Iowans Are Paying For Corporate Tax Giveaways

If you don’t have as much income as you thought, you need to reduce the amount you spend. In a nutshell, that’s the situation Iowa finds itself in as the fiscal year goes on.

Recently, the Iowa General Assembly voted to cut $118 million in spending to account for less-than-expected revenues. The state universities are taking the biggest hit. They must find $18 million to cut from their budgets between now and June 30, the end of the fiscal year. Community colleges have been reduced $3 million.

A $6 million budget reduction cuts the Iowa Cultural Trust. Interest from the trust funds arts projects around the state.

Iowa courts will be shut down one day following $3.3 million in cuts, with 1,400 court employees on furlough.

The Legislature and the governor cut one million dollars from the Department of Public Safety, at the same time the State Patrol has only a half-dozen troopers on duty statewide most nights.

These cuts to higher education will make it more difficult to boost Iowa’s skilled workforce. They will affect Iowa’s most vulnerable populations, including kids with cancer and cuts to public safety will impact our ability to keep Iowans safe.

How did this happen?

We base our budget partly on revenue forecasts from a non-partisan group called the Revenue Estimating Conference. Farm income is down and the revenue forecasts have been lower than expected. The forecasting formula used by the conference dates back many years and it may be worth reexamining.

But my thought is the Legislature hasn’t included corporate tax incentives in the pain. We grant around $400 million in tax breaks to businesses, much of it to out of state corporations. We are giving away money to companies for not moving, or for not reducing employment as much as they originally planned. These corporate tax giveaways should be reviewed and reduced, if we are cutting the arts, natural resources and education.

Over the last several years, corporate tax giveaways have decimated our budget surplus. Unfortunately, it’s Iowans who are being forced to pay for those corporate giveaways.

Iowa is reaching the point of diminishing returns on spending cuts. We are getting to the point where the quality of life in Iowa is in jeopardy. Our budget cutting in favor of corporate giveaways is costing Iowans dearly in terms of public safety, the arts and government services.

 

by Representative John Forbes
Posted 2/8/17

6 Comments on "Iowans Are Paying For Corporate Tax Giveaways"

  • Exellent article Representative Forbes. When will we Iowan’s wake up? It’s another corporate give a way by the Republicans guised in the notion that it will mean a big bump in employment and opportunity for the state.

  • Iowa needs the resulting increase in the number of private sector jobs that generate state tax revenues. There’s no better way to keep up with the ever higher cost of government, most of which is the result of higher wages and benefits gained through collective bargaining. Arbitrators have generally ruled that it is the state’s responsibility to raise any amount of money that the agreements require. So increasing the number of private sector jobs is preferable to raising the number of state government-funded jobs.

  • Republicans are now firmly in control at the state and national levels, and corporate giveaways will continue unabated. Inadequate public school funding will become far worse as soon as the Republican Congress approves the voucher plan for private schooling. And we won’t need professional law enforcement either as soon as the Republicans in the Iowa legislature and governor’s office have made it possible for anybody and everybody to acquire, possess and use weapons of any and all types without permits of any kind, all for the primary benefit of those who manufacture and sell such. And the decades-long Republican effort around the nation to rid the country of all labor unions, be they for public or private employees, is now very close to being achieved here in Iowa. No unions guarantees reduced operating costs whether for public or private employers. Courts and judges; they don’t generate any net revenue so why should we even have them?

    To be fair, of course, the Republicans controlling Iowa’s government are going to generate a “huge” increase in sales tax revenues this year simply by changing the law so as to permit the sale, purchase, possession and use of fireworks! What are a few fires, explosions or personal injuries a day in the grand scheme of things?

    If enough Iowa voters wake up to what is really going on here they will have an opportunity to begin a change in legislative agendas and actions in only two years. If not, then we are going to continue to get what the Republicans are now giving us.

  • Corporations should be made to pay their share, not get big checks written by the state and taken out of state. The state should be able to lure business here as opposed to other states because of the quality of Iowa’s workforce. Wait, education has been hit hard. I guess these corporations do not need an educated workforce. Public sector jobs aren’t going to educate kids, put out fires, police our communities, maintain our roads. Why would private sector employers want to move to a place like that?

  • Aja, above, are Iowa corporations receiving “big checks written by the state”? Or, aren’t they just mostly being allowed to keep & use more of their own money via a tax credit or incentive program–which many states offer? Big difference!

  • I feel really sorry for people living in Iowa! These new possible laws are crazy! The rich get richer and the middle and poor get poorer!

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