The coronavirus (COVID-19) is having an impact on economic growth in Iowa. The Bureau of Economic Analysis (BEA) released Gross Domestic Product (GDP) by state from the fourth quarter of 2019 to the first quarter of 2020, which demonstrates some of the economic impact of COVID-19. During this time Iowa’s economy declined by -3.5 percent. Other than Nebraska and South […]
Crafting a state budget is never an easy process and this year was especially difficult with drafting a budget amid the COVID-19 pandemic. Prior to the COVID-19 emergency, Iowa was in a strong economic position with healthy and stable revenue growth. By March, all of this changed as the pandemic triggered an economic downturn and revenue uncertainty. In May, the […]
Iowa, just as with other states, has become dependent on the federal government for support. Iowa’s $7.6 billion state budget is dependent on the equivalent in federal aid to help fund numerous programs. Through these funds, the federal government can impose both funded and unfunded mandates on the states. This growing dependency on Uncle Sam is dangerous not only because […]
Iowa’s economy has begun the process of reopening with continued limitations due to social distancing. Nevertheless, economic uncertainties remain. How will businesses cope with operating at limited capacity? Will Iowa consumers feel safe to fully reintegrating into the economy or will a fear of a “second wave” keep people away? How will lost economic activity impact state and local tax […]
Iowa’s economy is reopening, but the economic impact of COVID-19 (coronavirus) is still uncertain. Iowa’s April unemployment rate was 10.2 percent because of business closures resulting from social distancing policies used to mitigate the virus. The economic impact of COVID-19 is still a fluid situation. One of the uncertainties is the impact of the virus on state and local revenues. […]
Executive Summary As of May 20, 2020, the CDC calculates that COVID-19 has generated 99,498 U.S. deaths and 449 Iowa casualties. Per 1,000,000 in population, this represents 303 deaths for the nation, and a much lower 149 for Iowa. Due to COVID-19, the U.S. economy contracted by 4.8% in Q1, 2020, and Iowa’s economy experienced: Highest level […]
The COVID-19 pandemic is precipitating an unprecedented economic downturn, and small businesses are likely to bear the brunt of it. Mandatory shutdowns and social distancing are forcing many small businesses to shut their doors, leaving millions of people out of work and driving down sales. Even when governments begin lifting social distancing restrictions, the residual effects of unemployment and disrupted […]
Do you know that the income taxes you pay to the state of Iowa makes up the majority of the General Fund budget? Iowa’s General Fund is supported not just by income taxes, but also sales and a variety of other taxes, fees, and revenue sources. In addition, the budget is supported by taxes paid to the federal government. In […]
Iowa’s economy is in a recession marked by high unemployment, not seen since the Great Depression of the 1930s. Iowa’s economic crisis is a result of the coronavirus (COVID-19), which has forced an economic shutdown of the state. Low commodity prices are also having a detrimental impact on the farming industry in our state. Ernie Goss, PhD, who serves as […]
David Kennedy, prominent historian and Stanford University professor, in an interview with Governing discussed the COVID-19 (coronavirus) emergency in relation to the Great Depression. In that interview he stated, “[President] Calvin Coolidge said that if the federal government went out of business, the average person wouldn’t notice for six months, except for the post office. Now, the federal government is twice the size of the states all put together.” […]
The United States is confronted by an unprecedented crisis with the coronavirus (COVID-19) pandemic. From an economic standpoint, the COVID-19 crisis is being compared to the Great Depression with the growing army of unemployed Americans and the possible historic loss in state and local tax revenues. In March, Iowa along with other states, closed the economy except for essential businesses […]
Executive Summary As of April 24, the CDC calculates that COVID-19 has generated 24,555 U.S. deaths and 48 Iowa casualties. Per 1,000,000 in population, this represents 75 deaths for the nation and a much lower 15 for Iowa. Due to COVID-19, the U.S. economy contracted by 4.8% in Q1, 2020, and Iowa’s economy experienced significant hardships. Highest level […]
The High Cost of Economic Development Incentives as a Tool for COVID-19 Recovery Overview: The last sustained period of economic downturn in the United States saw explosive growth in the size and scope of state and municipal tax credit and abatement programs, subsidies, grants and other forms of economic development incentives. With the benefit of hindsight and new research […]
In an attempt to slow the spread of the coronavirus (COVID-19) the national economy is closed, which is resulting in millions of people unemployed and businesses wondering if they will survive. Shelter-in-place and social distancing policies are working to slow the spread of COVID-19, but the longer the economy remains closed the greater the damage will be. There is great […]
The coronavirus (COVID-19) is impacting Iowa’s entire economy. Social distancing, meant to slow the spread of the virus, has resulted in business closures and vast numbers of Iowans forced into unemployment. It is also impacting Iowa’s agricultural economy. A new study by the Center for Agricultural and Rural Development at Iowa State University estimates that COVID-19 could impact agriculture in […]
The coronavirus (COVID-19) is frightening enough, but the economic consequences of the virus makes the situation even more terrifying. As a result of COVID-19, thousands of Iowans are filing for unemployment and businesses across the state are trying to fend off bankruptcy. The current “cure” or deterrent to stopping the spread of the virus is social distancing and shelter-in-place policies, […]
The threat of a national economic recession hangs over the United States as a result of the health emergency caused by the COVID-19 (coronavirus) pandemic. While much attention has been paid to what lawmakers in Washington D.C. have done, states and localities are also bracing for an economic recession. A month ago, Iowa’s economy was in a strong position with […]
North Carolina is one of the state’s best prepared to deal with the budget challenges from the new coronavirus outbreak. It also represents the gold standard for state tax reform, and the connection between these two should not be lost. The Tar Heel state has successfully reduced tax rates, while controlling the growth of spending and funding the priorities of […]
In our current situation, prudence is the best fiscal policy. The economic impact of COVID-19 or the coronavirus is still uncertain. This national health emergency has resulted in business closures, unstable markets, and uncertainty as to when Americans can return to normalcy. Prior to COVID-19, the national economy, as well as Iowa’s, were both doing well; now fears […]
In Des Moines, PILOTs (payment in lieu of taxes) on non-profits are being considered to address high property taxes. Should government focus more on additional revenue or fight for less spending? The city of Des Moines is trying to address high property taxes and PILOTs are being considered as a solution. PILOTs or payment in lieu of taxes, are payments […]
Reforming a state tax code in order to provide relief, economic growth, and create a more competitive economic climate is difficult. A major reason for this difficulty is tax rate reduction is in direct conflict with numerous policy interests that demand new or additional spending. Rather than reducing rates and reforming the tax code, it is often easier to approach […]
Iowa’s top 12 percent corporate income tax is the highest in the nation. In 2018 the Iowa legislature passed a comprehensive tax reform law and the top rate will be lowered to 9.8 percent in 2021. Even at 9.8 percent, Iowa will still have a high corporate income tax rate. When it comes to tax policy it appears to be […]
Tax credits and incentives are often an enticing siren song that lures state and local policymakers. Both are seen as not only necessary for economic growth, but also to help solve a variety of policy problems. Whether at a state or local level, tax credits and incentives often fail to deliver on the intended economic growth. They often create a […]
Iowa Has One of the Worst Business Climates in the Nation Iowa competes with 49 states for businesses and people. What policies will allow Iowa to be more competitive and attract more people, businesses, and entrepreneurial activity? While the economy overall is doing well, Iowa is still confronted with some serious economic problems. Whether it is slow population growth, […]