Budget and Taxes: Promoting Balance and Accountability

Property tax limitation bill:
Pushing local services, workers aside

Threats to pensions might be eased in amendments to a bill imposing arbitrary limits on property tax revenues. But even then, Iowans should be aware of the consequences of the legislation — and the hollow claims about Iowa tax trends.

Iowa Fiscal Partnership backgrounder
Four-minute video with IPP"s Peter Fisher and Mike Owen

Not only were city and county property taxes stable in Iowa despite claims of those backing the legislation, but the property-tax plan also threatens local decisionmaking.

Iowa Fiscal Partnership backgrounder
by Peter Fisher of IPP
and David Swenson of Iowa State University

Iowa’s already generous treatment of families with inheritance tax breaks

Inheritance tax repeal would take $90 million a year from services for all Iowans
As with debates about the federal estate tax, many misperceptions exist about the Iowa state inheritance tax — who pays it, how much is paid, and how it fits in the overall structure of state and local taxes governed by state law.
Iowa Fiscal Partnership backgrounder 3/11/2019

Tuition doubles in 30 years
New national report confirms trends;
Iowa ranks poorly in nation and region

Iowa is among nine states that rank in the dozen worst on two higher education funding measures from 2008 to 2018: percentage drop in state spending per student (28.1 percent), and dollar drop in state spending per student ($2,505).

Iowa news release Oct. 24, 2019
CBPP report

capitolTax inequity:
Iowa’s continuing story

Lawmakers stack tax system against middle-
and low-income Iowans — even with new law

Iowa taxes its middle- and low-income families more as a share of income than it does wealthy families, a long-term trend worsened by the 2018 tax overhaul.
Full report from ITEP 10/17/18
Iowa fact sheet
IFP news release

Iowa Lip Service:
Our Inadequate Commitment to Clean Water

Policy makers need to acknowledge both the magnitude of the water quality problem in Iowa, and the role of nonpoint-source nutrient pollution. Financing has been inadequate.

A new report from IPP shows how we pay lip service to our financial responsibility as a state and have underestimated what is required for success.

Full report

Executive summary (or 1-page PDF)
Two-minute video by Natalie Veldhouse

capitolWhat We Got with Iowa's Backroom Tax Overhaul
Less revenue for services, more benefits to the wealthy, no reform
Iowa’s end-of-session tax overhaul, hatched behind closed doors with scant disclosure of details before passage, offers unbalanced breaks for the wealthy, a $400 million-a-year cut in revenues when the state already faced mid-year budget cuts and underfunded services. Oh, about those promises of “reform” and simplifying tax filing? Don't bother looking — it didn’t happen.

See our Iowa Fiscal Partnership analysis of the final tax legislation by Charles Bruner and Peter Fisher

See Peter Fisher’s blog post: Five things to know

Iowa Fiscal Partnership 2018 Tax Policy Kit

Mike Owen's interview on Insight on Business

state quarterOpportunity missed in ‘unleashing opportunity’

Condition of the State short on details, long on old themes

Governor Kim Reynolds delivered her first Condition of the State address, but delivered few details to show how Iowa will keep its responsibilities to working families, education and clean water.
Iowa Fiscal Partnership statement1/10/2018 PDF

The realities of Iowa education funding

Iowans long took for granted a strong and ongoing commitment to local schools. That is increasingly threatened by budget choices and options being considered at the Statehouse.
Iowa Fiscal Partnership backgrounder 1/8/2018 PDF

higher ed graphOver 15 years, state slashes commitment
to higher ed in share of university budgets

New on our blog: Tuiton rising — is anyone surprised?
This week’s announcement of plans to raise tuition at Iowa universities should not surprise anyone. When the Legislature cuts back, the regents need to fill in the gaps. And that creates new gaps, in family budgets immediately, and beyond, with — student debt.
Iowa Policy Points post by Brandon Borkovec

Research giveaways: Here we go again
Big profitable companies again the big gainers from $66 million subsidies
Begun as an effort to help startup businesses in research, Iowa's lucrative Research Activities Credit program once again is shown — in an official state report — to be a boon to large, profitable companies that pay no state income tax.
Iowa Fiscal Partnership news release

US tax giveaways: Red ink, and pain

Tax plan in Washington has nothing long-term for vulnerable Iowans, middle class, or sensible budgeting; service cuts will bring hardship — and our U.S. senators are not telling us that reality

Our senators should have warned us what the 2017 tax bill will actually do. Instead, both Senator Grassley and Senator Ernst are selling only cherry-picked data molded into a messy ball of spin and trickle-down economics, bereft of full context or history.
Iowa Policy Points post

Congress is making a deficit-compounding giveaway to big corporations and rich households at the ultimate cost of services for all, particularly the most vulnerable.
Iowa Fiscal Partnership statement

chap20challengeThe realities about Iowa’s budget shortfall

There is no silver bullet, but you cannot solve Iowa’s chronic revenue shortages without addressing the state’s rampant spending on tax credits for corporations.

View the slides from our Moral Mondays Iowa! presentation at the State Capitol

Iowa’s Problem of Priorities
Bill Starts Coming Due on Costly, Excessive Business Property Tax Cut
Tax cuts have consequences. In the case of the massive commercial property tax cut enacted two years ago, those consequences have become all too real.
Iowa Fiscal Partnership backgrounder (or 2-page PDF) 3/10/15
Peter Fisher's guest opinion in The Gazette, Cedar Rapids 4/5/15
or in The Des Moines Register 3/6/15

Balancing Out Impact of Gas Tax Increase
Iowa Could Raise the Wage if Raising the Gas Tax to Help Low-Income Working Families
Inequality graph 2015Raising Iowa’s tax on gasoline and diesel fuel by 10 cents per gallon would go a long way toward financing needed street and highway repairs. It also will affect low-income working families disproportionately more than it will high-income households. There are ways to offset those effects.
Iowa Fiscal Partnership backgrounder (2-page PDF) 2/24/15

Iowa’s Economy
Choices for Economic Growth: Consultant Cites Valid Education, Infrastructure Concerns
But once more, we're hearing the same old tired and inaccurate business-lobby spin about tax policy, which is competitive for businesses in Iowa and in some cases overly generous to a selected group.
Iowa Policy Project statement 12/18/14

Public Pensions in Perspective
Why Foundations of Iowa, Many State Pension Systems are Strong
Iowa‘s public pension systems are strong and healthy, working as intended to assure retirement security to thousands of Iowans.
Read policy brief by Imran Farooqi, Peter Fisher and David Osterberg. (33 pages) 12/12/13.
Read executive summary. (or 5-page PDF)
Read news release.

Read David Osterberg's guest opinion in the Cedar Rapids Gazette 12/15/16
Hear Osterberg on the Devine Intervention, KVFD-AM Fort Dodge 12/12/16

Child Care: Sometimes Like Falling Off a Cliff
Trying to Get Ahead with the Help of Iowa’s Child Care Assistance Program
Peter FisherIowans can fall off an income cliff when even a minimal pay increase costs them child care assistance — one challenge for low-income working families.
Read policy brief by Peter Fisher. 12/9/13.

High Cost of Child Care in Iowa Now a Barrier to the Middle Class
Lily FrenchIowa’s child care assistance programs should encourage parents to further their education and make it more possible to achieve self-sufficiency, according to a new report.
Read policy brief by Lily French and Peter Fisher. 11/26/13.
Read executive summary or 2-pg PDF.
Read news release.

Is Iowa Missing Opportunities for Real Economic Development?
Iowa’s approach to economic development has been badly skewed in favor of expensive subsidies aimed at short-term job gains instead of long-term investments in our economy.
Read Iowa's Investments in a Child's First 2,000 Days or download 5-page PDF 4/19/12
Read our news release or download 2-page PDF
early childhood vs biz tax credit spending

It's the Revenues, Iowans
State Budget Problems Rooted in Revenue Weakness

Understanding the causes of Iowa's current budget crisis is crucial to crafting good policy in response. And Iowans can't understand it unless they look seriously at the revenue roots of the problem. 2/19/09
Report (6 pages, PDF) News release (PDF)

Iowa's Spending Problem: Tax Expenditures on Autopilot

Everyone is talking about tightening belts. Make sure that effort focuses on the largest waists: skyrocketing costs of largely unchecked tax credits for businesses. 2/23/09
Report (3 pages, PDF) News release (PDF)

Responding to the Economic Crisis
How Do You Spell 'State Fiscal Relief' in Iowa?

State fiscal relief from the federal government recognizes that states may not deficit spend — but that state spending can help the economy while serving people in need.
2-page backgrounder PDF. 2/3/09

Keeping the Hole from Getting Deeper

Iowa policy makers have options to avoid deepening the recession.
4-page backgrounder PDF. 2/3/09

Local Income Surtaxes Raise Revenue, Allow Local Choice

Local income surtaxes in Iowa, in practice and potential. Includes revenue estimates for 22 Iowa cities.
Backgrounder (PDF). News release (PDF).1/26/09

From Shortfalls to Cuts — How We Got Here in 2009

Iowa’s budget picture has changed markedly since July. Why? Backgrounder (PDF). 1/16/09

Assure Everything is on the Table in Budget Balance

Governor Culver wants to assure "everything's on the table" to balance the state budget while upholding investments in a green economy, education and health care. That must include wasteful, secret subsidies to big companies through the tax code.
News release (PDF).1/13/09
Video of Des Moines Register interview with IPP's Peter Fisher.1/22/09
Budget graphs (2-page PDF).1/23/09

Some Budget Choices Could Compound Recession Impacts

Iowa policy makers should address the state’s budget crunch with choices that do not worsen the recession but do assure scrutiny on seldom-reviewed spending on tax breaks. Open letter to policy makers (5-pg PDF). 1/2/09

Closing Loopholes, Stopping Wasteful Tax Giveaways Boost Revenues Without Raising Taxes

Corporate giveaways are a good place to look for spending cuts. Briefing paper (3-pg PDF), News release (PDF). 12/10/08

Revenue Report is Evidence of the Holes in Iowa Revenue Structure

The latest revenue forecast, a deficit for FY09, shows Iowa needs a comprehensive look at its fiscal health. News release (PDF). 12/12/08

A Task for Iowa Lawmakers

Iowa lawmakers are almost certain to face immediate and severe budget challenges when they reconvene. News release (PDF). 12/10/08

The Facts and the Estate Tax
Evidence Builds Against Myths; Few Iowa Estates Pay as Millions in Wealth Go Untaxed

For the fourth year in a row, fewer than 1 percent of Iowa estates were affected by the federal estate tax in 2007, as shown by the nonpartisan Citizens for Tax Justice. CTJ Report (PDF) and IPP News release (PDF). 12/3/08

Iowa's Aging Population
Report Examines Growing Challenge for State Budget

Health-care and education investments are at risk for Iowa as the state's population becomes proportionately older. Full report (PDF), Executive summary (PDF) and News release (PDF). 12/1/08

Setting Tax Policy for Fairness and Sustainability
Ripples from a Revenue Stream: Effects of a 3/8-Cent Tax Increase for Natural Resources

Too often in the past, natural resources funding has lost out to state budget cuts or has been raided to pay for other public programs. Any sustainable funding source to correct this problem should also be fair to all Iowa taxpayers How can this be designed? Backgrounder. 11/12/08

Who Pays Iowa Taxes?
As Share of Income, Lower-Income Iowans Pay the Most

Lower-income non-elderly households in Iowa pay a much greater share of their meager incomes in state and local taxes than high-income families pay. Backgrounder. news release. 11/10/08

Grounds for Confusion
Iowa Distorts Assessment of Farm Property

Farm buildings and farmland need to be assessed and taxed separately as a first step toward a more understandable and fair system of assessing Iowa farm property. The current system is outdated and doesn't reflect the productivity of modern agricultural operations, say authors of a new Iowa Fiscal Partnership report. Report, executive summary (4 pg), news release 7/16/08

Special Focus: Tax-Increment Financing
The Iowa Journal, IPTV
Being Careful with Tax Dollars
Is Tax-Increment Financing a Good Idea for Mall Renovations?

Read Peter Fisher's perspective in The Des Moines Register. Also, see him on IPTV's "Iowa Journal" program, or view the transcript.

A Step Backward in TIF Reform
No Debate — Sales-Tax TIF OK'd, Ignoring Policy Problems

A radical departure from Iowa tax policy allows cities to divert local-option sales-tax money without approval of voters or other jurisdictions that could have expected the funds. Neither the governor nor legislators said why. News release 5/21/08

From Our Archives
See our archives on budget and tax issues since 2001; you might be surprised to see how many issues from those days remain relevant in Iowa issue discussions about tax fairness, revenue adequacy and responsible, sustainable budget policy.

A good example is this piece about tax loopholes — an unresolved issue — from April 2007:
Plugging Wal-Mart Loophole Would Save Iowa Millions
Closing corporate tax loopholes could save Iowa up to $100 million a year and even the playing field for Iowa businesses against multistate competitors such as Wal-Mart. Full report, news release.