Iowa Business Council Says Population, Taxes Among Obstacles for State's Business Climate

February 3, 2021

John Steppe, The Gazette

Iowa’s business climate is “competitive” but not “overperforming” in five categories, according to the Iowa Business Council’s annual Iowa Competitive Dashboard.

IBC pointed to an “overly complex tax system” as one of the immediate challenges facing the state’s business climate. Iowa is ranked 46th in corporate tax index and 40th in individual income tax index out of all 50 states, the organization said, using publicly available data.

“That remains a challenge as we try to attract and retain businesses in Iowa,” said Tim Yaggi, IBC’s chairman and Pella Corp.’s president and CEO, in an online news conference.

Longer term, the state’s declining population has IBC members concerned.

“It’s not a simple issue,” IBC Executive Director Joe Murphy said. “It’s incumbent upon all of us as Iowans and business leaders to do everything we can to provide a welcoming and inclusive front for our state. We need to lay out a welcome mat here in Iowa.”

Part of IBC’s efforts to provide that “welcome mat” include a push for federal immigration changes and a statewide marketing campaign.

Murphy said people leaving higher-cost cities during the pandemic gives Iowa an opportunity to lure people to the state.

Improving broadband access also remains a priority for IBC. Murphy said actions from Gov. Kim Reynolds and the state legislature during the 2021 legislative season so far have been a “fantastic start.”

 “We don’t want to be here three years from now having the same conversations with respect to low connectivity rates and inferior (broadband) infrastructure,” Murphy said.

He said IBC is looking forward to working with Republican and Democratic legislators, Reynolds and “literally anybody else in Iowa” to resolve these issues.

Iowa’s ranking in the “best run states” subcategory slipped from seventh to 21st. Yaggi said it was the result of Iowa’s relatively slow growth in gross domestic product and jobs.

Education and workforce was the highest-ranked category for Iowa at 19th, followed by economic growth at 20th, health and wellness at 25th, governance at 29th and demographics and diversity at 32nd.

Murphy said IBC will have “much more robust data” on the impact of coronavirus on Iowa’s business climate in next year’s report because of the timing of data collection.

“Final data (from 2020) is still rolling in,” Murphy said. “Obviously we’re only a month into 2021.”

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