Once again the folks at Iowa Fiscal Partnership provide solid analysis on why Iowa is having trouble funding even its most basic services at a time when politicians of all stripes claim the economic outlook in this state is good. The answer lies in the priorities that Iowa’s legislators set. Like so many states these days, priorities are skewed to the immediate gratification of business owners at the expense of their customers, the citizens of Iowa.
Peter Fisher, Research Director at Iowa Policy Project, offers a concise analysis in this backgrounder at the Iowa Policy Project. Fisher’s conclusion is also very concise:
We have a problem of priorities. We keep underfunding services for average Iowa families — education, health, work supports, natural resources — in order to finance massive tax reductions to businesses that don’t need it. And we spend in excess of $350 million each year on business tax credits that continue on autopilot, with no sunset, despite the state’s own analyses that fail to find evidence of appreciable benefit to the state from some of the largest of these subsidies.[7]
It is time to admit that the tax cuts enacted in 2013 were excessive, and are causing long term damage to the state. At the very least, the $50 million increase in the business property tax credit portion of those tax cuts scheduled for next year should be delayed or eliminated.
But that is not enough. There should be a moratorium on any further tax cuts or tax credits. All business tax credits should be subject to effective caps and sunsets to force a serious evaluation.
Without such measures, we will continue down the road of tax-cutting our way to mediocrity and shortchanging our children’s future.
Handing out favors to businesses will not meet what should be Iowa’s real priorities. It is not working in other states either. The booming state economies – California and Minnesota – have budgets that put people first and have raised taxes.
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