SIOUX CITY | There are a host of tax credits available in a wide number of Iowa governmental programs that will come up for review in the Iowa Legislature in 2018, and Sioux City officials say it is crunch time to make a priority of one in particular.
Sioux City Council and city department leaders on Tuesday pushed for more money for some other tax credits, but gave top billing to the extension of a state tax incentive program that helps border cities like Sioux City attract and retain new or expanding businesses.
The Targeted Jobs Withholding Tax Credit Program allows qualifying employers to divert a portion of the state taxes they owe to infrastructure that supports job retention or expansion projects. The program will expire in June if not extended.
"We really do need an extension," City Councilman Dan Moore said.
The Targeted Jobs Withholding Tax Credit Program was cited by city officials as being instrumental in Seaboard Triumph Foods choosing Sioux City over other Midwest cities to build a pork processing plant that opened in September in the Bridgeport Business Park. Within three months by November, Seaboard hit its target of hiring 1,100 employees for the first shift at the plant.
Sioux City leaders emphasized the importance of the Targeted Jobs program during the 18th annual City Hall Legislative Day, where lawmakers hear the city's top legislative priorities. Those on hand included Republican state Sen. Rick Bertrand and Democratic Reps. Chris Hall and Tim Kacena, all of Sioux City.
In the City Hall day of late 2016, Bertrand had said there might be a possibility "to strike a year early" and get the Targeted Jobs extension in 2017. But Bertrand on Tuesday said "the ugly part" of 2017 legislative deliberations showed an extension had been placed into a bill, but fellow Republican Rep. Mark Chelgren, of Ottumwa, didn't like that, "throws a fit" and so it died.
Bertrand said he hoped the Targeted Jobs extension has a rosier picture in 2018, saying, "The hard part will be keeping Chelgren off it."
Hall said the last extension "was not easily done" when it occurred in 2013, when each political party controlled one chamber in the Legislature. Hall noted the Legislature is under total Republican control now.
"I don't think it is going to be an easy lift," Hall said.
The tax credit equals 3 percent of the gross wages of each employee filling the new jobs. The businesses claim the tax credits, but the same amount is diverted to local cities that use the money for urban renewal projects benefiting the business.
Then-Gov. Terry Branstad in May 2013 signed a five-year extension of the Targeted Jobs program, which otherwise would have expired in June that year after serving as a pilot program. The program was created in 2006 to help Sioux City and four other border cities -- Council Bluffs, Burlington, Fort Madison and Keokuk -- compete with neighboring states for economic development projects.
Sioux City officials have said there is an acute need for the program, in attempting to vie for businesses also considering South Dakota and Nebraska, who have varying tax incentives.
According to Iowa Economic Development Authority, the program since creation has played a key role in retaining 1,277 jobs and creating 2,670 jobs, and fueled more than $424 million in private investment in Sioux City. Those numbers have grown each year.
The city officials also said they would like to see strengthening of the Iowa Workforce Housing Tax Credit Program and for historic tax credits, which come for rehabbing older properties in both state and federal credits.