Reject the “Blue” State Model

A recent editorial by the Des Moines Register asks whether the push for “smaller” government in Iowa has achieved a point where it is “too small to work.” The editorial argues that those who believe in a “smaller, more efficient” government fail to address how limited government can solve some of the policy problems confronting Iowa. In other words, the […]

Fiscal Conservatism Works

Following a path of fiscal conservatism is never easy. Numerous interests are calling for either new or an expansion of existing taxpayer funding for programs. Policymakers are confronted with difficult decisions in crafting a budget and providing for the priorities of government, but at the same time trying to be good stewards of taxpayer dollars. The pressure for policymakers to […]

Conservative Iowa Budget

Iowa Gov. Kim Reynolds and the Republican-led legislature have mainly been following fiscal conservative principles of limiting spending and reducing tax rates. Gov. Reynolds even received an “A” grade from Cato Institute’s 2020 Fiscal Policy Report Card on America’s Governors for her fiscal conservatism. As a result of conservative budgeting practices, Iowa’s fiscal house was not only prepared for the economic emergency caused […]

Conservative Budgeting is the Best Path Forward

The Revenue Estimating Conference (REC), which is tasked with the difficult job of projecting state revenues, held their December meeting and is estimating Iowa will collect $8.2 billion in revenue for Fiscal Year (FY) 2022. The REC also increased the current FY 2021 estimate to $7.9 billion, which is a $65 million increase from their previous projection. The REC will […]

Iowa Governor Makes the Grade

The Cato Institute released their 2020 Fiscal Policy Report Card on American Governors, which “grades governors on their fiscal policies from a limited‐​government perspective.” The report utilized “statistical data to grade the governors on their tax and spending records — governors who have restrained taxes and spending receive higher grades, while those who have substantially increased taxes and spending receive […]

Conservative Budgeting Pays Off

Governor Kim Reynolds announced, Iowa will “end Fiscal Year 2020 with a balance of $305.5 million in its General Fund.” Governor Reynolds and the Republican legislature have been following prudent budget policies. This has been especially difficult considering the COVID-19 pandemic and uncertainty in the agricultural markets.   “Fiscal responsibility has put the state of Iowa in a strong position […]

2020 Candidate Education Guide

Recently TEF Iowa polled Iowans to get their view on some key public policy issues. In this guide you will find not only how Iowans think about these issues, but also public policy solutions that align with the interest of Iowans. TEF Iowa has developed this guide as a resource to provide legislative candidates additional information on some of the […]

Taxpayer Protection Starts with Limiting Spending

Governor Kim Reynolds and the legislature have been working to control spending in Iowa. Prior to the COVID-19 emergency, Iowa was in a strong economic position with healthy and stable revenue growth. This included $800 million in reserves and a $400 million surplus. By March, all of this changed as the pandemic triggered an economic downturn and revenue uncertainty. In […]

Tax Rates Are the Key to Economic Competitiveness

The American Legislative Exchange Council (ALEC) released the 13th edition of Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index. Rich States, Poor States, measures the competitiveness of each state in terms of economic outlook and performance. In the latest rankings, Iowa has moved from 29th to 25th in terms of economic performance, but in terms of economic outlook, Iowa […]

Spending Restraint: A Conservative Budget

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 […]

Tough Budget Decisions Ahead

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. […]

Iowa Revenue Source

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 […]

Uncle Sam to the Rescue?

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.”     […]

High Cost of Economic Development Incentives

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 […]

Prepare for Impact

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 […]

State Tax Reform’s Gold Standard

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 […]

Navigating Tax Reform

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 […]

Playing Games with the Tax Code

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 […]

Stop the Free Handouts

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 […]

Tax Credits

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, […]

Economic Development Reform in Iowa

Forty-nine states and the District of Columbia have some sort of tax-increment financing program incentivizing companies to do things they otherwise would not do. The concept has merits, but the way it is applied in Iowa and elsewhere has problems. In fact, many local policymakers hate it, but they feel powerless to stop offering these giveaways.   In Iowa, the […]

Understanding the Societal Cost of Runaway Tax Credits

Iowa’s massive tax credit programs come at a very real and harmful cost to its ability to provide basic public services. Any meaningful discussion of how much Iowa’s state and local politicians are handing out in tax credits must include the context of what governments could have accomplished with the revenues they won’t be receiving thanks to those tax breaks, […]