September 28, 2022

Conservative Budgeting Continues to Pay Off for Iowa

Governor Kim Reynolds announced that Iowa’s budget will end Fiscal Year 2022 with a $1.91 billion surplus, which follows Fiscal Year 2021’s $1.24 billion surplus. Iowa’s financial position is due to prudent budgeting and fiscally conservative policies. Governor Reynolds and the legislature are demonstrating that their fiscal policies work to create a healthy economy and a strong financial foundation.

Kraig Paulsen, who serves as the Director of both the Departments of Management and Revenue, stated that “Iowa’s strong financial status again proves that we continue to over collect from Iowa taxpayers.” As a result, Governor Reynolds and the legislature have made it a priority to return the money back to taxpayers.

John Hendrickson Economy
September 2, 2022

State Revenue in August Paints a Positive Picture

Iowa’s revenue report for August has been released and the news for the month was encouraging. Even under the weight of continued inflation and a national recession, the state’s net General Fund revenue was $57 million (6.5%) above the August 2021 net revenue level.

When broken down by the three largest sources of revenue-personal income tax, sales/use tax, and corporate income tax-each category demonstrated monthly growth over 2021 (directly from the LSA Revenue Memo):

Sarah Curry, DBA Government Spending
August 27, 2022

Time for Tax Credit Reform

Iowa’s historic tax reforms this year focused on lowering the income tax rates paid by Iowans and the companies that employ them. The next step needs to be changing who is – and is not – paying those taxes. If Governor Kim Reynolds and the legislature want to truly position Iowa for the future, it’s time to take on the state’s addiction to special tax breaks.

John Hendrickson and John Mozena Budget
August 19, 2022

As the Pandemic Ends, Federal Strings Tangle Medicaid in Iowa

Given the Center for Disease Control’s (CDC’s) recent easing of its COVID-19 guidelines, the national public health emergency appears near its end. The technical end of this emergency declaration will signify that the pandemic is officially over. And while that development will be cause for celebration, it will also trigger a major event for state governments and citizens enrolled in Medicaid.

Sarah Curry, DBA Government Spending
August 9, 2022

A History Lesson for President Joe Biden

A nation emerging from a significant pandemic and an economic downturn awaited President Joe Biden in early 2021. President Warren G. Harding inherited a similar situation after winning the 1920 election in a landslide. But Harding overcame it by getting government out of the way. The economy recovered quickly—whereas Biden enacted bad progressive policies that have resulted in a double-dip recession with 40-year high inflation.

John Hendrickson and Vance Ginn, Ph.D. Economy
August 4, 2022

July Revenue Figures Show Strength In Times of Uncertainty

The first month of Iowa’s new fiscal year is now behind us. While looking at a single month is just one small slice of the pie, it might be hinting at some economic trends we are seeing nationwide.  Record low unemployment could be resulting in higher than expected income tax payments, while fast growing inflation and a looming recession might be causing people to spend less of their money.

Sarah Curry, DBA Government Spending
August 3, 2022

Make the Tax Cuts and Jobs Act Permanent

No one knows the future direction of the American economy, but several danger signs are ahead. One is continued inflation at 40-year highs or worse — a cruel hidden tax that eats away wages and savings, with more suffering for families struggling to afford groceries and gasoline. Another is a recession triggered by high interest rates designed to fight inflation. This means job losses, lower incomes, smaller nest eggs as stock markets contract, and even tougher times for businesses reeling from supply-chain shortages.

John Hendrickson and Pete Sepp Economy
July 26, 2022

The Impact of the National Recession on Iowa

Politicians, policy makers, and members of the media are scrambling to redefine the term “recession” for the American public. Sometimes these explanations are counter to the traditional economic classification of a recession which is two consecutive quarters of negative growth, as measured by the nation’s Gross Domestic Product (GDP). For anyone keeping track at home, though, the economy declined by 1.6 percent during the first quarter of 2022, and the first estimate of second quarter activity is scheduled to be released on Thursday, July 28; the next announcement of GDP data could signal the arrival of a recession. That GDP release will likely follow another interest rate hike by the Federal Reserve as the FOMC tries to turn back inflation that’s at a 40-year high.

ITR Foundation Economy
July 26, 2022

The Fight to Restore Fiscal Sanity to Congress

The record high inflation that is plaguing Americans is being fueled by out-of-control federal spending. The federal government has spent over $6 trillion on COVID-19 related pandemic stimulus measures. The most recent, American Rescue Plan Act (ARPA) was not even needed as most states are experiencing large surpluses. The national debt is over $30 trillion and rising, which translates to an estimated $97,500 per citizen.

John Hendrickson Federal
July 20, 2022

State Government Employment Trends

One topic that comes up frequently when we sit down with taxpayers across Iowa is the number of people our state government employs.  Iowans intuitively understand that there are very real and significant costs shouldered by the state for each member of its workforce.  For instance, the Legislative Services Agency reports in their most recent Factbook that Iowa spent over $1.5 billion in total compensation just three years ago, accounting for roughly 20% of that year’s state budget.  And that doesn’t even count employees at the three regents universities*!

ITR Foundation Budget
June 23, 2022

Unemployment Rate Continues to Fall: Biden Recession Ahead?

Iowa’s economy is in strong condition. Problems remain, such as the need for more workers to fill the thousands of open jobs throughout Iowa. Nevertheless, thanks to sound conservative fiscal policies from Governor Kim Reynolds and the legislature, the state is on a solid foundation. Conservative budgeting and pro-growth tax reforms are creating a stronger economy. However, national economic headwinds are creating problems and it appears more likely that an economic recession is imminent.

John Hendrickson Economy
June 7, 2022

A Pro-Taxpayer Budget

The 2022 legislative session was historic for Iowa taxpayers. Nearly two months ago the legislature passed the largest tax relief measure in Iowa history, which was signed into law by Governor Kim Reynolds on March 1. What too many people overlook is that significant tax cuts like Iowa’s are only made possible by years of prudent and conservative budgeting.

Since 2018, Governor Reynolds and the legislature have placed an emphasis on passing tax reforms and restraining the growth of spending. This legislative session delivered the third (and largest) round of tax cuts yet, which was accompanied by a budget for Fiscal Year (FY) 2023 of $8.2 billion. This is a slight increase from the $8.1 billion FY 2022 budget and will likely mean yet another large budget surplus. 

John Hendrickson Budget
May 31, 2022

Iowa’s Unemployment Rate Continues to Decline

Iowa’s unemployment rate declined to 3 percent in April, which is down from 3.3 percent in March. “The number of unemployed Iowans decreased to 50,900 in April from 55,600 in March. The total number of working Iowans increased to 1,646,800 in April — a figure that is 10,000 higher than March and 45,100 higher than one year ago,” reported Iowa Workforce Development. Unemployment insurance claims are at their lowest level since 1973.

John Hendrickson Economy
April 25, 2022

Iowa Poised to Make a Move

For fifteen years the American Legislative Exchange Council (ALEC) has produced Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index. This broad index measures 15 policy variables that ALEC has deemed important to economic growth, with a particular focus on tax and spending policies.

John Hendrickson Economy
April 25, 2022

Intentions Don’t Always Equate to Results

“One of the great mistakes is to judge policies and programs by their intentions rather than their results” – Milton Freedman

This quote hits home for many of us who care about public policy, and it applies most accurately to using our tax dollars to incentivize companies to do business in Iowa.  Depending on one’s view of incentives, this can be thought of as economic development, or corporate welfare, or even crony capitalism.  The reality is incentives are a tool used to compete in our global economy and literally every state in the nation has adopted some form of incentive program.

Sarah Curry, DBA Budget
March 30, 2022

What Would Hamilton Say About China?

A few recent headlines have passed without much attention. The first story is our national debt has reached $30 trillion, while the second is the trade deficit for 2021 hit a record  $859.1 billion. Both stories were virtually ignored because the American people have just become numb to the topics, though they may be missing some wider ramifications, especially when it comes to trade.

John Hendrickson Economy
March 28, 2022

A Very Short Primer on What Causes Inflation

By Patrick Barron What almost everyone calls “inflation” is really a rise in the general price level. OK. But the real definition of “inflation” is inflation of the money supply. A rise in the general price level is a consequence of inflation of the money supply. Technically, the price level is determined by supply and demand, one of economic science’s […]

Guest Columnist Economy
March 22, 2022

Remembering Bob Williams

By John Hendrickson This past week we lost a champion of liberty with the passing of Bob Williams. Bob served as a state legislator from Washington and he founded two state policy think tanks, Evergreen Freedom Foundation and the Washington Policy Center. As a lawmaker and as a public policy professional, Bob Williams was a budget hawk and a defender […]

John Hendrickson Budget
March 21, 2022

Budget Growth & Tax Cuts: A Win-Win for Iowa

Let’s make something clear right away: Iowa’s state budget is going to continue to grow in the coming years. The only reason that point may be in question is Iowa’s Revenue Estimating Conference (REC), which has the difficult responsibility of estimating revenue for the state, recently released updated projections. The REC increased the current fiscal year (2022) estimate by 4.2 […]

John Hendrickson Government Spending
February 15, 2022

Strong Fiscal Rules Lead to Better Tax Policy

This year is shaping up to be a big one for tax relief. From Mississippi to Kansas to Virginia to Iowa, elected officials are taking many paths to make taxes less burdensome, but they should all bear one thing in mind: without spending discipline, sound tax policy is impossible to maintain over the long term. Government officials at both the state and federal levels have been trying for years to tax and spend their way to fiscal success. This is no way to build a stable fiscal house. Luckily, some states this year are exploring the kinds of strong budgetary rules that create the conditions for prosperity.

John Hendrickson and Pete Sepp Budget