Marijuana legalization won’t fix Iowa’s budget

One of the arguments made for legalizing marijuana has little to do with marijuana itself. Instead, it is presented as another potential source of tax revenue. That approach misses a much larger point, though. Governments are almost always searching for additional money to support additional spending. Whether the proposed tax is on marijuana, gambling, vaping, or something else, the promise is often the same: legalize or expand an activity, collect new tax dollars, and government will have more money to spend. Those promises often prove more optimistic than reality.

Iowa’s high property tax burden is deterring economic competitiveness

In recent years, Iowa has seen dramatic improvements in tax competitiveness. According to the Tax Foundation’s Tax Competitiveness Index, the state’s tax policy improved enough between 2020 and 2025 to move from a rank of 43 to a rank of 17. Still, Iowa has one glaring hole in its tax policy: a high and burdensome property tax. If the state wants to maintain a vibrant population, substantial property tax reform is necessary. Local spending is a key driver of high property taxes, so these problems must be addressed in tandem.

Government spending does not drive economic growth

Iowa has been rated as one of the most fiscally prudent states for several years running, due to sound tax and spending policies. Yet thanks in part to a recent downturn in the agricultural economy, economic growth in the state has slowed. Additionally, the state has been losing residents to other states every year since 2013, and has one of the highest outflows of young residents with bachelor’s degrees, leading to some concern over a potential “brain drain.” Though government spending is often lauded as a tool for addressing these sorts of trends, Iowa will be better served by continuing to follow a path of fiscal conservatism.

Government Spending Does Not Drive Economic Growth 

Iowa has been rated as one of the most fiscally prudent states for several years running, due to sound tax and spending policies. Yet thanks in part to a recent downturn in the agricultural economy, economic growth in the state has slowed.

Additionally, the state has been losing residents to other states every year since 2013 and has one of the highest outflows of young residents with bachelor’s degrees, leading to some concern over a potential “brain drain.”

Tax incentives vs. tax freedom: Which spurs economic growth?

Incentives may lure developers and data centers, but Iowa’s high property tax situation should be a “fire bell in the night” for local government officials. High property taxes will deter economic growth. They will discourage new residents, entrepreneurship, and force people to leave.

Kim Reynolds Sets the Standard for Good Governance. Cities Should Follow Suit.

Kim Reynolds Sets the Standard for Good Governance. Cities Should Follow Suit.