Sound Public Policy Benefits Manufacturers

The State of Iowa is a manufacturing powerhouse. There are thousands of these businesses located across the state. According to the National Association of Manufacturers (the NAM), the industry accounts for 17.14% of total output in the state, employing over 14% of the workforce. In December 2021, there was an average of 225,000 manufacturing employees, with average annual wage just shy of $80,000 in that same year.

Manufacturers are the bread and butter of many communities across the state; often being the largest employer in cities. When manufacturing does well, Iowa does well.
This isn’t to say that manufacturing doesn’t face headwinds or challenges just like any other industry; whether that’s finding folks to fill jobs, supply chain issues, the cost of inputs, regulatory matters, etc.

Manufacturers and other types of industries in Iowa have an advantage over many of our neighboring states when it comes to being competitive because of the public policy being produced by Governor Reynolds and the Legislature.

Since 2017, over 60 bills that ABI has advocated for have become law. This includes workers’ compensation reform, where we have seen insurance premiums decline significantly since the enactment of that bill.

Iowa policymakers approved one of the strongest COVID-19 limited liability shields in the country in 2020. This commonsense legislation ensured businesses wouldn’t be facing frivolous lawsuits during an unprecedented and tumultuous time.

Unemployment insurance reform, which passed in 2022, was beneficial in a number of ways. It helped move businesses to the lowest tax table under state law, saving them millions of dollars. It modernized the entire system by turning the focus from unemployment to re-employment. It encouraged individuals to return to the workforce
sooner and enhanced the integrity and stability of our unemployment insurance trust fund.

Governor Reynolds signed two bills in 2023 that put hard caps on noneconomic damages for cases related to medical malpractice and incidents in the commercial motor
vehicle industry. These changes provide more certainty to businesses and will help attract more workers in these fields.

Perhaps no other state in the nation has become more competitive in the tax space than Iowa over the last seven years. Iowa has gone from an onerous and uncompetitive 8.98% individual rate in Tax Year 2017 to a flat 3.8% individual rate for Tax Year 2025. Iowa’s corporate income tax rate has moved from a 12% rate to 7.1% for Tax Year 2024. That rate will be a flat 5.5% in a few years.

These are just some of the key public policies enacted over the last few years that have made Iowa a more attractive place to do business. This benefits not only manufacturers and industry at large, but individual Iowans and their families as well.

The bottom line is the state of manufacturing in Iowa is strong! ABI