Ignoring advice?

Posted May 21, 2012 by iowapolicypoints
Categories: Energy & Environment

flooding in Iowa City 2008A few years back Iowa legislators kept Iowa’s experts in climate, hydrology, public health and other areas busy for months and years putting together reports and recommendations. What has become of those reports and recommendations? Very little.

In a report released today, “Advice Ignored: Climate Change and Iowa Water Quality Policy,” we discuss the connections between climate change and water – both quantity, in the form of flooding, and quality. Events like the 2008 floods, which the Cedar Rapids Gazette and probably others have termed “Iowa’s Katrina,” are becoming more common. Floods struck parts of Iowa again in 2010 and again in 2011, putting people, farmland, and cities at risk.

Groups commissioned by the Iowa Legislature such as the Climate Change Advisory Council, the Climate Change Impacts Committee and the Water Resources Coordinating Council all address some of the steps that can and should be taken to reduce the risks of climate change. Today their work takes up space on bookshelves and on hard drives across the state rather than being put into action to protect Iowans.

Flooding is damaging by itself, but climate change is also likely to create a “perfect storm” whereby Iowa’s already not-so-great water quality will be put at greater risk by more soil erosion and nutrient loss. This loss will result from heavier rainfall, additional pressure to tear up grasslands or wetlands and put marginal lands into production, increasing stress from pests and other factors.

Some legislators are to be commended for being proactive about addressing climate change and improving watershed management. The majority of them, however, seem content to ignore expert advice and wait around for Iowa’s next flood disaster.

Their work is not done. How many more disasters do we need before they get off their hands and stop ignoring advice?

Posted by Will Hoyer, IPP Research Associate

 

Find the new report by Brian McDonough, Will Hoyer and David Osterberg on the IPP website at this link.

Comments: Be the first to comment

Health Reform and the Constitution

Posted May 10, 2012 by iowapolicypoints
Categories: Economic Opportunity

Concluding its U.S. Constitution series, The League of Women Voters of Johnson County, Iowa, will host a panel discussion and forum on health reform Thursday, May 10, at the Iowa City Public Library at 7 p.m. The forum will also be broadcast on Iowa City Channel 4.

Panelists include Dr. Peter Damiano, professor of dentistry and director of the Public Policy Center at the University of Iowa, Sheldon Kurtz, professor at the University of Iowa College of Law, and Andrew Cannon, research associate at the Iowa Policy Project.

The panelists will discuss the structure and function of the Affordable Care Act, the Supreme Court case and how its rulings will affect the law’s impelementation, and possible alternative courses of action.

There is no charge for admission.

Posted by Andrew Cannon, Research Associate

Comments: Be the first to comment

Obama’s message to U of I students also relevant to Iowa lawmakers

Posted April 24, 2012 by iowapolicypoints
Categories: Budget and Tax, Economic Opportunity

In his visit to the University of Iowa tomorrow, President Obama is expected to speak about student debt and the cost of earning a college degree – topics that are likely to resonate with many University of Iowa students and their counterparts at other Iowa institutions of higher learning.

According to the Project on Student Debt, the amount of debt carried by graduates of Iowa’s three public universities is the third-highest in the nation. The same study found that three-quarters of University of Northern Iowa students, over two-thirds of Iowa State students, and half of University of Iowa students borrowed to finance their education in 2009-10.

Given the rapid increase in tuition over the past decade, it is perhaps unsurprising that more and more students are borrowing more and more money to finance their education.

Unsurprising, but not unavoidable.

Iowa's universities rely on tuition to finance their mission, a consequence of steep declines in state funding.

Tuition increases are a direct result of decreased state funding for higher education. As we pointed out last month in an Iowa Fiscal Partnership policy brief, the rapid increase in tuition at Iowa’s public universities has coincided with a sharp decrease in state funding for Iowa’s public universities.

Even with a recovering economy and increased state revenues, some Iowa lawmakers are resisting the call for to increase university funding from students, university officials, and Governor Branstad.

President Obama will likely discuss federal policy options to ease the debt load many college graduates now carry. The role that Iowa plays in keeping student debt low and making college broadly affordable must not be forgotten either.

Education is a long-term economic development initiative that has been proven, time and again, to work. A broad, well-educated and well-trained workforce translates into a stronger economy for all Iowans. Iowa lawmakers would do well to remember this as they finalize education funding for Fiscal Year 2013.

Posted by Andrew Cannon, Research Associate

Comments: Be the first to comment

Tax-cutters’ unbalanced focus undermines self-government

Posted March 20, 2012 by iowapolicypoints
Categories: Budget and Tax, Economic Opportunity, Energy & Environment, Organization
Tags: , , , , , , ,
David Osterberg

David Osterberg

Cut taxes, starve schools. Cut taxes, starve environmental protection. Cut taxes, … well, I think you’re getting the idea.

“The-tax-cuts-are-my-only-priority” legislators now have enough power to keep eroding our ability to meet our needs.

As I pointed out Sunday in a guest opinion in The Gazette in Cedar Rapids, this drive to underfund education is the root of recent decisions to close Polk Elementary School in Cedar Rapids and the Price Lab School at the University of Northern Iowa.

What we have in Des Moines is a leadership problem and a governing problem. Leaders find a way of matching revenues to our needs. The rejection of this kind of responsibility by a large enough number of our elected officials is the problem.

And the facts — as we have demonstrated in Iowa Policy Project reports — are clear. Most recently, we showed Iowa’s decline in support for the regents’ universities over the last 10 years. For the University of Iowa alone, it meant 40 percent less in actual spending power than the state provided in 2000, and a shift of costs to tuition-paying students and their parents.

A week before, we showed similar results with water-quality funding.

Even now, there is no greater cry than to cut commercial property taxes — even when most of the cuts would go to firms like WalMart and McDonald’s. It doesn’t matter. It’s a tax cut, period.

Ironically, even those who some elected officials are attempting to appeal to need the services they are cutting. Rockwell Collins needs trained engineers, and can better retain employees when rivers are clean and people have places to recreate.

Voters who want their kids educated and their rivers clean need to recognize that it doesn’t happen without state funding. More tax cuts don’t get us there.

Posted by David Osterberg, Executive Director

Comments: Be the first to comment

Iowa JobWatch: Jobless Rate Dips — Payroll Jobs Improve

Posted March 13, 2012 by iowapolicypoints
Categories: Economic Opportunity, Organization
Tags: , , , , ,
David Osterberg

David Osterberg

Unemployment Rate 5.4 Percent in January; Job Growth Still Slow in State

IOWA CITY, Iowa (March 13, 2012) — Analysts at the nonpartisan Iowa Policy Project noted the unemployment rate dipped to 5.4 percent in January, down from 5.6 percent in December, as payroll jobs also improved by 3,700. IPP, which tracks employment trends in Iowa, released this statement from Executive Director David Osterberg:

Employment over the last year in Iowa is showing good signs, though growth remains very slow. Payroll data showed a net gain of over 9,000 jobs during the year, with about 40 percent of those jobs added in January.

Especially good news was the fact that the state gained nearly 12,000 manufacturing jobs from January 2011 to January 2012. These jobs generally are higher paid and often have benefits. However, the state also lost 4,000 government jobs and 3,200 professional and business services jobs, also generally better paid than jobs in some sectors.

Now that the economy seems to be picking up with the unemployment rate dropping to 5.4 percent, it is time to question the quality of the jobs we are getting back. And it is time to stop shedding jobs in the public sector. That is one area that the governor and legislature have some control over.

The state still remains almost 41,000 jobs behind where it was at the start of the last recession in December 2007. Still, things are looking better.

Key Numbers

— Nonfarm jobs were up in January by 3,700, to 1,484,300, from the revised December estimate.
— Nonfarm jobs are 43,900 behind the May 2008 peak of 1,528,200, and 40,900 behind the level at the start of the last recession in December 2007.                           
— The unemployment rate was 5.4 percent in January, down from 5.6 percent in December and down from 6.1 percent a year earlier.
— The labor force, those working or looking for work, was virtually unchanged (up 100), but slightly down (1,900) over the year.
— Initial unemployment claims were down — by 37 percent, to 19,846 — for the month, and down 6.3 percent over the year.                                    

Key Trends

— Iowa averaged a monthly increase of only 800 jobs, in the last 12 months.
— Nonfarm jobs are above year-ago level for the 16th month in row.
— Manufacturing is the top-gaining job sector over the past 12 months, up 11,800, followed by construction at 3,100 and trade, transportation and utilities at 2,900. Manufacturing led gains for the month at 3,500, with leisure and hospitality up 3,200 and “other” services up 1,600.
— Government jobs declined by 4,000 over the year, and professional and business services fell by 3,200. For the month, education and health services led declines at 2,500, and professional and business services dropped 1,200.


 #   #   #   #   #

Comments: Be the first to comment

Will Iowa ever put taxpayers’ dollars where their voices are?

Posted March 6, 2012 by iowapolicypoints
Categories: Budget and Tax, Energy & Environment, Organization
Tags: , , , , , , ,
Mike Owen

Mike Owen

The Des Moines Register editorial staff has produced some excellent perspectives about budgets in recent days, about budget cutting run amok, and budget cuts affecting the courts and human services (including accountability and oversight). Noted The Register:

It’s unlikely you will hear a politician say state government is too small. But at some point, it is.

You could certainly make the same case about environmental quality programs, particularly in water quality, as we showed in a report last week. In Drops in the Bucket: The Erosion of Iowa Water Quality Funding, IPP’s Will Hoyer, Brian McDonough and David Osterberg noted:

In a state with almost 90 percent of its land worked for agriculture, it should be of stark concern to Iowa policy makers that the water running through both our agricultural lands and urban landscapes contains excess nutrients, toxic chemicals, and sediments. These pollutants end up in Iowa’s rivers and streams. The impacts upon public health, fishing and other recreational activities, and cleanup and water treatment costs show up not just in Iowa, but all the way to the Gulf of Mexico. There, the nutrients from cornbelt farm fields are creating the area of hypoxic (low oxygen) conditions known as the “Dead Zone,” where sea life cannot live. …
 
Iowa voters demonstrated strongly that they favor additional efforts to protect Iowa waterways when 63 percent voted in 2010 to approve the Water and Land Legacy amendment, so one might expect the state to increase its commitment to protecting its water. While funding by itself is not an indicator of performance, it is a necessary ingredient in the fight to protect and improve Iowa’s water resources. This report looks at funding for several key state water programs over the last decade and finds that, from a fiscal perspective, the state’s commitment to water protection programs is woefully lacking. (emphasis added)

Among the IPP analysts’ findings is that for most of the period from FY2002-12, inflation-adjusted totals for 10 critical water programs hovered at just over $20 million, and that there were significant drops from those funding levels in FY03 and FY11, with little rebound from the latter in FY12. See the figure below (Figure 3 in our report).

Recent Drop in Water Quality Funding in Critical Programs
Figures in thousands
Table1

At the same time of these funding trends, we have learned that more and more waters in Iowa were impaired. One might expect greater awareness to produce greater attention to remediation, but clearly we are not seeing it. In fact, the Legislature would have to restore $5 million in state water-quality funding just to move to what it had been during the previous decade — as if those earlier levels were enough, something that is not self-evident.

The only thing that is self-evident is that Iowa lawmakers are not putting taxpayers’ money where their voices are: toward more and better water-quality initiatives.

Posted by Mike Owen, Assistant Director

Comments: 1 Comment

Drops in the bucket: an erosion of water quality funding

Posted March 2, 2012 by iowapolicypoints
Categories: Budget and Tax, Energy & Environment, Organization
Tags: , , , , , , , , , , ,
Will Hoyer

Will Hoyer

Lawmakers in Des Moines working on the state budget should remember that 63 percent of Iowans approved of a constitutional amendment creating a new fund for natural resources and water quality in the state.  And now there is new evidence that that funding is needed.

In our March 1st report, Drops in the Bucket: The Erosion of Iowa Water Quality Funding, we show that overall water quality funding in the state has dwindled over the past decade and it would take at least $5 million in next year’s budget just to get us back to an average funding level for the past decade.  This begs the question of whether those average levels were adequate or not.

The 10 water quality programs we looked at most saw significant declines of around 30 percent when adjusted for inflation.  These programs provide a good snapshot of overall water quality funding in the state.

Table 3 from IPP report

When adjusted for inflation most of these programs saw significant decreases; the average inflation-adjusted decrease for these seven budget items is over 30 percent.

Numbers can sometimes be deceiving and in some cases look better than they really are.  The water monitoring program of the DNR, for instance, has maintained nominal funding of about $2.9 million for nine straight years. Because of shifting money within the department, however, the monitoring program is not able to monitor things like groundwater quality, or test for pesticides and pharmaceuticals like it used to.

Money is not the only factor in improving Iowa water quality, but it is a necessary part of any effort.  Iowa’s water quality can be improved.  For evidence, just look at trout streams in northeast Iowa, which have made dramatic improvements since the mid-1980s, with six or seven times more streams having naturally reproducing trout now.

Improvements like that won’t  happen without funding and the state’s current investment in water quality is not going to be adequate to make a significant improvement across the state. If these trends continue where will be in another 10 years?  At what point do we say, “Enough is enough,” and start making the investment in our natural resources?

Posted by Will Hoyer, Research Associate

———

Read new IPP report by Will Hoyer, Brian McDonough and David Osterberg

See Radio Iowa and Cedar Rapids Gazette stories about the report

Comments: Be the first to comment

Unreasonable fear about ‘one-time’ money

Posted February 21, 2012 by iowapolicypoints
Categories: Budget and Tax, Economic Opportunity, Organization
Tags: , , , , , , , , , ,
Mike Owen

Mike Owen

You hear about it whenever some Iowa politicians get near a microphone to talk about the budget.

Heard above much wailing and gnashing of teeth is a common complaint that Iowa used “one-time money” to deal with recession-driven budget challenges.

Well, thank goodness for (1) that one-time money and (2) the willingness of state leaders at the time, including then-Governor Chet Culver, to spend it.

The Des Moines Register gets it, and isn’t afraid to say so in today’s editorial:

Yes, Iowa did it by shifting money set aside in savings accounts for other purposes, and it used one-time federal stimulus money. That was the right thing to do. The alternative would have been to lay off police officers, teachers and state workers, making the recession even worse in Iowa.

The state is in better shape financially now. It has the money to pay for essential services it has committed to provide to Iowans. The Legislature and the governor should pay to carry out those commitments.

The Iowa Fiscal Partnership (IFP) has pointed out that the American Recovery and Reinvestment Act, (ARRA), the economic stimulus program passed in 2009, was designed to provide targeted, timely and temporary assistance to Americans in the recession. As IPP’s Andrew Cannon noted in a recent IFP report, “Catching Up: Context for 2012 Budget Decisions in Iowa”:

Andrew Cannon

Andrew Cannon

While there is certainly merit in reducing the use of one-time money for the continuing expenses of the state, one-time-fund critics sometimes let strict adherence to that concept get the best of them. For instance, Recovery Act dollars were used precisely as intended: targeted, timely and temporary relief so that states could continue funding critical services, such as K-12 education and health services to individuals and families. State revenues declined precipitously during the worst of the recession; the Recovery Act bridged that drop-off in revenues until a time when revenues improved as the economy regained strength. The same can be said for use of $38.7 million from one of the rainy-day funds since high unemployment and reduced revenues during the year must constitute the rainy revenue day that the fund was designed to cover.

Had the Legislature and Governor Culver chosen not to use the ARRA funds, it is reasonable to assume that the holes created in recession would be left unfilled in better times. This is because one of the priority pieces of legislation passed in 2011 was the creation of a “Taxpayers Trust Fund” to pay for new tax breaks, the fund to be built from revenues coming in at a faster pace than expected. The priority was not to sustain or restore services, let alone enhance them, but to restrain use of new revenues.

Using the ARRA money when it came, for its intended purpose to bridge a revenue gap caused by recession, kept critical services in place when they were most needed, and kept us off the pace of a race to the bottom. Thank you to The Des Moines Register for reminding its readers of that smart public policy.

Posted by Mike Owen, Assistant Director

Comments: Be the first to comment

Minimum wage just doesn’t keep up

Posted February 16, 2012 by iowapolicypoints
Categories: Budget and Tax, Economic Opportunity, Organization
Tags: , , ,
Noga O'Connor

Noga O'Connor

Once again there is attention in Iowa to the question of raising the minimum wage. This happens every few years after the passage of a new minimum, when it inevitably becomes outdated due to inflation, which hits that part of the working population the hardest.

So, right on schedule, we are beginning to hear many of the same arguments against the minimum wage that are thrown in its path by entrenched business lobbyists who recite talking points that they want to pass off as research.

As the Iowa Policy Project suggested back in 2007, when the General Assembly passed a strong minimum wage that put Iowa among the leaders in the nation on the issue, one important step to avoid these regular arguments is to find a good minimum wage, pass it, and index it to inflation.

IPP’s State of Working Iowa 2011 set the stage for the latest discussions with one of its recommendations last fall:

Reward Work I: Raise and index the minimum wage

Iowa raised its minimum wage to $7.25 in 2007, a rate which was matched by the new federal minimum in 2009. We are now one of 23 states that echo the federal minimum wage (19 states have higher rates). Even with those increases, the real (inflation-adjusted) minimum wage is still near its postwar low (in real dollars, the federal minimum was above $8.00/hr from 1960-1980, peaking at $10.38 in 1968). And since those legislated increases, the Iowa minimum has lost about 10 percent of its value and the federal, coming later, has slipped 5 percent. If, at the time we last raised the minimum wage in 2007, we had simply indexed its value to inflation, the Iowa minimum would be $7.90/hr — an increase that would put another $1,300 in the pocket of a full-time minimum wage worker. [1] Indexing the minimum would protect its future value from the eroding effects of inflation, allow future legislative sessions to focus attention in other areas instead of on these redundant debates, and provide employers with a measure of predictability when forecasting future costs. [2]

Proposals to raise the minimum wage often provoke worries about job loss. Recent research has not only punctured this myth, but underscored the substantial and sustained economic benefits of a higher wage floor. Recent studies of cities adopting higher minimum wage rates, and of job performance in contiguous counties with differing minimum wage rates, have found that higher minimum wages do not reduce employment.[3] A higher minimum wage, like all policies that put more money in the pockets of
working families, is also widely recognized as an effective form of economic stimulus. [4] Indeed, many employers have come to appreciate that a higher minimum wage offers them a net benefit, “by increasing consumer purchasing power, reducing costly employee turnover, raising productivity, and improving product quality, customer satisfaction and company reputation.”[5] (emphasis added)

[1] Authors’ calculations using Bureau of Labor Statistics inflation calculator
[2] Raising Minimum Wage Helps Iowa’s Poor Families. Iowa Policy Project, January 2007.
[3] Dube, A., Lester, T. W., and Reich, M. (2010). Minimum Wage Effects across State Borders: Estimates Using Contiguous Counties. The Review of Economics and Statistics, 92(4): 945–964. ; Schmitt, J. and Rosnick, D. (2011). The Wage and Employment Impact of Minimum-Wage Laws in Three Cities. Center for Economic and Policy Research.
[4] Aaronson, D., Agarwal, S., and French, E. (2011). The Spending and Debt Responses to Minimum Wage Increases. Federal Reserve Bank of Chicago, WP 2007-23. Falling Wages Curb Consumer Spending, Economic Recovery. National Employment Law Project news release, July 2011.
[5] Business Owners and Executives for a Higher Minimum Wage: Raise Minimum Wage From $5.15 to $7.25. An online petition of Business for a Fair Minimum Wage. 

Posted by Noga O’Connor, Research Associate

Comments: Be the first to comment

Cities have development tools beyond TIF

Posted February 15, 2012 by iowapolicypoints
Categories: Budget and Tax, Organization
Tags: , , , , , , , , ,
Mike Owen

Mike Owen

The Business Record’s Kent Darr has an interesting story about Des Moines City Manager Rick Clark’s reaction to the commercial property tax issue, debated Tuesday in the Iowa House.

Clark expressed caution about unintended consequences that can result from tinkering with the property tax laws, which is a legitimate concern. But one of his own remarks demands caution as well. That is his concern about potential changes to tax-increment financing, or TIF, which are being considered separately this year. From Darr’s story:

“For cities in Iowa, it’s the only game in town,” Clark said. “It’s the only thing we have to encourage and promote economic activity; the other tools really don’t work. If we take away TIF or make it less effective than it is today, we’re really in a world of hurt.”

This argument is often raised and it’s just not necessarily so. First, cities do have other tools available, such as abatements. TIF is a tool that simply provides an extra revenue stream to fund those tools; in some cases, it may make sense to pool funds of various local government entities for a given project, but in others, possibly not.

Peter Fisher

Peter Fisher

IPP Research Director Peter Fisher addressed this in his recent report for the Iowa Fiscal Partnership examining TIF use in Johnson County:

It is important to understand that TIF is not synonymous with economic development incentives. TIF is merely a financing mechanism. Cities can and do promote economic redevelopment and job creation in a variety of ways; cities can build facilities to accommodate private projects, they can provide tax abatements for both residential and non‐residential property, and they can issue bonds to finance infrastructure, all without TIF. But TIF has become the mechanism of choice to finance economic development incentives in part because TIF creates the illusion that such incentives are costless, and in part because TIF in actuality shifts costs to other taxpayers.

Second, it should not be assumed that subsidies are effective. Does the subsidy cause the economic activity, or does the activity cause the subsidy? Sometimes it’s hard to say.

Again, Fisher:

Furthermore, much (perhaps the majority) of TIF revenue is not used to incentivize development at all, but rather to finance routine city infrastructure spending that otherwise could be financed with city bonds, retired entirely by city taxpayers, or charged to developers.

Sensible reforms would not render TIF “less effective” for its intended purposes to the extent subsidies are effective now. Fisher’s recent op-ed in The Des Moines Register outlined five common-sense reforms that would improve TIF. They would stop what would have to be acknowledged as abuses — for example, stopping cities from using TIF to fund a project in one school district from the tax base of another.

The indefensible thing in the 2012 legislative session would be to make significant commercial property tax changes — big cuts for businesses at the expense of homeowners or critical public services — without fixing abuses of TIF. Politicians frequently ignore TIF and other preferences when they start ranting about property taxes on business.

Posted by Mike Owen, Assistant Director

Comments: Be the first to comment

« Older Entries
Follow

Get every new post delivered to your Inbox.