To hear Gov. Terry Branstad tell it, Iowa is in a world of hurt. Austerity measures are in order to clean up a budget mess he inherited. The state is at a huge competitive disadvantage compared to others. Businesses are overtaxed and harassed by state regulators. Public schools are failing our children.
This harsh portrait includes some truths: Iowa's schools aren't what they once were. It includes some exaggerations: The state has fiscal challenges but is better positioned than most states. And there are some falsehoods: State regulations aren't overly burdensome, and the one-time spending Branstad complains about included federal stimulus money the state would have been crazy to leave on the table.
The new governor's priorities
The budget Branstad unveiled Thursday is essentially the blueprint for his vision of the future. So what would Iowa look like if that budget becomes reality?
It bodes well for vulnerable Iowans, as Branstad provided additional funding for human services and Medicaid. Ensuring children and the poor are safe and have access to health care is right. Branstad also recognizes the need for adequate funding for public safety and prisons.
Those are the right priorities, and Branstad deserves credit for having a clear vision of what he wants to accomplish. The problem is he would create some new problems with his budget proposals.
For example, the governor would pay for a corporate income tax break by raising taxes on Iowa's gambling casinos by about 60 percent. Call it a "gambling tax," but it is nonetheless a tax, and it makes no sense to impose confiscatory taxes on one group of Iowa businesses to make modest reductions for all others. Besides, there is no compelling case for a corporate tax cut. Iowa's supposedly uncompetitive top tax rate of 12 percent is in reality half that thanks to the ability to deduct federal taxes from state taxes. And if Iowa is going to increase taxes on gambling, shouldn't the money be used to shore up basic services rather than give tax breaks to businesses?
A shift in property tax burden
To pay for cuts in commercial property taxes, Branstad would force cities and counties to forfeit an estimated $250 million in local tax revenue over the next five years, perhaps more. This would be a serious blow to many communities, especially those in rural Iowa that are already struggling to pay for basic services. In many cases it would simply shift the tax burden to homeowners. And, it would put yet another patch on Iowa's convoluted property-tax regime that cries out for comprehensive reform.
What's missing from Branstad's agenda is an acknowledgement that Iowa is what it is today in part because of services provided by state government, and that we are safer and healthier thanks to state regulation. But many of those services are stretched too thin, and regulation of the environment in particular has failed to produce clean water and to adequately conserve precious agricultural land.
It is fair to say state government can be more efficient, and we can probably get along without some of the things it does today. But Iowans surely want fully functioning courts, safe roads and bridges, rivers and lakes we can fish and swim in, oversight of nursing homes, and fertile soil that is preserved for future generations of farmers.
These things cost money and require regulation. The new governor and the Legislature should be willing to ask the people of Iowa to support them and to pay for them.
This harsh portrait includes some truths: Iowa's schools aren't what they once were. It includes some exaggerations: The state has fiscal challenges but is better positioned than most states. And there are some falsehoods: State regulations aren't overly burdensome, and the one-time spending Branstad complains about included federal stimulus money the state would have been crazy to leave on the table.
The new governor's priorities
The budget Branstad unveiled Thursday is essentially the blueprint for his vision of the future. So what would Iowa look like if that budget becomes reality?
It bodes well for vulnerable Iowans, as Branstad provided additional funding for human services and Medicaid. Ensuring children and the poor are safe and have access to health care is right. Branstad also recognizes the need for adequate funding for public safety and prisons.
Those are the right priorities, and Branstad deserves credit for having a clear vision of what he wants to accomplish. The problem is he would create some new problems with his budget proposals.
For example, the governor would pay for a corporate income tax break by raising taxes on Iowa's gambling casinos by about 60 percent. Call it a "gambling tax," but it is nonetheless a tax, and it makes no sense to impose confiscatory taxes on one group of Iowa businesses to make modest reductions for all others. Besides, there is no compelling case for a corporate tax cut. Iowa's supposedly uncompetitive top tax rate of 12 percent is in reality half that thanks to the ability to deduct federal taxes from state taxes. And if Iowa is going to increase taxes on gambling, shouldn't the money be used to shore up basic services rather than give tax breaks to businesses?
A shift in property tax burden
To pay for cuts in commercial property taxes, Branstad would force cities and counties to forfeit an estimated $250 million in local tax revenue over the next five years, perhaps more. This would be a serious blow to many communities, especially those in rural Iowa that are already struggling to pay for basic services. In many cases it would simply shift the tax burden to homeowners. And, it would put yet another patch on Iowa's convoluted property-tax regime that cries out for comprehensive reform.
What's missing from Branstad's agenda is an acknowledgement that Iowa is what it is today in part because of services provided by state government, and that we are safer and healthier thanks to state regulation. But many of those services are stretched too thin, and regulation of the environment in particular has failed to produce clean water and to adequately conserve precious agricultural land.
It is fair to say state government can be more efficient, and we can probably get along without some of the things it does today. But Iowans surely want fully functioning courts, safe roads and bridges, rivers and lakes we can fish and swim in, oversight of nursing homes, and fertile soil that is preserved for future generations of farmers.
These things cost money and require regulation. The new governor and the Legislature should be willing to ask the people of Iowa to support them and to pay for them.
