Republican lawmakers completed work on their top priority last week. Disregarding their longtime mantra of not using “one-time money” to fund ongoing expenses, Republicans cited the state’s record budget surplus—which primarily stems from temporary federal assistance related to the COVID-19 pandemic—as an excuse to make deep, permanent tax cuts.
Democratic lawmakers decried the cuts as unfair, noting that the Republican plan would make Iowa’s tax system more regressive and would not address key workforce problems, such as the high cost of child care. It would also give some 3,000 Iowans earning more than $1 million per year an average tax cut of $67,000 each year—more than 100 times as much as what the average Iowa household (with annual income around $68,000) would receive in tax cuts.
While those points are important, this post will focus on another problem with the GOP approach. If the experiences of Kansas and Louisiana are any guide, Iowa’s state government will soon face a fiscal mess.
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