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Condition of the State: What could impact the communities we cover

Iowa Governor Kim Reynolds

In her first, “Condition of the State” address Iowa Governor Kim Reynolds said the focus on tax reform will start with individuals in 2018 and then a bipartisan task force will be formed to analyze state tax credits and make recommendations before the start of the next legislative session.

“It may take a multi-year effort, but we are going to completely reform our tax code,” Reynolds said. “We’re going to make Iowa more competitive, and we’re going to continue to be a place where businesses—big and small—want to grow and expand.”

This was the first time in Iowa’s history that the “Condition of the State” address was given by a women Governor; She spoke for nearly an hour Tuesday morning.

According to Reynolds, tax reform should also include the end of the federal deductibility and a focus on rate reductions. The provision known as federal deductibility allows Iowans to deduct what they pay in federal income taxes from their state liability, but when federal taxes go down, Iowans are able to make fewer deductions and end up paying more in state taxes.

“Because of an outdated provision in Iowa’s tax code, Iowans will see a tax increase if we don’t pass tax reform at the state level,” Reynolds said. “Therefore, I will be proposing a tax reform package that significantly reduces rates, modernizes our tax code, eliminates federal deductibility and provides real tax relief for middle-class families, farmers, and small businesses.”

The full budget proposal can be found here.

Apprenticeship and rural broadband funding

In addition to tax reform,  Reynolds planned to increase support for apprenticeships as part of her Future Ready Iowa initiative by including an additional $1 million in her budget for a Registered Apprenticeship Program.

According to the FY 2019 Budget Report, the Registered Apprenticeship Program “will encourage small to mid-size businesses to start or grow Registered Apprenticeships, which allow Iowans to earn while they learn.”

This funding will be in addition to the $3 million Reynolds budgeted for the existing Apprenticeship Training Program.

Reynolds also announced an initiative—that Lt. Governor Adam Gregg will lead—to focus on expanding access to broadband in rural Iowa and will draw funding from the Rebuild Iowa Infrastructure Fund.

“This new initiative will promote investment and connect rural Iowa by expanding broadband capabilities in every corner of our state,” Reynolds said.

She recommended the initiative receive $2.6 million in FY 2019.

Reynolds also said she hopes to:

  • Sign a water quality bill before any other legislation
  • Individualize health care
  • Increase the use of the Prescription Monitoring Program to reduce opioid addiction
  • Invest in education/job training

State Appropriations for select Departments in FY 19 (proposed)

  • Office of Chief Information Officer – $5,900,000
  • Department of Cultural Affairs – $7,204,162
  • Economic Development Authority – $49,431,188
  • Iowa Telecommunications & Technology Commission – $0
  • Iowa Workforce Development – $19,176,628

Morgan Garner contributed to this story.

Condition of the State: What could impact the communities we cover | Clay & Milk
A central Iowa ag-tech accelerator has secured more backers and finally has a name. The Greater Des Moines Partnership first announced the accelerator last year, naming four initial investors. On Monday, the Partnership said the program will be called the "Iowa AgriTech Accelerator" and named three new investors. The new investors include Grinnell Mutual, Kent Corp. and Sukup Manufacturing, all Iowa companies. They join investors Deere & Co., Peoples Co., Farmers Mutual Hail Insurance Co. and DuPont Pioneer. Each investor has agreed to put up $100,000 for the first year of the accelerator. Startups entering the program will receive $40,000 in seed funding in exchange for 6 percent equity. Tej Dhawan, an angel investor and local startup mentor, is serving as interim director until the AgriTech Accelerator names a permanent leader. Dhawan held a similar role with the GIA before Brian Hemesath was named as managing director. As interim director, Dhawan said his main job includes hiring the accelerator's executive director, establishing a business structure and initial recruiting for the first cohort. The accelerator will place few filters, such as location and product, on the applicant pool, Dhawan said. "When you’re seeking innovation, innovation can come from every corner of the world so why restrict ourselves," he said. One area the the AgriTech Accelerator won't recruit from is biotech. For its first cohort, the AgriTech Accelerator will work out of the GIA's space in Des Moines' East Village, Dhawan said. A future, permanent home is still to be decided. The accelerator's program will host startups from mid-July through mid-October, ending with an event connected to the annual World Food Prize. The GIA, which the AgriTech Accelerator is based on, also ends with presentations at an industry event. The accelerator has also started lining up a mentor pool. The Iowa Corn Growers Association, Iowa Soybean Association and the Iowa Pork Producers Association have agreed to provide mentors, as has Iowa State University. While the AgriTech Accelerator is loosely based off of the GIA, it will differ in its business structure, Dhawan said. The GIA runs through a for-profit model for both operations and its investment fund. The AgriTech Accelerator will have a nonprofit model for its operations and a for-profit setup for its fund. Dhawan said the nonprofit model is being used so the accelerator can better work with other nonprofit partners, such as trade associations. "These are all organizations that are nonprofits and can be amazing stakeholders without ever having to be investors in the accelerator," he said. "It becomes easier to work with trade associations in their nonprofit role when we are also a nonprofit." When it's up and running, the AgriTech Accelerator would be one of a handful of ag-focused startup development programs in Iowa. Others include the Ag Startup Engine out of Iowa State University and the Rural Ventures Alliance from Iowa MicroLoan. Matthew Patane is the managing editor and co-founder of Clay & Milk. Send him an email at
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