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Open letter to readers: Today and tomorrow

By Lynda Waddington | 11.17.11

Wednesday was a difficult day for The American Independent News Network, which is the larger entity that operates The Iowa Independent. Our chief executive and founder announced two of our sister sites would close and their content would be moved to The American Independent.

ACS lockout continues; plan emerges to repeal sugar protections

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By Virginia Chamlee | 11.15.11

A recently introduced bill could have far-reaching impact on the U.S. sugar industry, including American Crystal Sugar, a farmer-owned cooperative that locked out 1,300 Midwest workers on Aug. 1.

Cain campaign: Farmers know more about regulations than EPA

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By Andrew Duffelmeyer | 11.15.11

The chairman for Herman Cain’s Iowa effort says the campaign “relied more on the word of farmers than Washington regulators” in deciding to run an ad containing claims the Environmental Protection Agency says are false.

Mathis wins, Democrats maintain Senate control

Liz Mathis
By Lynda Waddington | 11.08.11

The Iowa Senate will remain under the control of a slim 26-25 Democratic majority when it reconvenes in January 2012.

Press Release

PR: Nation should work to address veterans’ challenges

By Press Release Reprints | 11.11.11

BRUCE BRALEY RELEASE — As US involvement in Iraq and Afghanistan ends, it’s more important than ever that our nation works to address the challenges faced by the men and women who fought there.

PR: Honoring veterans, help in hiring

By Press Release Reprints | 11.11.11

CHUCK GRASSLEY RELEASE — A difficult job market is challenging the soldiers, sailors and airmen who have protected America’s interests by serving in the Armed Forces.

PR: In honor of America’s veterans

By Press Release Reprints | 11.11.11

TOM LATHAM RELEASE — No one has done more to secure the freedom enjoyed by every single American than our veterans and those currently serving in the armed services.

PR: Honoring and supporting our nation’s veterans

By Press Release Reprints | 11.11.11

DAVE LOEBSACK RELEASE — Veterans Day is an opportunity to reflect on the service of generations of veterans and to honor the sacrifices they and their families have made so that we may live in peace and freedom here at home.

Speaker-elect Kraig Paulsen
Speaker-elect Kraig Paulsen

Experts fear GOP cuts could undermine long-term economic growth

Swenson: 'When a business looks for somewhere to set up, they look at the education of the people there, not tax cuts'
By Meghan Malloy | 01.21.11 | 7:59 am

Republican lawmakers faced criticism Thursday from Democrats and economists who believe a bill aimed at cutting millions in state services in order to provide tax cuts will only fix short-term problems while creating holes in future budgets.

The bill in question, House File 45, is a broad spending cut bill.  Most prominently, it would eliminate universal preschool funding for four year-olds, make funding cuts at the higher education level, cut funding for family planning services, eliminate a state-funded smoking cessation program and eliminate funding for passenger rail.

The bill would also create a “tax relief fund,” which would “receive one-time excess funds from the Economic Emergency Fund, once the state reserve funds are full,” according to the legislation. Legislative Services Agency officials have pegged $327.4 million going into the fund in the 2012 fiscal year.

Republican leaders maintained the bill — which passed late Wednesday night in the Iowa House — not only will solve long-term budget problems, but will “put a band-aid on the short-term budget problems we’re facing,” Speaker of the House Kraig Paulsen (R-Hiawatha) said.

However, some state economists and analyst groups disagree, saying lawmakers are failing to consider the long-term effects.

“The plan is to take part of the year-end surplus for this tax relief fund. That surplus is normally available for the seceding [fiscal] year,” said Peter Fisher, research director for the non-partisan Iowa Policy Project. “That means taking money that should be funding state services, or should actually be preventing cuts, and putting it into a fund for one-time checks to taxpayers.”

Fisher projected such a move could result in long-term financial problems.

“It seems to me, that taking that surplus without replacing it with revenue is not sustainable for the economy at all,” he said.

Fred Abraham, professor and head of the economics department at the University of Northern Iowa, was skeptical of the proposal.

“Federal tax cuts stimulate the economy, but on the national level, not just in Iowa,” he said. “Tax cuts over in Des Moines won’t stimulate the state’s economy; it’ll just off-set the taxes for the time being.”

David Swenson, an economist at Iowa State University, said state governments are often limited in their options to balance their budgets during recessions.

“State governments must be very careful during recessions, primarily because they do not have the borrowing power the federal government has,” Swenson said. “They must balance their budgets, but for economic growth, it ought to be done in a way that allows essential state services to continue running efficiently, and that means making sure those who need these state services the most are hurt the least.”

Swenson acknowledged the bill “will certainly fix the short-term problems, but there will be long-term consequences,” especially where education and the state business climate — which he said is thriving — are concerned.

“I admit I’m biased about this because I am involved in higher education, but this hacking away at our education spending truly diminishes the state’s long-term competitiveness in the business world,” Swenson said.

“When a state government cuts away at funding to education — particularly to higher education — it sends a very strong signal to businesses, saying education is a lesser concern in that state, rather than a primary one. When a business looks for somewhere to set up, they look at the education of the people there, not tax cuts,” Swenson continued. “By cutting education spending, a state government truly undermines its long-term growth economically.”

Both Swenson and Abraham agreed the business climate in Iowa is thriving, and not because of tax cuts.

“There’s little evidence tax cuts stimulate business growth,” Abraham said. “Businesses increase their profits, but they’re not hiring people; they’re not building new factories. This [legislation] just takes money from workers and gives it to businesses.”

Swenson called suggestions that the state’s tax structure right now is undermining the business growth in Iowa “phony,” adding: “There’s just no evidence of that.”

Paulsen said Thursday he remains confident that the bill will get a fair hearing in the Democrat-controlled Iiowa Senate.

“The Senate will look at it, and obviously, there are parts they collectively accept and parts they collectively oppose,” he said. “Those will be brought up, and we’ll work them out and talk about them.”

When asked if the legislative session would be a constant battle between Democrats in the Senate and Republicans in the House, leaving bills dead in the wake, Paulsen said, “I’m sure that will be the case with some bills, of course,” though did not elaborate about if this applied to House File 45.

Meanwhile, Democrat lawmakers criticized HF45, alleging the Republicans are pushing a social agenda that includes cutting funding to education.

“These were bread and butter issues we dealt with last night,” House Majority Leader Linda Upmeyer (R-Garner) said Thursday morning. “There was nothing to indicate these were social issues or a social agenda. We wanted to take the first step to getting this budgeted aligned and start work for next year’s budget.”

Earlier in the week, Rep. Sharon Steckman, D-Mason City, called the elimination of universal preschool funding, “A job killer that picks on four year-olds.”

Upmeyer said she found Steckman’s comment “confusing.”

“There are multiple ways to send children to preschool,” she said Thursday. “I sent five kids to preschool, (and) I wrote the checks for it.”

Paulsen said the fate of universal preschool “will change, but what the final picture will look like, I do not know at this time.”

Democrats in the Senate have said the battle over universal preschool funding is not over. Though the Senate could potentially introduce their own legislation in response, Senate Majority Leader Mike Gronstal (D-Council Bluffs) said the Senate is currently “evaluating the bill. No determination has been made (on what to do next).”

Upmeyer said bills pertaining to government transparency and voter identification are expected to be debated next week. A joint resolution to allow Iowans to vote on same sex marriage was just assigned to a subcommittee, which is expected to start meeting next week to discuss the legislation, leaders added.

Follow Meghan Malloy on Twitter


Comments

  • Anonymous

    “A job killer that picks on four year-olds.” Heh.

    Seriously, I know everyone likes free money and nothing buys friends faster than handing some out. So, way to cement your position, Republicans! By buying anyone fickle enough to be bought!

    Some of us, however, don’t mind paying taxes that promote long term growth, prosperity, and success for our state. It’s called an investment in our future. Here, let’s sound it out, because I’m guessing education has failed you folks: I-N-V-E-S-T-M-E-N-T. That’s right, learning only hurts the first few times!

    You see, some of us understand that if we don’t go throwing money down the drain, we can put it to good use growing companies, products, or people, with a bigger pay-off in the end. When we send every child to pre-school, it gives every child the opportunity to start learning at an early age, which may be the boost that gets them into college or into a good trade, and improves their likelihood of being well-adjusted, independent, self-supporting, and even prosperous. And you know what? Someday those well-adjusted prosperous people will pay taxes. I would like them to be earning more at that point.

    In fact, well-adjusted, well-educated, prosperous people outside the state may also look at how well we support our future in child form, and decide based on that whether to bring their own stability and taxable income here. Sometimes with accompanying businesses and jobs. You see, offering early education to all improves our standard of living for the whole state, and that can make or break a person’s decision to move here. It was the reason my parents moved here.

    I’m glad Upmeyer could afford to send her kids to preschool, but not every parent can. For some families, the cost of schooling may not be met by whatever part time job the parent can pick up while the kids are away. Should the parents opt for a full-time job, and send the kids to daycare? That hardly seems to bring them closer to the traditional family structure the neocons are always on about.

    Early education isn’t just about making parents or kids happy. I’m not a parent, and never expect to be. Nonetheless, I absolutely endorse spending my hard-earned tax money to support these programs. Why? Because if I’m still here in 20 years (which seems increasingly unlikely, given Iowa’s precipitous slide into crapitude) I would like to be surrounded by 20-somethings who have been given the early boost that will make them more productive and better citizens. And in 40 years, I’d like to be surrounded by 40-somethings who remember that we support people in this state. I may need a hand in the future, even if it’s just there to hold the door for me. That’s why I’m happy to continue investing now.

  • Anonymous

    We do not need Tax Cuts…….but we need cuts in Republican Conservatives and Liberal Democrates bu cutiing both parties forming completely independent party by true reformers (Not T-Party it is still party of Republican Conservatives)..but NO Party…God’s given brains to these elected representatives are to make individual decission…Not Yes Man….Yes Party…Yes Agenda…set by EGO and Opposition agenda to just oppose what opposit party is suggesting….Get those dumb BRAINS out from politics fopr ever from both parties…..Start electing students, doctors, plumbers (Not the Jo’s), accountants, production supervisor, Moms, teachers, professors….NO LAWYERS AT ALL…..there are too many……all they do is keep on making complicated laws…..According their Laws we all are guilty of something and procecutable…..”Remember Patriotic act—under this act even president , you and me are guilty of what ever can be put behind the bar if they decide whether we are guilty or not….” We need constitutional amendment of abolishing and revisitng all the laws on the book and simlify and teachable some in elementry school, some in high school and some through c-span….all all citizen should participate in them….NO complicated words in constitutions, in bank contracts, in government contracts, in even legal contracts. Simple Ameraca but Best America……Is there any True American Hero and Leader who can start this movement and still be truthfull after getting elected till the death apart……

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