116 3rd St SE
Cedar Rapids, Iowa 52401
CEDAR RAPIDS — Gov. Kim Reynolds seemed to have made a sale even before she earlier this month pitched her tax reduction plans among the leadership at employee-owned Van Meter equipment.
Reynolds is touring Iowa to sell her proposal for a 4 percent flat-rate state income tax and also to phase out state taxes on retirement income.
That fits neatly with the “come here, work here, retire here” philosophy of Van Meter, a wholesale electrical distributor that has been 100 percent employee-owned since 2005, Chief Financial Officer Nate Jensema on Thursday afternoon told Reynolds as she toured the Cedar Rapids facility.
He and others Reynolds met with at Van Meter, which has more than 800 employees at 26 locations, did raise a concern that the governor’s proposal for retirement income might not apply to the employee-owners at Van Meter.
In her annual Condition of the State speech, Reynolds proposed that the elimination of taxes on retirement income would extend to employees who received stock in their company. Jensema wondered whether that would include members of an employee stock ownership plan, which is a qualified retirement account.
That was her intent, Reynolds assured him, and later her spokesman clarified that an ESOP would qualify for tax relief under her plan.
“It’s not a major change,” Reynolds said. “I want to get it right so we're looking at the language to make sure it does what the intent was to do (because), really what we’re trying to do is not tax retirement income.”
Employees who are part of an ESOP “have invested in the company, it's been part of their employment, and we want to reward work, and not tax them once they retire,” Reynolds said.
Iowa is losing too many retirees to states that don’t tax their retirement income, Reynolds said.
“Even Nebraska — and it’s not for the weather,” she joked.
The governor, who earlier toured Little Knights Learning Center in Dysart, also discussed a variety of workforce issues, including her proposals for stacking state and federal funds to address a shortage of child care. Iowa created 4,000 child care slots over the past year through a variety of programs, Reynolds said, and she’s proposing to expand that by 5,000.
Van Meter President and Chief Executive Officer Lura McBride thanked her for the state’s apprenticeship program and training programs at Kirkwood Community College that have helped meet the company’s need for drivers and other positions. Van Meter’s customers — electrical contractors — also need the skilled employees trained here, she said.
“These are great careers. We just need to expose them to kids in school,” Reynolds said.
Friday, Reynolds is scheduled to meet with the Monticello Chamber of Commerce and then attend the North Scott Rotary meeting in Davenport.
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