Iowa debate puts steel incentives and school funding in focus

Rob Sand and Zach Lahn offered contrasting approaches to a proposed Lee County steel project, public schools and affordability in their first general-election debate for Iowa governor on Oct. 6. The debate at St. Ambrose University in Davenport came four days after Gov. Kim Reynolds signed a law expanding the state’s potential incentives for eligible projects.

Sand called for safeguards and incentives tied to company investment and performance benchmarks. Lahn described the steel project as an opportunity for southeast Iowa and said a governor should help attract businesses. Both candidates said taxpayer support should depend on the company keeping its promises.

The law allows potential incentives, not a final award

HF 2801 amended Iowa’s Major Economic Growth Attraction program, known as MEGA. Under the changes, a single eligible business in a rural county may qualify for incentives of up to 10% of qualifying investment, spread evenly over 10 years, with transferability, according to the Governor’s Office.

The proposed Lee County steel mill is planned as a $15 billion investment; that figure describes a proposal, not money already spent or confirmation the plant will be built. Iowa Public Radio reported that a preliminary incentive agreement was estimated at $1.36 billion, citing the Des Moines Register. That estimate is not an award fixed by HF 2801. The Iowa Economic Development Authority Board determines any final incentive package.

The law’s tax-credit conditions link issuance to project progress and payroll. Iowa Capital Dispatch reported that a tax-credit certificate cannot be issued until the project, or a designated portion, is placed in service and at least 50% of the associated created jobs agreed to for that project or portion are on payroll. Those jobs must pay at least 140% of the qualifying wage threshold.

A Legislative Services Agency analysis, as reported by Iowa Public Radio, projected an additional $575 million reduction in state revenue from fiscal 2029 through fiscal 2041 compared with the existing credit structure. The projection used an estimated qualifying investment of $11.15 billion. It is a forecast of potential revenue effects, not a measured cost or a finalized project award.

Education and affordability proposals remain campaign positions

Sand proposed a 5% first-year increase in state public-school funding, income limits and audits for education savings accounts, and restrictions on publicly funded private schools turning students away. Lahn defended the accounts, supported third-party audits and called for more flexibility for educators. These are proposals from the candidates, not changes made by the debate.

On utility costs, Sand proposed capping utility fees. Iowa Public Radio reported that Lahn proposed stronger competition enforcement and ending tax breaks for data centers. The candidates’ proposals describe different approaches to affordability; they do not establish that either has reduced utility bills.

The debate did not change HF 2801 or determine whether the steel project will proceed. The final MEGA package remains for the IEDA Board to determine. Iowa’s general election is scheduled for Nov. 3, 2026.