Iowa's top priority: Raising state revenue
Iowa legislative leaders and Gov. Kim Reynolds comment on plans for the 2018 session of the Iowa Legislature, which convenes Monday, Jan. 8. Bill Petroski/The Register
The new year provides an opportunity for people to chart a better course going forward. Iowa’s elected officials are no exception. Their priorities affect the lives of all residents.
This is why early each January the Des Moines Register editorial board offers suggestions for where lawmakers should focus their energies in the upcoming legislative session. We are doing this again today. The goal, as always, is to make Iowa a better place to live.
Though specific priorities are outlined below, it would be remiss not to recognize the state’s current financial difficulties. One cannot honestly advocate investing in the environment or better protecting vulnerable children, for example, when the money is not there to accomplish those goals.
And the money is not there — largely because previous legislative priorities included tax cuts, corporate giveaways and a refusal to generate new revenue. Again last year, tax collections failed to grow as predicted. Iowa was forced to make mid-year cuts and dip into reserves.
Now the state’s roughly $7.2 billion budget faces a shortfall of $45 million to $90 million.
The top priority of this Legislature, which convenes Monday, must be raising revenue.
Cutting taxes and reducing the size of government is not a vision for the future. It is a philosophy, and one that has devastated other Republican-controlled states like Kansas and Louisiana. Instead of economic growth, those states realized canceled college graduations, abused children sleeping in government offices, depleted trust funds and abrupt tax increases to rescue the state from total fiscal disaster.
Yet Iowa seems to be gradually following in their footsteps. In recent years, thousands of employees have been cut from the state workforce. As few as five troopers have been on duty overnight to patrol the entire state. Families are waiting weeks for a loved one’s remains due to a backlog of autopsies at the Iowa Office of the Medical Examiner. Institutions for the mentally ill have been shuttered.
If lawmakers refuse to raise revenue, things will only get worse. Taxes are not evil. They are an investment in the quality of our daily lives and future. Making that investment requires making revenue a priority.
Here are some other priorities for lawmakers:
Demand answers about privatized Medicaid
Former Gov. Terry Branstad’s privatization of Iowa’s $4 billion health insurance program has resulted in vulnerable Iowans losing in-home services. Health providers have closed their doors because private insurers didn’t pay them.
Under Gov. Kim Reynolds’ leadership, these companies have received more public money. One abandoned a contract with the state, leaving Iowans with no options in insurers. The legislative branch has a responsibility to intervene.
Lawmakers should refuse to appropriate a single penny for Medicaid until Iowans have objective, recent information about the costs of privatization — which appear to be more than state-run Medicaid for a model that erodes, instead of improves, access to health care in this state.
Improve mental health care
A Des Moines Register/Mediacom Iowa Poll in December shows that 64 percent of Iowans disapprove of how state leaders are handling mental health issues. That should be a signal to lawmakers, if recent tragedies weren’t enough evidence of a crisis.
But solutions won’t come easily. Simply reopening one of the mental health institutes or adding beds isn’t necessarily the right answer. Iowa needs to create more community-based approaches that include several types of beds: acute, transitional and long-term. It needs to create a system that serves children. It needs to attract more mental health providers. Perhaps the Legislature’s first action should be lifting a state law that caps the amount of property taxes that counties can collect to pay for mental-health services. The cap is stuck at 1996 levels, even though some counties have seen large population increases since then.
Help public schools (or at least don't hurt them)
Gov. Kim Reynolds says she wants to avoid cuts to K-12 school funding this year. She’s also encouraged the Legislature to revise the inequitable and complex school-funding formula. Lawmakers can also give districts more flexibility in deciding how to spend their cash reserves. All that would help cash-strapped districts. And here’s what lawmakers absolutely should not do: Create Education Savings Accounts or other expensive “school choice” schemes that take per-pupil state money and essentially give it to parents to spend on private schools.
Examine tax credits and end corporate welfare
This should finally be the year that lawmakers undertake a comprehensive review of special-interest tax breaks. Every year brings a new crop of outrageous giveaways doled out by the Iowa Economic Development Authority. This year’s winner was the $213 million in state and local incentives given to Apple in exchange for building a $1.375 billion data center in Waukee — a deal done without any public notice or debate.
The value of tax credits has ballooned by 180 percent since 2005, from $153 million to an expected $427 million this year.The most lucrative business tax credit program remains the highly controversial Research Activities Credit. The program allows major corporations with annual profits of more than $1 billion to not only avoid taxes, but sometimes collect a check from the state as “compensation” for the credits they can’t use.
Lawmakers need to get serious about rethinking a tax code that's riddled with worm holes and favors out-of-state corporations over Iowa-based businesses.
Help Mother Nature and water quality
Gov. Kim Reynolds has said the first bill she wants to sign in 2018 is one seeking to improve water quality in this state. But Iowa does not need a new law on this issue and does not have the revenue to fund one. Lawmakers should raise the sales tax a fraction of a penny to provide revenue to the voter-approved Natural Resources and Outdoor Recreation Trust Fund, created by voters in 2010. Then we could start cleaning up our filthy waterways.
Eliminate the child care cliff
Instead of gradually reducing subsidies as a family’s income increases, Iowa’s Child Care Assistance Program cuts off all aid when a recipient’s income hits 145 percent of the poverty level. According to United Way of Central Iowa, a raise as small as 15 cents an hour can disqualify a family and lead to a net loss of $4,221 a year. This discourages workers from pursuing raises that would make them less financially dependent on the state, and costs the state more money. There’s no reason Republicans, who now control the House, Senate and governor’s office, can’t address this problem.
Reform job licensing laws
Conservatives frequently advocate the elimination of burdensome government regulations they say stifle economic growth. A Republican-controlled Iowa Legislature should be scrambling to reform the state’s job-killing occupational licensing laws.
As this editorial board has repeatedly written, Iowans should not need 2,100 hours of training and a government license to cut hair. Or permission from the state to file a fingernail, interpret sign language, pluck an eyebrow or be a “milk sampler.”
One-third of Iowa’s adult workforce now must obtain government permission to earn a living — a higher percentage than in any other state, according to a 2015 White House report.
Last legislative session, lawmakers hastily cobbled together a licensing reform bill that lacked any coherent principles about which workers should be licensed and raised more questions than it answered. They should craft a thoughtful bill requiring government oversight only for workers who may put public health and safety at risk.
Reduce drunken driving's toll
Iowa has made little or no progress in reducing fatal crashes involving alcohol or lessening the percentage of intoxicated drivers who are repeat offenders. A statewide coalition has made 66 recommendations for stopping impaired driving. Only one has been adopted: a 24/7 sobriety program, which requires offenders to undergo twice-a-day alcohol testing. The Legislature passed that last session, but the version is weak. Lawmakers can strengthen that program as well as tackle other recommendations, such as examining penalties for repeat offenders, revamping treatment programs and implementing the Place of Last Drink program, which requires that OWI offenders disclose where they were served their last drink.
This editorial is the opinion of The Des Moines Register’s editorial board: David Chivers, president; Carol Hunter, executive editor; Lynn Hicks, opinion editor; and Andie Dominick, editorial writer.