Common Good Iowa

Time to tackle the real problems facing Iowa

Posted on November 9, 2022 at 12:27 PM by Mike Owen

Even before the polls closed yesterday, we already knew the big challenges facing our state. They are real and they are everyone’s problem — even if they didn’t get much attention during the 2022 campaign.

Now the votes are in, and we know who will be calling the shots — and bear the responsibility for tackling the big challenges — for the next two years.

It starts with, you guessed it, money.

Now that the campaign is over, the Governor and all legislators of both parties must focus on the simple reality of Iowa finances: Services funded by the state budget are in trouble.

The quality or even survival of services — everything from education to health care to mental health to environmental quality to law enforcement to safety-net supports — is at risk.

Over the next five years, tax cuts passed in 2022 will steadily and sharply force down revenues — by $1.4 billion in FY 2026, $1.8 billion in FY 2027 and $1.9 billion in FY 2028. The cuts are large, but smaller, before that as well. But the immediate impact is less apparent with a $2 billion surplus in the bank and continuing, temporary support to the economy from federal recovery funding that is going away.

In what is now an $8.2 billion budget, those revenue cuts are enormous. The challenges will intensify over the next few years, so policy makers should be preparing for them now.

Will other revenues be raised to make up for the cuts? This has not been discussed so far. If not, then what are the plans for the pieces of the budget that currently count on state general fund support? (See the pie chart.)

Just as legislators should have identified planned service cuts when passing the tax cuts, it would be irresponsible of the new Legislature and Governor to leave these choices to people yet to be elected. Planning for the future should be part of the new budget process — not just passing a budget for the next fiscal year.

Beyond the basic funding issues, Iowa faces:

— A continuing problem of access to quality child care for many working households.

Low economic security, beginning with a low minimum wage ($7.25) that legislators last voted to raise in 2007, and compounded by the $900 million-a-year problem of wage theft, and enhancing supports for Iowans who need help.

— A need to meet voters’ wishes and implement a Natural Resources and Outdoor Recreation Trust Fund with a three-eighths-cent sales tax increase — but to follow voters’ intent on the use of funds and make other changes to offset the disproportionate impact on lower-income Iowans.

— Correcting a decade of poor investments and recommitting to public education.

— The threat of new tax cuts to health care, including mental health services, for Iowa children and families.

Water pollution caused by excess fertilizer application and poor locations of hog confinements, and not only permitted but encouraged by many years of poor public policy.

Many more issues will emerge, but this short list is a taste of what Iowa cannot afford to ignore to foster opportunity for all. For a comprehensive look at the issues facing Iowa as we approach the 2023 legislative session, see our Policy Wise in Iowa series on our website.

 

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