Imagine a funded Leopold Center

Farmers, students and former students at Iowa State University, researchers and advocates for a sustainable agriculture in this state are gathering at 10 a.m. on Tuesday, Feb. 6, in the Wallace Building auditorium northwest of the Iowa State Capitol.

The Iowa Sustainable Agriculture coalition are gathering to call for a re-funded, re-staffed, and re-imagined Leopold Center.

Last year the Iowa Legislature stripped all funding from this ISU center. They also tried to expunge the whole idea of sustainable agriculture by taking the Center out of the Iowa Code. Governor Branstad, who 30 years before signed legislation that created the center, vetoed the part of legislation ending it. He did not restore the funding, however.

The Leopold Center-sponsored research is not something corporations such as Monsanto promote, because sustainable farming often uses fewer of its chemicals. Leopold research is not what the owners of huge factory hog farms promote, either. The center pushes alternative animal farms that are smaller and use less energy. They create the type of manure that is a good soil amendment — not a slurry that often runs off into our rivers and streams.

Agribusiness is not interested in the Leopold Center. That is why the leaders in the Iowa Legislature took its funding away. Many farmers and regular Iowa citizens want that research. We will see if their voices overcome the wishes of industry.

For more information about the Feb. 6 event, visit Iowa Sustainable Agriculture.

David Osterberg

David Osterberg is co-founder and former director of the nonpartisan Iowa Policy Project and remains IPP’s lead environmental researcher. As a state legislator from Mount Vernon for six terms in the 1980s and 1990s, serving part of that time as chair of the House Agriculture Committee. He was involved with legislation creating the Leopold Center.

Get school funding numbers right

A good report by the Center on Budget and Policy Priorities * (CBPP) shows states generally have done an exceedingly poor job in restoring education funding in the wake of the Great Recession. Unfortunately in Iowa, this report is being characterized inaccurately by some at the Statehouse, including Governor Reynolds.

A two-page IFP backgrounder on this issue published Jan. 8 offers a summary of how to look at Iowa education funding in the full context of state education funding policy, which governs both state and local funding of education.

Here is a link to view the IFP piece online.

And here is a link to the PDF file.

Governor Reynolds is cherry-picking one figure in the report that looks exclusively at the state share. That figure misses how some education funding has been shifted from local to state responsibility without significantly increasing actual total funding per pupil for Iowa’s K-12 schools.

Instead of the graph (Figure 3)* she is using to paint a rosy picture of Iowa’s performance on school funding, anyone serious about using the CBPP analysis to see what has happened in Iowa should look at Figure 8 of the report, reproduced below.

11-29-17sfp-f8

As you can see from the graph — which, again, is in the same report that Governor Reynolds and others have been citing — Iowa “ranks” 13th, if the ranking matters. More importantly, Iowa has increased state and local funding per student from 2008-15 by only 4.9 percent, far less than the figure quoted by Governor Reynolds in choosing only to look at the state funding number. That works out to seven-tenths of 1 percent per year for seven years.
At IFP, we continue to suggest that the only fair way to look at education funding in Iowa over time is to consider both state and local funding, as both are governed by what the Legislature and Governor permit. The best way to make that comparison is to look at the SSA (State Supplemental Aid) number, which governs the per-pupil building block for setting a school budget. Over the last eight years, this has been below 1.8 percent on average (see the IFP backgrounder linked above).

 

2017-owen5464Mike Owen is executive director of the nonpartisan Iowa Policy Project in Iowa City. mikeowen@iowapolicyproject.org.

 

* Editor’s Note: The Center on Budget and Policy Priorities has updated its report to revise the figure cited by the Governor, to better reflect an apples-to-apples comparison across the years covered. See Figure 3 of the report, found here. This change was made to account for a shift of local funding to state funding during the period, rather than an actual increase of funding. It now shows a 4.9 percent change from 2008-15, rather than the previous 20.6 percent change. The ranking by that measure changes from fourth to ninth. Figure 8, examining total state and local funding (includes property tax) — also using Census data — also finds a 4.9 percent change over the period.

Tax bill: Not just a 2017 story

It would be so easy to close the book on the 2017 tax bill, to allow our attention to be diverted to the next issue or threat, because there are so many.

We owe it to ourselves and future generations not to fall for what happened in 2017 on the tax bill in Congress, sold on hyperbole and defended on ideological sand that will give way this spring to damaging cuts to health care and nutrition to those who need it most.

Our senators should have warned us. Instead, they sold only cherry-picked data molded into a messy ball of spin and trickle-down economics, bereft of full context or history.

Senator Joni Ernst did it here: https://outreach.senate.gov/iqextranet/view_newsletter.aspx?id=104023&c=JErnst

Senator Chuck Grassley did it here: https://www.grassley.senate.gov/news/news-releases/grassley-statement-president-trump-signing-historic-tax-reform-legislation-law

Just stick to the facts, and you can see that the expensive tax bill that will give us — conservatively — $1.5 trillion in deficit spending, also provides:
 
Basic RGB•     Breaks that provide meager help to low- and middle-income Iowans expire under this bill, including the Child Tax Credit expansion that the Senator notes in the linked piece, but does not note its emphasis to help the wealthy most, nor the expiration date in 2026.
As a result, as this table shows, the bottom 60 percent of Iowa taxpayers will, on average, see tax increases in 2027 when they are being told they will receive a “tax cut.”
 
•    A lessened value of the Earned Income Tax Credit for low-income working families because it holds down the formula to account for inflation.
•    New threats to the safety net as massive deficits caused by this legislation are used as an excuse to cut critical services that benefit the poor, the disabled, and low-income working families.
 
•     Permanent breaks that only reach the extremely wealthy and large corporations — permanent, at least until a future Congress has the courage to take on the interests that have successfully promoted them.
 
We need to do better in helping Iowans and all Americans understand the impact of major decisions that will affect the health and economic opportunity for themselves and their families.
In the coming months, the Iowa Policy Project will be examining these impacts further and in addition to reports, we will host public forums that expand on that understanding. It would be great to include either or both of our U.S. senators in any of these sessions, in a respectful and engaging environment, in a year when neither senator is on the ballot, so they can more fully discuss the impacts of  the bill that their initial statements did not cover.
 
The timing is important, with so many decisions coming for the Iowa General Assembly that may be affected by the just-passed tax bill in Congress, and responsibilities pushed to the states by Washington.
2017-owen5464Mike Owen is executive director of the nonpartisan Iowa Policy Project in Iowa City. mikeowen@iowapolicyproject.org

‘Toto, we’re not in Kansas — yet’

curtains-tighter

The unmitigated disaster of tax-cutting in Kansas — which we have noted here, and here, and here, and here — and others have noted as well, is threatened for a curtain call just up the road in Iowa.

Those links might help Representative Guy Vander Linden, who is chair of the House Ways and Means Committee and says in the Cedar Rapids Gazette today that he doesn’t know what happened in Kansas.

Governor Kim Reynolds has indicated since before she took office in May that taxes are on her agenda, and she’s been spreading bad information about our current system when she could be promoting it.

We find out now that the Governor wants to wait until January to tell people what she wants to do. Likewise, details are few from the legislative side. We saw this play out scandously last session, as backroom deals were shoved through the process and signed into law with limited debate and no deliberative, open process that involved the public.

Targets in 2017 were collective bargaining, workers’ compensation, and voting rights. Targets in 2018 are new tax cuts for high-income individuals and the wealthy, undermining public education, and — though they may be seeing they can’t get away with this onepublic-sector pensions that already are stable and taxpayer friendly.

Behind a lot of these moves: The Koch-funded Americans for Prosperity (AFP). Guess who showed up in today’s Cedar Rapids Gazette story? AFP’s Drew Klein, peddling utter nonsense to The Gazette about what happened in Kansas — nonsense not worth repeating here for fear it will spread.

Be very clear about what happened in Kansas: They cut taxes and budgets severely, and forced themselves this year with painful steps to start climbing out of the hole. Ask ’em. They’ll tell you. Oh, wait, they have:

“Business tax cuts were supposed to be magic, they were supposed to spur job growth — and they didn’t,” said Duane Goossen, a former Republican state legislator and state budget director under three governors, in a meeting at the Iowa State Capitol last February.

So, again paraphrasing from The Wizard of Oz”: “Pay lots of attention to the people behind the curtain.”

 

2017-owen5464Mike Owen is executive director of the nonpartisan Iowa Policy Project. mikeowen@iowapolicyproject.org

Watching the stars from the deck of the Titanic

170118_capitol_170603-4x4The people who will lead the charge against fairly derived and only fairly adequate revenues have been giving folks a taste of what’s coming in Iowa tax policy in 2018.

If you like the current debate in Washington over tax cuts that benefit the wealthy at the expense of services for the vulnerable or investments in opportunity for all, you’ll love the coming debate in Des Moines.

Yet, the language of opening shots already is fascinating.

A Titanic analogy is apt.

Senate Majority Leader Bill Dix says the debate will be about “relief,” not “reform.” “Reform implies that it might be a moving of chairs on the deck and that’s not what we should be pursuing.”

His reference is a familiar nod to the idea of “moving the deck chairs on the Titanic,” a fruitless activity, ironically apt for the agenda he is pursuing — an agenda that includes the radical and fiscally incompetent notion of eventually eliminating the state income tax. What dooms prosperity for the state of Iowa is continuing to fail to invest adequately in the key drivers of the economy where state policy can have an effective impact. True “reform” would correct that.

In contrast, the stated Dix plan is to reduce reliance on the income tax, which is already less than one-third of state and local revenues. The income tax is the only piece of that structure where low- and moderate-income Iowans pay a smaller share of their sometimes meager income in tax than those in the top 20 percent. The property tax and sales taxes are weighted in favor of the wealthiest.

Tax cuts guarantee lower revenues, a reality noted in the current federal tax debate. Lower revenues also mean fewer or lesser services. Think education. Think health care. Think law enforcement. Think clean water, recreation, and quality of life. These are all Iowa assets driven by public investment, on which private businesses thrive and with which businesses make their decisions on where to locate, unlike taxes.

Whatever they are, they’re not “stars.”

Rep. Jake Highfill says “all the stars have aligned” for tax cuts. Stars are bright and shiny. Dreams are made, courses to achievement are set, upon stars.

What have aligned, rather, are the pieces of brute political power. We have seen this already in 2017. The gutting of public-sector collective bargaining rights and worker’s compensation, and eliminating county minimum wages last session, demonstrated a willingness to use the levers of power on behalf of powerful lobbyists in complete disregard for facts, fair play, open debate and traditions of Iowa governance.

Promises don’t mean much.

Cities and counties were assured the state would “backfill” revenue lost to what then-Governor Branstad and legislators proclaimed as the largest tax cut in Iowa history — the 2013 property tax bill. And for a short time they have, making a huge dent in what state funds are available for the investments noted above.

Slower-than-forecast revenue growth now puts that “backfill” in jeopardy. Highfill said last week he would favor “phasing it out or getting rid of it altogether.

Cities and counties were wary of this from the start. Clearly, they had good reason.

Principled tax policy would assure, among other things, adequate revenue, with taxes paid most by those who can most afford to pay. We don’t have either as it stands. The changes appearing on the horizon would only compound the problems in Iowa’s existing structure, which is heavily weighted toward the wealthy and corporations, and against lower- and middle-income working families.

You’re not likely to have a say in what happens before a plan hatched behind closed doors is dumped on the House or Senate floor, whipped through the chambers and sent to the Governor before everyone goes home to campaign.

Lawmakers won’t want to spend a day longer than their taxpayer subsidy permits this spring.

So, brace yourself. Start by securing your deck chair.

2017-owen5464Mike Owen is executive director of the nonpartisan Iowa Policy Project. mikeowen@iowapolicyproject.org

 

Tax plan: Don’t be fooled

Living in Iowa, we know snow when we see it, and what’s coming from Washington is a snow job of devastating proportions.

Recognize the House Republican tax bill for what it is: a plan to add at least $1.5 trillion in federal deficits to make the rich richer, and hurt Iowa’s working and middle-income families.

How will we pay for those deficits? Some lawmakers have already made it clear they want to gut economic and health security of families who are already vulnerable.

On the block: Medicaid, food assistance and education from Head Start through college, just to name a few likely targets given recent attempts in Washington.

Inevitably, these kinds of service cuts ultimately will put pressure on our state government to respond, at a time when the state is already hard-pressed to meet current obligations.

Is that what Iowa lawmakers signed up for? If so, they neglected to campaign on it — on how they will choose who gets health care, which school districts will decimate their own staffs, and where parents might find preschool for their kids. There has been precious little to show us how they will assure educational opportunity for students in economically vulnerable families, or workers at mid-career who suddenly find themselves out of work.

Yet, all we’re hearing from the authors of the tax plan in Washington is that it helps middle-income families — all evidence to the contrary notwithstanding. And, largely, silence from the folks who will be the final arbiters in Des Moines when the time comes to make state-level choices.

It’s not like this snow job from the East was not in the forecast. Many have seen it coming. The nonpartisan Tax Policy Center estimated in September that $75,000 income households with kids would see only a $20 average tax cut in 2027 from the GOP tax framework at the time — compared to a $200,000 cut for millionaire households with children.

In addition, the nonpartisan Institute on Taxation and Economic Policy found over half of the benefits of that earlier plan in Iowa going to the top 1 percent, with less than 15 percent going to the bottom three-fifths of Iowans.

When the new plan burst from behind closed doors late last week, responsible analysis quickly showed impacts. The plan:

11-5-17tax-f1More details will become apparent in the coming days with further responsible analysis that we can hope will find its way into the public debate.

Those peddling the tax-cut spin are counting on people to tire of the debate and let these cuts happen. The stakes are no less critical today than they were the first time they were identified.

Bad policy is bad policy. Bad economics is bad economics. And the poor services that result, alas, are what they are.

2017-owen5464Mike Owen, executive director of the nonpartisan Iowa Policy Project

mikeowen@iowapolicyproject.org

127 Million New Reasons We Cannot Afford New Tax Breaks

Capitol-DSC_0119-7inThe Iowa Revenue Estimating Conference met Thursday and dropped its revenue estimate for the current fiscal year by $127 million.

The REC estimate projects Iowa to have lower receipts in the current year than in the budget year that ended June 30, by $2.5 million.

A common-sense approach to budgeting would leave one clear message above all others: Drop the talk about tax cuts. We cannot afford any more of them, and we need to double down on a focus on reining in the giveaways that are already on the books, running automatically outside the budget process.

Already:

  • Tax credits for business, when including the property tax credits from the 2013 commercial property tax giveaway bill, have more than doubled in just five years.
  • We leave tax loopholes unplugged at an annual cost of $60 million to $100 million — estimates by the Department of Revenue.
  • Iowa’s taxes on business already rank in the lower part of the middle of the pack nationally, as shown by Ernst & Young in the graph below. This directly contradicts the illusion painted by apologists for even lower taxes on business and more corporate welfare at the expense of lower- and middle-income working families.

171021-E&Y2016

Corporations are not people; they are tools designed for the purpose of making profit. Some of their activities can serve a greater good, but this is not automatic. They will seek and take new tax breaks if allowed, no matter the longer-term cost to services that support a level playing field for business and greater opportunity and health for all.

Budget choices, on the other hand, reflect a moral purpose — choices that advance values we share as members of our various communities, our state and our nation.

Through that lens of Iowa values, and the added context of tight revenues due largely to reckless and unaccountable giveaways, and the reality that tax breaks don’t pay off in greater revenues under even tortured economic analysis, it is impossible to suggest that new tax breaks make sense.

There are approaches to tax reform that make sense. They start with principles that put fairness, public benefit and adequate revenues ahead of political power brokers.

Our state lawmakers have less than three months to get a grip on fiscal and economic reality and make that fit with traditional Iowa values that foster promise for everyone in our state.

2017-owen5464Mike Owen, Executive Director of the Iowa Policy Project

mikeowen@iowapolicyproject.org