We won’t know the full story on Iowa’s film tax credit for weeks, as investigators look into lax oversight and other problems at the Iowa Department of Economic Development. It may be months before we learn whether Iowa taxpayers will end up paying around $110 million or as much as $300 million in exchange for some temporary jobs in the film industry.
One thing is already clear, however: the original bill creating the film tax credit laid the ground for this costly mistake. Todd Dorman isn’t buying state legislators’ effort to pin all the blame on IDED, with good reason:
One common theme in this week’s legislative dodge-fest is that the Department of Economic Development pushed through rules governing the program on an “emergency” fast track in July 2007. Lawmakers insist that left them no chance to review the rules before they took effect, including allowing credits for the purchase of aircraft, vehicles, furnishings, hairstyling and makeup.
There’s one small problem with that argument: Much of what was in those rules was also spelled out in the bill they approved by overwhelming bipartisan majorities. The cars, the planes, the hair. All there.
You also have to wonder why lawmakers approved a tax credit program with the authority to hand out tens of millions of dollars but provided only enough money for a one-person office to administer it. A recipe for trouble.
And last spring, when legislators prudently decided to cap dollars flowing from the program, why did they delay screwing on that cap until July 1? In the meantime, a flood of credit applications exploded the program’s potential cost.
The film tax credit received little attention when it was created, probably because it was uncontroversial (approved 95-1 in the Iowa House and 48-2 in the Iowa Senate). Journalists covering the statehouse and political junkies like me tend to notice action and partisan warfare.
Unfortunately, a lot of bad laws glide through the process with little controversy. Some of them give the appearance of solving a problem without accomplishing anything. The sorry excuse for campaign finance reform the legislature approved unanimously this year comes to mind. So does Iowa’s 2002 law establishing residency restrictions on sex offenders. Every legislator but Ed Fallon voted for that bill, but such laws do nothing to protect children from predators, in the opinion of groups representing county attorneys, corrections officers, prosecutors, and advocates for missing and exploited children. (Legislators fixed some of the problems with that bill during the 2009 session.)
Sometimes consensus politics ends up constraining the rights of individuals. The 1998 Defense of Marriage Act sailed through the Iowa legislature with only Fallon voting no, but the Iowa Supreme Court unanimously held this year that “the exclusion of gay and lesbian people from the institution of civil marriage does not substantially further any important governmental objective. The legislature has excluded a historically disfavored class of persons from a supremely important civil institution without a constitutionally sufficient justification.”
During the 2009 session, the little-noticed House File 233 unanimously passed both the House and Senate. It changed the rules so that citizens have only ten days (as opposed to the 12 months previously allowed) to file a lawsuit challenging a school board’s decision on disposition of property. As a result, Iowans will in effect have no legal recourse against future decisions by school boards.
Let’s not forget the nursing home bill that Iowa legislators also approved unanimously this year. That bill eliminated fines for the most common causes of neglect in nursing homes. Advocates for the elderly warned that the bill would make it easier for nursing home operators to violate Iowa law.
Federal laws approved with huge bipartisan majorities can turn out to be unwise as well. Some are merely useless, such as the 1996 Health Insurance Portability and Accountability Act, which failed to curb unfair practices by private health insurance providers.
Others are harmful. Banking deregulation laws (like this one) passed Congress with large majorities during the 1980s, contributing to the Savings and Loan crisis that eventually cost taxpayers more than $150 billion.
No one person could keep track of all the bills pending in Congress or even the Iowa legislature, but the film tax credit debacle should remind us all that the most significant bills aren’t always the ones that generate heated debate. By the same token, getting everyone to agree to do something doesn’t make it worth doing.