QCChamber-IALegislativePriorities

201 Quad Cities Chamber Legislative Priorities | 1

2 12Iowa Legislative Priorities

2 | 2012 Quad Cities Chamber Legislative Priorities

PRIORITY A:

$496.5 MILLION$66.9 MILLIONEST. FY 2011 GENERAL FUND BUDGET SURPLUS

PROJECTED FY 2012 GENERAL FUND BUDGET SURPLUS

201 Quad Cities Chamber Legislative Priorities | 3

The Quad Cities Chamber of Commerce speaks on behalf of the business community regarding laws and regulations impacting commerce. The Chamber serves as a conduit for business and industry to access city councils and state legislators in an effort to advance the specific needs or information related to their businesses.

The Quad-Cities region, pop. 375,000, encompasses 56 municipalities and four counties, including Rock Island, Henry and Mercer Counties in Illinois and Scott County in Iowa. The region’s largest cities, connected by the Mississippi River, are Davenport (IA), Rock Island (IL), Moline (IL), Bettendorf (IA), and East Moline (IL).

ABOUT USWHO WE ARE & WHO WE REPRESENT

Want to know more about the Quad Cities Chamber’s stance on legislative issues and who we rerpresent? 563.322.1706 QuadCitiesChamber.com

PRIORITY A: MAINTAIN IOWA’S BALANCED BUDGET The Quad Cities Chamber of Commerce advocates for Iowa to maintain its balanced budget through responsible use of revenues and expenditures that allow it to remain an attractive state for residents and businesses to locate.

PRIORITY B: SUPPORT ECONOMIC GROWTHBuilding a stronger Iowa involves both fiscal restraint and prudent investments in our infrastructure and other areas aimed at promoting economic growth. We applaud the Iowa Legislature for their bi-partisan work on creating the new Iowa Economic Development Authority (IEDA) and the Iowa Partnership for Economic Progress (IPEP), both of which provide the flexibility, nimbleness and expertise needed for economic growth for the entire state.

PRIORITY C: SUPPORT A PROSPEROUS BUSINESS CLIMATEA healthy business climate allows the state to retain and grow existing businesses and attract new ones; thus, the state realizes real returns on their investments. Businesses look to several factors when deciding where to invest, including but not limited to: an equitable tax structure, great schools, quality infrastructure, an abundant workforce and inclusive communities respecting all people. These factors bolster Iowa’s competiveness and gain the edge when compared to neighboring states.

PAGE 3

PAGE 4

PAGE 6

2 12Iowa Legislative Priorities

2 12Iowa Legislative Priorities

1| Public Employee Pension Reform State lawmakers are responsible for ensuring that pension obligations don’t pose heavy burdens on taxpayers, stifling economic growth. In 2010, the State of Iowa addressed significant investment losses and liabilities caused by the failure to fully fund employer annual required contributions since 2002. The state passed several minor reforms that increased the vesting period, penalty for early retirement, years included to calculate final average salary, and both the employers’ and employees’ contribution rates. The Chamber recommends employers fully pay their annual required contributions to ensure a fiscally sustainable pension system. The Chamber supports continued monitoring of the pension fund by the administration of the Iowa Public Employees’ Retirement System (IPERS) and the Benefits Advisory Committee (BAC) to examine continued ways of refinement and cost-savings while continuing to attract quality workers in the State of Iowa. The Chamber also supports continued examination of both the Public Safety Peace

Officer’s Retirement System and Statewide Fire and Police Retirement Systems to make sure they are sustainable and not an undue burden on overall budgets.To this end, the Quad Cities Chamber of Commerce supports i. Continued reforms of

the public employee pension systems to reduce the burden placed on taxpayers, which could be accomplished by examining where further refinements can be obtained

ii. Halting any further pension enhancements

The Quad Cities Chamber of Commerce advocates for Iowa to maintain its balanced budget through responsible use of revenues and expenditures that allow it to remain an attractive state for residents and businesses to locate.Responsible fiscal policymakers in government employ the standards and criteria necessary to produce affordable, accountable and sustainable budgets that Iowa taxpayers can rely on year after year.

Developing a sound budget development process accomplishes several things:

• Avoids use of non-recurring funding sources for on-going expenses

• Avoids implementing new unbudgeted programs in the middle of the fiscal year

• Accurately determines revenues and expenses

• Avoids shifting program funds to property taxes and fees

• Avoids diversion of funds statutorily authorized for a specific objective to other purposes

The Quad Cities Chamber supports the Iowa legislature’s efforts to maintain a healthy budget that allows our citizens and businesses the best of opportunity. Fiscal certainty allows our companies to take advantage of a healthy business climate, and in turn, grow their investments in the state.

1| Support the Rock Island Arsenal The Rock Island Arsenal, located in the heart of the Quad Cities, is the area’s largest employer with nearly 9,000 employees. The Arsenal installation is home to dozens of military services, including First Army, Army Sustainment Command, Joint Munitions Command, Joint Manufacturing and Technology Center, US Army Corp of Engineers-Rock Island District, and Navy Operational Support Center.

The Quad Cities Chamber believes the Rock Island Arsenal is one of the most critical assets in our region and state, and therefore seeks support from the State of Iowa in protecting and growing its capabilities to continue spurring jobs and economic growth. A 2011 Chamber member survey reported that over 92% of our members believe the Rock Island Arsenal is a key component to increasing the Quad Cities economy.

To this end, the Quad Cities Chamber of Commerce urges the Iowa legislature to:

i. Highlight defense as a key industry in the State of Iowa

ii. Work with the community, local, state and federal officials to protect and grow the Arsenal’s mission and connection to private industry

iii. Position Iowa to attract and retain defense contractors.

2| Invest in Transportation & Infrastructure Iowa has great needs for updating and repairing its transportation infrastructure. Quality roads, bridges, airports, rail and mass transit networks are America’s economic foundation—the platform on which our society runs and central to economic growth. A 2011 CNBC ranking of America’s Top States for Business that looked at the vitality of each state’s transportation system by the value of goods shipped by air, land and water, as well as the availability of air travel in each state and the quality of the roads, ranked Iowa 37th—lower than Iowa’s 2010 ranking of 32.

8% of Iowa’s roads carry 61% of the traffic, and with the rate of revenue to the Road Use Tax Fund decreasing, continuous investment in Iowa’s public roadway system becomes essential to support economic growth. The Chamber supports full funding of TIME-21 (Transportation Investment

Moves the Economy in the 21st century) and its distribution of revenues formula: 60% to state/primary road fund, 20% to counties/secondary road fund and 20% to cities/street construction fund.

The Quad Cities Chamber of Commerce supports investment in infrastructure projects that spur economic development and move the state forward in attracting new businesses and residents. In conjunction with the Quad Cities Passenger Rail Coalition, the Chamber advocates for passenger rail funding because it will create jobs, improve our nation’s transportation infrastructure and assist in providing transportation alternatives to the citizens of Iowa and the Midwest. The passenger rail line connecting Chicago to the Quad Cities will be completed in 2014. We support the line continuing into Iowa as well as the Chicago to Omaha Regional Passenger Rail System Planning Study.

3| Expand and Maintain Economic Development Incentives The creation of the Iowa Partnership for Economic Progress (IPEP) was a very good start to bolstering Iowa’s future economic growth potential. Now, this entity requires a new set of economic development incentives and tools to help fulfill its mission.

Existing and new incentives must address:

• Tax credits encouraging development and rehabilitation of properties, community development, innovation, research and development, retention of jobs and expansion of operations.

• Direct incentives that are competitive with other states and sovereign nations in order to attract investment in Iowa

• Innovative programs to help locally owned businesses expand and stay in Iowa

The Quad Cities Chamber of Commerce supports the creation of an incentive for defense contractors to encourage investment and job creation efforts in a location nearby the Rock Island Arsenal. The defense industry is a targeted business development opportunity in the Quad Cities and eastern Iowa. The Rock Island Arsenal installation is the primary driver of this opportunity. The QC Chamber will work to assist existing local and state companies connect with defense contracting opportunities and to attract new

defense contractors to locate in the Quad Cities region as they bid on or implement new multi-billion dollar contracts.

We also support the creation of a more flexible incentive packaging fund to replace the Grow Iowa Values Fund.of making the crucial difference in bringing relocation projects to Illinois. Incentives allowed under the Enterprise Zone Program have enabled both existing companies and new ventures alike to make decisions regarding job creation, job retention and capital investment—resulting in a stronger Illinois economy.

• Create an incentive for defense contractors to encourage investment and job creation efforts in a location near the Rock Island Arsenal. The defense industry is a targeted business development opportunity in the Quad Cities and northwestern Illinois. The Rock Island Arsenal installation is the primary driver of this opportunity. The Chamber will work to help connect existing local and state companies with defense contracting opportunities, and to attract new defense contractors to locate in the Quad Cities region as they bid on or implement new multi-billion dollar contracts.

4| Promote Balanced Growth in Border Communities The Quad Cities Chamber focuses on encouraging balanced growth in the Quad Cities region. Due to the region’s 400,000 population split between two states, additional options exist where residents and businesses choose to locate. It is ever more important for the State of Iowa to analyze how its regulations and laws impact these decisions, and then enact policies promoting the entire Quad Cities region to families and businesses.

To this end, the Quad Cities Chamber supports the creation of a Border Community Task Force to recommend policies to help border communities like the Quad Cities stay competitive and obtain balanced economic growth.

Building a stronger Iowa involves both fiscal restraint and prudent investments in our infrastructure and other areas aimed at promoting economic growth. We applaud the Iowa Legislature for their bi-partisan work on creating the new Iowa Economic Development Authority (IEDA) and the Iowa Partnership for Economic Progress (IPEP), both of which provide the flexibility, nimbleness and expertise needed for economic growth for the entire state. The Quad Cities Chamber of Commerce supports the following measures aimed at increasing the growth in the Quad Cities region, eastern Iowa and the state as a whole.

PRIORITY B:

4 | 2012 Quad Cities Chamber Legislative Priorities 201 Quad Cities Chamber Legislative Priorities | 5

2 12Iowa Legislative Priorities

The Illinois Department of Transportation (IDOT) awarded $177 million towards

passenger rail service between Chicago and the Quad Cities in 2011.

8500ROCK ISLAND

ARSENAL EMPLOYEES{THE AREA’S LARGEST EMPLOYER}

1| Commercial & Industrial Property Taxes The Quad Cities Chamber of Commerce advocates for changes in Iowa law that will lead to business growth. In order to compete with other states, regions and countries, Iowa must improve its business tax climate. The number one thing that can help achieve this is property tax relief for commercial and industrial property taxpayers. We favor continued efforts to reduce overall tax burden in Iowa. Iowa’s current property tax system shifts the burden to commercial and industrial owners, which places the state at a competitive disadvantage, currently ranking Iowa in the top 2 states for the highest business property taxpayers. We support efforts to move the four locally assessed classes of property tax payers closer to equitable treatment. Consideration must be given regarding how relief proposals impact our local governments, as it is not in the best interest of economic growth for Iowa to simply push property tax relief onto the budgets of local governments. The system should not be complex—it should be based on actual value and usage of the property. There is a need for stability and consistency in government taxation; therefore, we support equity, transparency, predictability and government accountability in the tax system.

“Taxes matter to business. Business taxes affect business decisions, job creation and retention, plant location, competiveness, the transparency of the tax system, and the long-term health of a state’s economy.” –Tax Foundation

2| Support Education & Workforce Development The Quad Cities Chamber of Commerce believes that enhancing preschool through 12th grade education through bold, innovative initiatives will again position the state as the leader in education, consequently fostering a highly skilled and educated workforce. Initiatives that are solid solutions include: further implementation of early childhood pre-school; establishment of 21st century learning standards; alignment of Iowa curriculum with career pathways; increased utilization of flexible and innovative school reform models; and stronger workforce training, retention and recruitment to meet future workforce needs.

Comprehensive education reform will ready a globally prepared workforce to compete with the challenges of the 21st century in advanced manufacturing, life-sciences, agriculture, professional services, and other high-paying, job-creating, quality sectors. Top performing schools are at the top of the list in attracting business to the state, and Iowa offers that kind of education. We believe that focus on the curriculum areas of Science, Technology, Engineering, and Mathematics (STEM) will better position our future workforce with the skills needed for jobs over the next many decades.

Workforce preparedness is a key to Iowa’s success. With the job market increasingly requiring higher education, diversity of opportunity is important as we encourage lifelong learning. Our institutions of higher education are meeting that challenge, and the Quad Cities Chamber supports equity in treatment as it pertains to the Iowa Tuition Grants.

3| Champion a Comprehensive Support Network The Quad Cities Chamber of Commerce supports efforts to increase the economic development and standard of living in the Quad Cities region and the state of Iowa. Iowa prides itself in the fact that our communities offer a comprehensive support network consisting of programs that increase human capital, social inclusion and the health and mental health of our citizenry. We advocate that our non-profits and social service agencies meet the challenges of austere budgets and reduced government revenues with a collaborative spirit and innovative thinking. We also advocate to our state leaders that sufficient revenue must be allocated to human services, which provide core services to residents and maintain Iowa and the Quad Cities as a quality place to live and do business.

For example, the Quad Cities Chamber of Commerce supports the legislature’s efforts to maximize the efficiency of the mental health construct within the state. We support the work on the “Mental Health Redesign” in an effort to develop an efficient system of mental health service delivery to Iowans across the state. The legislature needs to establish a stable funding stream to allow this new model to operate as designed. Preventative and restorative mental health services are critical to the quality of life in our communities and enhance our communities’ “livability,” which attracts and retains both corporate and private citizens. The economy of Iowa works better when there is a strong, stable support network for our citizens, and we support efforts to bolster those services.

A healthy business climate allows the state to retain and grow existing businesses and attract new ones; thus, the state realizes real returns on their investments. Businesses look to several factors when deciding where to invest, including but not limited to: an equitable tax structure, great schools, quality infrastructure, an abundant workforce and inclusive communities respecting all people. These factors bolster Iowa’s competiveness and gain the edge when compared to neighboring states.

The 2011 CNBC ranking of Top States for Business ranked Iowa #1 in cost of doing business and #11 in being business friendly, but there are areas for improvement.

PRIORITY C:

6 | 2012 Quad Cities Chamber Legislative Priorities 201 Quad Cities Chamber Legislative Priorities | 7

IOWA’S CURRENT CHALLENGES

Creating 200,000 new jobs has never been more important given our current challenges…

GOVERNOR BRANSTAD’S JOBS PLAN, BY THE NUMBERS

IOWA PARTNERSHIP FOR ECONOMIC PROGRESS

REDUCE COMMERCIAL PROPERTY TAXES BY 40%

• 106,500Iowansarecurrentlyunemployed(6.3%)(Iowa Workforce Development, December 2010)

• Iowa’spopulationgrowthinthelastdecadewasthe10thslowestinthenation(at4.1%)(US Census Bureau, 2010)

• OfthosestatesborderingIowa,onlyIllinoishadpopulationgrowthatarateslowerthanIowa(at3.3%)(US Census Bureau, 2010)

• IowaisnowdowntofourseatsintheUSCongressandisoneofonly10statesthatwilllosecongressionalseatsasaresultofthe2010census(New York Times, Census 2010: Gains and Losses in Congress)

• Iowa’sStateBusinessTaxClimateisratedasthe45thworstintheUnitedStates(Tax Foundation, 2011 State Business Tax Climate Index, October 2010)

• Iowaisranked40thbytheSmallBusinessSurvivalIndexasoneoftheleastfriendlypolicyenvironmentsforentrepreneurship(Small Business & Entrepreneurship Council, Small Business Survival Index 2010, December 2010)

• Iowaisranked2ndhighestinthenationforurbancommercialpropertytaxesand2ndhighestinthenationforruralcommercialpropertytaxes.(National Taxpayers Conference, 50-State Property Tax Study)

• At12%,Iowa’stopcorporateincometaxrateisthehighestinthenation.(Tax Foundation, Tax Data, March 2010)

To create 200,000 new jobs something has to change…

GovernorBranstadhasofferedlegislationtoreplacethecurrentIowaDepartmentofEconomicDevelopmentwithapublic-privatepartnershipcalledtheIowaPartnershipforEconomicProgress(IPEP).IPEPwillenabletheStateofIowatosupportallaspectsofasuccessfuleconomicdevelopmentportfolio:businessattraction,retention,innovation,andexpansion.

• ReplacethecurrentalphabetsoupofincentiveprogramswithamorefocusedsetofincentivesthatprovideIPEPwithmaximumflexibilitytomeettheneedsofpotentialemployers.

• DevelopacustomerserviceattitudeamongstoureconomicdevelopmentprofessionalstoencourageaggressiveandproactiveproblemsolvingsothatIowacanmakethe“sale”tokeepandcreatejobs.

• Usethebestpracticesofthepublicandprivatesectorthatresultsinamoredynamic,results-orientedandaccountableeconomicdevelopmentorganization.

• ApublicauthoritywillbecreatedtoinitiallyassumemanyoftheactivitiescurrentlyperformedbytheIowaDepartmentofEconomicDevelopment.

• Aprivate501c3non-profitorganizationwillbecreatedtoinitiallyhousetheIowaInnovationCouncil(ICC),abusinessleader-ledgroupthatisdevelopingstrategiesandlong-termplanstoallowIowatobettercompeteintheglobalbusinesseconomy.

• Eventually,theprivateentitywillhouseon-goingmarketingandtourismactivitiessuchthatthesecriticaldevelopmentactivitieswillhavealongtermstableandpredictablefundingstreamtooperateintimesbothgoodandbad.

GovernorBranstadhasofferedlegislationtoreduceIowa’s2ndhighestinthenationcommercialpropertytaxesby40%overthenextfiveyears.

95,000UNEMPLOYED IOWA RESIDENTS{5.7% OF POPULATION}

“ Taxes matter to business. Business

taxes affect business decisions, job creation

and retention, plant location, competiveness,

the transparency of the tax system, and the long-term health of a

state’s economy.” –Tax Foundation

2 12Iowa Legislative Priorities