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Workforce Development Overall Exempt from Reductions

While the majority of programs under the Governor’s budget would receive a 6.5% reduction, the Department of Workforce Development (WFD) would not due to their assistance to provide services to the unemployed.  Overall, the department would receive a $1,154,000 increase.  Those increases include funding the Governor’s taskforce recommendations on employee misclassification that would enforce unemployment, workers’ compensation, and tax laws on employers that are not claiming certain employees.  There would also be an increase to the statewide standard skills assessment.  This program started last year to evaluate Iowa’s workforce readiness and assistance to make job placement programs more efficient.

Under the Governor’s budget, Workforce Centers would receive a $65,000 cut in state funding.  It is not known at this time what federal funds Iowa would receive in the coming year to fund these offices which would effect the overall funding.  The Workers’ Compensation Division, which handles Iowa’s claims from injured workers, would also receive a $15,000 cut.

Department of Economic Development

Most of the $1.4 million cut to the Department of Economic Development would be absorbed by the administration, business development and the community development divisions.  In addition, there is an $81,000 cut to the World Food Prize.  Through the Rebuild Iowa Infrastructure Fund  (RIIF) budget, the Community Attraction and Tourism program would be funded at $10 million, a cut of $2 million compared to FY 09.  Also, the River Enhancement Community Attraction Program, created last year to enhance projects using Iowa’s rivers, and the Regional Sport Authorities program, are not funded for FY 10.

Department of Cultural Affairs

Overall, the Department of Cultural Affairs (DCA) would receive a $570,000 decrease.  The department requested an increase for their building to store records, but the Governor provides a $19,000 decrease for that line item.  For all other line items in the DCA budget, the Governor has recommended a cut, including Cultural Grants, the Historical Society, County Endowment Funding, Historic Sites, and the Arts Council.

Great Places

There is a total of $1.9 million in the Governor’s FY 10 budget for Great Places projects funded through RIIF.  This program has worked with communities to develop their assets such as the arts, culture, historic fabric, natural environment, housing options, amenities, entrepreneurial incentives, and diversity.  This is a cut of $100,000 compared to FY 09.  There is also a $27,000 general fund budget cut to DCA to administer the program.

The Governor’s RIIF budget does not fund the Battle Flags Preservation Project and Historical Preservation Grants for FY 10.

Power Fund

The Governor’s budget decreases the $25 million in funding to the Iowa Power Fund by almost $2 million.  This program was created in 2007 to help Iowa businesses expand into renewable energy, alternate fuels and clean technology.

Grow Iowa Values Fund

For the first time since the $50 million program was created in 2003, the Grow Iowa Values Fund would receive a cut under the Governor’s budget to $47. million.  The Grow Iowa Values Fund provides grants and incentives for business development and to improve Iowa’s quality of life.  It is currently funded out of the RIIF budget.

State Housing Trust Fund

The Governor provides a status quo budget of $3 million for the State Housing Trust Fund.  This is funded through RIIF.  The program provides assistance to local housing trust funds for housing development.

Business Tax Credits and Historic Preservation Tax Credits

The Governor’s budget places a cap on business tax credits that would actually be used and accounted for by the Department of Revenue at $200 million.  This action is estimated by the Department of Management to save $15 million.  The Governor would also not provide a double research and development tax credit that is currently allowed.  This would save $13 million in revenue.

The Governor does not propose any increase to the Historic Preservation and Cultural and Entertainment Districts tax credit program.  The IBM project in Dubuque, that would create 1,300 jobs, would need some type of assistance to refurbish the building that they have leased.  One of the options discussed was an increase of $10 million to this program.  The Historic Preservation and Cultural and Entertainment Districts tax credits are used for historic rehabilitation projects designs that meet national standards of the Secretary of Interior.  The tax credits are currently capped at $15 million and are scheduled to increase to $20 million in FY 10.

Staff Contact: David Epley
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