Budget cuts will hurt education, economic growth

A proposal by legislative Republicans to make deep, mid-year budget cuts threatens education, job training and ultimately Iowa’s economy.

Senate File 130 cuts more than $26 million from education, undermining the goal of creating an economy that helps all Iowans. Cutting $3 million from community colleges and $18 million from public universities takes Iowa in the wrong direction. DMACC alone will lose more than $500,000.

When 68 percent of all Iowa jobs will soon require education and training beyond high school, I will not support cuts to our community colleges and state universities. It’s the worst thing we could do to deal with the number one problem facing Iowa’s businesses: the critical shortage of skilled and qualified workers.

The cuts could have been avoided if Gov. Branstad and Lt. Gov. Reynolds had delivered on their promises to increase family incomes by 25 percent and create more than 200,000 new jobs in Iowa.

We wouldn’t face a $117 million budget deficit if Republicans had focused more time and energy over the past six years on strengthening our schools, building the skilled workforce that Iowa employers need and improving quality of life for all Iowans. Instead, they’ve made tax giveaways to big, out-of-state corporations the fastest growing part of the state budget.

Tax breaks for corporations now top $500 million annually. This put-all-the-eggs-in-one basket approach has slowed the state’s economy and left the budget in the red. The unfortunate result is Iowa students and working families are being forced to pay for failed policies.

If you're worried about the impact of these cuts, contact your legislators. Find your state legislators at www.legis.iowa.gov/legislators/find. Then call or email them and tell them to oppose these budget cuts.

I was shocked to learn this week that some legislators are not supporting legislation to “couple” Iowa’s tax code with recent federal tax changes for 2016, the taxes Iowans must pay this April.

But that’s what Sen. Randy Feenstra of Hull, an Assistant Republican Leader and Chair of the Senate’s tax-writing committee, declared during a speech in the Senate on Jan. 25.

Although I am disappointed by Sen. Feenstra’s remarks, I promise I am not giving up. That’s because so many Iowans have contacted me about their support for tax coupling. Thousands of Iowans want to use provisions they used in previous years to lower their state taxes.

For example, this legislation would have benefitted nearly 24,000 farmers and small business owners through a provision known as Section 179 expensing. Federal law allows those taxpayers to take a larger deduction for equipment they’ve purchased as an investment in their operations. If Iowa doesn’t couple with the federal tax code, these folks won’t get to take this larger deduction on their state tax returns.

Tax coupling legislation approved last year helped:

• More than 39,000 Iowa teachers who purchase supplies for their own classrooms using their own money.

• More than 43,000 Iowans who own their homes, by allowing them to deduct mortgage insurance premiums from their state taxes.

• More than 18,000 Iowans who are going to college or getting training to improve their skills and better their lives.

• More than 45,000 working Iowans who are married with three or more children, by expanding the Earned Income Tax Credit.

Contact Sen. Chaz Allen
at 641-521-6297
or chaz.allen@legis.iowa.gov