Research by the Iowa City-based public policy research and analysis organization found that the state can garner $3.70 in increased tax revenue for every dollar invested in helping a low-income adult get an associates degree and $2.40 for every dollar invested in a bachelor’s degree.

The group points to a projected shortage of skilled labor combined with the rising cost to families for postsecondary education as proper motivation to invest in the state’s workforce.

“When low-income adults have access to increased education and training, their lifetime earnings increase substantially, generating tax revenue for the state that more than offsets the cost of investing in this access,” said Lily French, research associate and outreach coordinator for Iowa Policy Project, later adding: “An investment in workforce skills would prepare Iowans for the future and contribute to rebuilding our economy.”

The ad will air in the Des Moines and Cedar Rapids markets as well as some cable around the state. It is titled “Stronger Than Ever” and focuses on the governor’s response to last year’s flooding and to the state’s economic downturn.

“The new ad … puts the economic situation and recent budget decisions in context,” Culver campaign manager Andrew Roos said in a press release announcing the ad. “With the worst natural disaster in Iowa history, and the deepest economic downturn since the 1930s, Iowa has faced real challenges. Culver has taken these challenges head-on, managed the state responsibly and made smart investments that will help Iowa emerge from this storm stronger than ever.”

In the ad, Culver sounds like he’s running a politically conservative campaign, focusing on cutting spending and cutting his own salary, as well as emphasizing his decision against raising taxes.

Culver launched his first TV ad in mid October, focusing solely on his economic record.

It’s a theme he’s returned to repeatedly over the last few weeks, first in a series of town halls, then in a blog post on the conservative Hawkeye Review. And with Fong competing with a crowded field of candidates that includes a former governor, a former House speaker and a two-time gubernatorial candidate, it is quickly becoming the biggest distinction between Fong and his rivals.

“[My father] said, ‘High taxes are wrong because they inhibit personal freedom.’ Done,” Fong told the Sioux City Journal last month. “For an immigrant from China who’s bottom line is about the American Dream, taxation is really a freedom issue.”

Fong promises to eliminate the income tax and pay for the reduction in revenue with “spending reductions, the closing of special interest tax loopholes and the growth of our economy over time.”

Retired Des Moines Register Editor Richard Doak argued against the “taxes make a recession worse” meme in a Sunday column, saying the arguments made by supply-side economists have fallen flat over the years. Government’s provide a service, and cutting that service to the bone in order to avoid taxes is short sighted.

The conclusion isn’t that tax increases are good. It’s that the economy is too complex to be governed by any single factor. Taxes aren’t the be-all and end-all of the economy. Sometimes tax increases are necessary, and those that are won’t necessarily harm the economy. They didn’t in the past. …

… This isn’t an argument for raising taxes. There might be good reasons for Iowa to avoid raising taxes now, but the supposed ill effects of a tax increase on the economy isn’t one of them.

Fong’s position goes much further than any of his GOP rivals. Bob Vander Plaats simply calls for “simplifying the income tax system” and lowering the tax burden on corporate income. Chris Rants’ focus has so far been on reducing property taxes.

“The pace of job losses slowed in April, suggesting that the Iowa economy may be in the early stages of a turn,” said Elisabeth Buck, director of Iowa Workforce Development. “However, the labor market is still very weak, and any recovery is expected to be modest and prolonged.”

5.1 percent unemployment is still an increase from 4 percent a year ago, and nonfarm employment is at its lowest level since 2005, dropping another 1,600 jobs.

Nonfarm jobs have declined in seven of the last eight months, and were down 32,800 over 12 months, almost two-thirds of the decline coming in manufacturing.

“It may be a reflection of the difficult job picture we face that a drop of 1,600 jobs looks better than what we’ve seen,” said Mike Owen, assistant director of the nonpartisan Iowa Policy Project, which tracks Iowa job trends. “It presents a challenging picture for our state as new graduates accept their diplomas and chart their futures.”

By job sector, the nonfarm numbers showed the largest gains in trade, transportation and utilities and government. The largest drops were in construction, leisure and hospitality and financial activities.

When given a list of traits and asked which party fits the description best, Iowa Republicans ranked highest in “Understand how to strengthen the economy,” “Can control and manage government bureaucracies and unions,” and “Use common sense to run government more efficiently and effectively.”

However, the GOP also ranked highest in “Arrogant” and “Backwards-looking.”

Democrats ranked highest in “The Party of the Future,” “Fair to everyone,” “Champion of the needs of homeowners, small businesses and taxpayers,” “Reformers,” and “Will fight for the most vulnerable in our society.”

The poll, paid for by Iowa First Foundation, a group organized by former GOP gubernatorial nominee Doug Gross, was designed to give the party a better idea of where it should focus for the 2010 state elections. It included a statewide sample of 603 likely voters, including a relatively even split between Republicans (36 percent), Democrats (39 percent) and independents (25 percent).

Ninety-five percent of respondents were white, 71 percent were 45 or older, 44 percent attend church at least four times a month and 69 percent had at least some college education.

Among the polls finding include:

If the election for governor were held today, 37 percent would support a Democrat and 33 percent would support a Republican. Fifty-two percent of respondents approve of the job Gov. Chet Culver is doing, with 35 percent disapproving. But only 38 percent said he deserves re-election, with 46 percent saying, “Give new person a chance” and 14 percent saying it depends on who runs against him in 2010.

Half of the respondents said Iowa is on the wrong track, with 37 percent saying the state is headed in the right direction.

Nearly half, or 47 percent, said the economy was the most important state or local issue, with 3 percent saying “cultural issues,” like same-sex marriage and abortion. In fact, cultural issues ranked below taxes, health care, the state budget and education.

The survey also gave respondents descriptions of potential gubernatorial candidates and asked them to rank how appealing each sounded. The highest approval numbers, nearly 90 percent, went to “A widely-respected former statewide elected official who has managed Iowa through troubled times before.” Presumably, the description is referring to former Republican Gov. Terry Branstad, was also mentioned in another question asking respondents if they would like a gubernatorial candidate who was “a lot like Terry Branstad, somewhat like Terry Branstad, somewhat different than Terry Branstad or very different than Terry Branstad.”

Branstad, who served four terms as Iowa governor and currently is president of Des Moines University, has made no public indications that he is interested in running again for any office. Gross, one of the sponsors of the poll, served as Branstad’s chief of staff.

On a vote of 30-19, lawmakers gave approval to Senate File 477, which would allow the state to issue bonds totaling $100 million for vertical infrastructure improvements and $5 million for alternative energy projects.

The bill is expected to be debated by the Iowa House today.

The measure is one of several bonding bills passed last night. Both the House and Senate passed a $115 million to help University of Iowa rebuild flood-ravaged areas of the Iowa City campus, and the House passed an amended version of a $545 million bonding bill passed by the Senate last month.

All told, legislators are expected to approve more than $800 million in bonding bills this weekend with the hopes of adjourning early next week.

CEDAR RAPIDS — A boisterous, if not out-right angry, crowd of about 100 people gathered in downtown today to protest government spending and high taxes.

While some in the Republican Party have called for the demonstrations to include social conservative issues such as gay marriage and abortion, the Cedar Rapids event remained mostly true to fiscal issues. This was largely due to the fact that demonstrators in attendance seemed to hold little allegiance to either of the nation’s two major political parties.

Cedar Rapids resident Greg Happel dressed as Abraham Lincoln and addressed those in attendance at the Cedar Rapids Tea Party.

While some in the crowd yelled for the ouster of U.S. House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nev.), just as much animosity was expressed toward Iowa’s two U.S. senators — Democrat Tom Harkin and Republican Chuck Grassley.

“For as long as they’ve been in office, it sure doesn’t seem like Harkin and Grassley have figured it out,” said Tim Pugh, a Cedar Rapids resident who launched the organizing website for the local event.

During the continued discussion on term limits and the need for citizen recall of elected officials, one participant shouted: “We put their ass in office. We should be able to take them out.” Those in attendance roared their approval.

Greg Happel, another Cedar Rapids resident who organized an earlier demonstration and began discussions for this event, said he wasn’t at all prepared for the number of people who ventured into downtown today.

“I’m really at a loss to know what to say except thank you,” he told those gathered below the Tree of the Five Seasons, a local landmark near the Cedar River. “I don’t think we are prepared to discuss specific issues today, but this is just the start of the conversation.”

Eugene Pinney of Cedar Rapids was the lone, publicly defiant demonstrator at today's event.

Happel and Pugh encouraged participants to stay active via the Internet, and, upon prompting from a military veteran in attendance, tentatively set plans for another tea party at 5 p.m., just before a scheduled Cedar Rapids City Council meeting. Once the meeting commences, protesters plan to attend and give council members “a piece of our mind.”

“The sleeping mayor has awoken the sleeping giant,” one participant, referencing a videotape of Cedar Rapids Mayor Kay Halloran nodding off during a meeting, yelled in approval. Halloran has since disclosed that she has a medical condition that contributed to the incident.

“They are wasting our money,” yelled another audience member. “Let’s make them earn it. Let’s tell them that enough is enough.”

Although some attending the event were clearly not taking part in the activity, only one man stood — in his own words — “in protest of the protest.” Cedar Rapids resident Eugene Pinney stood on the 1st Avenue bridge with a handmade sign that read, “more taxes.” While most passing on their way to the event were satisfied with asking Pinney to pay their tax bill or to send the government additional money, at least one demonstrator threatened to toss Pinney off the bridge.

Tim Pugh (right) and Greg Happel encouraged those in attendance to continue the conversation and identify specific issues for future demonstrations.

Following a few short speeches, demonstrators symbolically emptied containers of water off the bridge and into the Cedar River.

House File 807, which would end Iowans’ ability to subtract federal taxes from their income when figuring their state taxes, was intended to make a fairer tax structure for Iowa and lower the tax brackets to make the state more attractive to businesses and families, Bell said.

“Unfortunately, it is nearly impossible to adjust the tax brackets without adversely affecting many of the people of Iowa,” he said. “I do not feel enough time has been devoted to studying the ramifications of the bill. Thus, I will not be supporting HF 807.”

Wednesday, Democratic Reps. Geri Huser, Doris Kelley, Brian Quirk and Dolores Mertz told IowaPolitics.com that they intended to vote against the measure. Bell, who was the target of a phone campaign in his district from both supporters and opponents of the legislation, brings the total of Democratic “no” votes to five, one shy of defeating the measure if Republicans unanimously oppose it.

“There are many problems and issues surrounding our current tax structure and system,” Bell said. “We still need to find a way to create a fairer tax structure for Iowans and those who want to move to Iowa.”

Two other Democratic lawmakers who are usually considered swing votes, Reps. McKinley Bailey and Larry Marek, indicated at separate legislative forums over the weekend that they are leaning towards supporting the measure. The Fort Dodge Messenger reports that Bailey said he supports ending federal deductibility, and the Daily Iowan quotes Marek as saying that because of the bill “there are going to be tax cuts for a lot of people.”

Sioux City businessman and GOP gubernatorial hopeful Bob Vander Plaats.

The Sioux City Republican told the Iowa Independent that it was overspending during Gov. Chet Culver’s first two years in office that led the state into the budget crisis, and that budget reductions will right the ship.

“Everybody is running around like the sky is falling, which points to a true lack of leadership and focus on our priorities,” Vander Plaats said.

Vander Plaats, who previously ran for governor in 2002 and 2006, said the state budget presented in January by Culver is $900 million larger than it was in 2007. So instead of increasing taxes or borrowing to fix a projected budget shortfall, the state could feasibly cut everything that is not a priority.

“Schools are a priority. Roads are a priority. Courts are a priority. Public safety is a priority. Those who need special assistance would be a priority,” he said. “What I would like to see Gov. Culver do is say that these are our priorities. This is how we are going to fund them and this is how we’re going to live within our means. There is no reason the sky should be falling.”

Culver’s $700 million bonding plan, which the governor said is the best way to repair infrastructure in desperate need of attention due to neglect and last summer’s flooding, is just an invitation for more gambling to be introduced to the state, Vander Plaats said. The governor has said he will secure the bonds with $56 million a year in gambling revenue.

“So when you have a $700 million bond issue that is being paid for on the back of the gambling industry, Iowans read into it that you’re expanding gambling because the money the industry is producing is already committed to other things,” he said. “So either tell me what you’re going to cut or tell me what casino you’re going to add in Iowa.”

One area where Vander Plaats and his Democratic rival do agree is on the gas tax. Legislators have proposed increasing the tax Iowans pay per gallon of gasoline 8 cents over the next two years. Culver has said it isn’t prudent to raise any taxes during an economic downturn, a sentiment Vander Plaats shares.

It was on the subject of the gas tax increase where Vander Plaats fired what some could consider the first shot of the campaign for his party’s nomination for governor. Several conservative groups, like the Iowa Farm Bureau and local chambers of commerce, have supported the idea of increasing the gas tax to fund infrastructure repair. Joining them is state Agriculture Secretary Bill Northey, who said last month he is considering running for governor himself.

Northey told the Iowa Independent earlier this month that the condition of Iowa’s roads and the impact that could have on the agriculture economy have people who would normally oppose any tax increase, himself included, willing to give the gas tax a chance.

“I think generally with [agriculture] folks, a pay-as-you-go gas tax makes the most sense to address those road concerns,” Northey said. “I think everyone has been looking around for other options and there is no magic pot of money sitting around to do those things.”

Vander Plaats said he is not surprised some Republicans and conservative groups support the gas tax, “but it should be an indicator of a real problem.

“What I mean is these groups and individuals are so caught up in the ‘system think’ that they need to get outside the box and think of a different way,” he said, later adding: “Iowans have had it with the increased taxes. They’ve had it with the increase in government. They’ve had it with having their lives controlled. They want someone who will lead the state of Iowa, not just grow the size of government.”

Vander Plaats hopes that the network of supporters he has built in his two previous gubernatorial campaigns, along with his work as state chair for Arkansas Gov. Mike Huckabee’s successful Iowa caucus campaign, will finally push him past the primaries and into the general election.

“What I’m trying to point out is the organization I built in 2002 and have continued to build ever since is as solid and savvy an organization as you’re going to find anywhere for a Republican in Iowa, and that organization is ready to perform in 2010,” he said.

Photo by Lisa Yarost, Flickr

The report, written by Matthew Bandyk, ranks Iowa as the second worst state in the nation for launch of a business.

“[Iowa] seems to have the worst impulses of its conservative and liberal tendencies — relatively low investment in the things that make entrepreneurs succeed, and high government interference,” Bandyk opined in his rankings. “For the latter, Iowa has very high capital gains taxes and corporate income taxes, and is also one of the worst states for unemployment taxes on wages. In terms of investment, Iowa is 46th out of the states for adoption of broadband telecommunications services, and the speed of those services.”

Tramontina took issue with those conclusions in a memo sent Tuesday to state legislators.

“The publication decided to take a narrow focus when accessing Iowa’s business climate when, in fact, Iowa is aggressive in supporting entrepreneurship,” he wrote.

Tramontina pointed to the magazine’s description of Iowa tax requirements as one example of how the report was narrow and relied on “case-specific” circumstances in making its rankings.

“If a start-up company is selling solely to Iowa, the income taxes don’t benefit the company, but if they are selling outside of Iowa, in general, there are no income taxes for sales outside of the state,” he said.

There is, however, no dodging the accusation that the state’s broadband services are sub-par when  compared to those of other states.  Last year, the Iowa Utilities Board (IUB) released a report showing that there is increased demand for high-speed Internet access in both rural and urban portions of the state at the same time that  projections for deployment in under-served areas in the next year have decreased.

According to the IUB report, of the 1,231 communities included in the assessment reponses, 1,156 — or 93.9 percent — have access to at least one type of high-speed Internet technology. Of those communities, 925 are rural and 231 are urban. Current deployment schedules at that time indicated that only two more communities would have access to at least one type of broadband by June 2008.

“The rural and non-rural communities without high-speed Internet access are most often unincorporated areas that are not the primary community within the exchange or zip code,” report authors explained.

Since the year 2000, however, Iowa has made great strides in bringing high-speed access to rural communities. At that time only 28 percent of rural Iowa had access. As of 2007, the IUB reports that 96 percent of rural communities have access — a percentage that now exceeds the 86 percent saturation in urban areas of the state.

Tramontina was also quick to point to other reports that rank Iowa as one of the best places to do business:

• All nine of Iowa’s largest cities were listed as Best Places for Business by Forbes in 2008.
• CNBC ranked Iowa second in Cost of Doing Business and 11th in Business Friendliness in 2008.
• Milken Institute’s Best Performing Cities: Where American Jobs Are Created, which assesses economic growth and job creation at the city level, ranked Des Moines at 25th and included both Council Bluffs and Cedar Rapids in the top 100. In an assessment of smaller cities, it gave Iowa City 25th place, Dubuque 54th and Waterloo 69th.
• Site Selection Magazine ranked Iowa 6th in the country in 2008 based on total new and expanded facilities, capital investment, new job creation, percentage growth, three-year growth change and placement in the publication’s other annual municipality and business rankings.

Tramontina also touted his own department.

“The U.S. News & World Report articles does not reference state assistance in their assessment, and the state of Iowa has been working hard to foster the development and growth of entrepreneurs,” Tramontina said. “Looking beyond traditional economic development practices, IDED created the Innovation and Commercialization Division in 2007 to foster entrepreneurship and develop the talent pool required of the 21st century Iowa workforce.”

According to Tramontina, applications from 80 companies were submitted to this new program since November 2007, and 40 received funding of up to $150,000 to develop capacity in advanced manufacturing, biosciences and information technology industries.

Bandyk did not respond to the Iowa Independent’s request for a comment.