in the state reserve funds, the state will have over $1 billion in surplus revenues.
Child Only Health Insurance Policies – Enrollment July 1
Parents who would like to enroll their children, regardless of their health, in a child only health insurance policy will have that opportunity beginning July 1st . The provision of the Federal Affordable Care Act that guaranteed the ability for all children to get health insurance coverage, no matter their health, became effective September 2010. This is an excellent alternative for families who cannot afford a full family insurance policy, and since the children must be accepted no matter their health, it offers the families peace of mind.
Under Iowa law, all insurance companies are required to have an enrollment period from July 1st through August 14th. Insurance companies can have more than one enrollment period if they choose to, and enrollment information must be clearly posted on their website. If you have questions regarding enrollment of a child only health policy, please call the Iowa Insurance Division at 877-955-1212, Monday through Friday between 8am and 4:30pm.
Governor Signs Bill to Take Additional Dangerous Substances Off the Shelves
Recognizing the dangers of synthetic substances sometimes sold as incense or bath salts, the Governor signed Senate File 2343, which adds more chemical compounds to the list of controlled substances that have dangerous side effects. Health care providers, law enforcement, and parents have expressed concerns about these synthetic substances. Senate File 2343 went into effect on May 25th, and retail establishments should no longer have them on their shelves.
Manufacturers of these substances continue to make slight changes to the chemical compounds, and right now the only option is for lawmakers to classify them as controlled substances without any medicinal purpose, a schedule 1 controlled substance. If a person is convicted of possessing a synthetic drug, they would be guilty of a serious misdemeanor and subject to a penalty of up of one year in jail and a fine between $315 and $1875. If a person is convicted of manufacturing, selling or possessing synthetic drugs with intent to deliver they would be guilty of an aggravated misdemeanor and subject to a penalty of up to two years in prison and a fine between $625 and $6,250.