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Legislative leaders plan only window dressing for tax credits

December 18, 2009

It looks like the legislature will respond to the negligent management of Iowa's corporate welfare tax credits by changing them as little as possible. Mike Glover reports:

Senate Majority Leader Michael Gronstal, D-Council Bluffs, said it's not clear that lawmakers will scale back on the amount they spend on tax credits but said it's clear that changes are needed.

"I don't think there's a decision made to cut back on tax credits, but I think it's abundantly clear that Iowans want and demand and need accountability in our tax credits and we've got close to zero," Gronstal said.

This makes it look like they want to continue to spend money on the well-lobbied through the tax law, with only cosmetic changes.

Most of the tax credits the state has created have significant political support. A tax credit for restoring historic districts was key to a renovation of a large portion of downtown Dubuque, and House Speaker Pat Murphy, D-Dubuque, said his constituents feel the impact.

"Those are probably people who wouldn't be working if we didn't do this," Murphy said.

Gronstal said lawmakers likely will take a more moderate approach to the issue, building more accountability into the incentives while leaving most in place.

Of course, thousands more jobs never are created in Iowa in the fist place because of the the high rates and complexity that apply to businesses that don't have the lobbyists to donate money to campaign funds. The Tax Update's Quick and Dirty Iowa Tax Reform Plan would be better for the state's economy, especially for all of us without lobbyists, but there just aren't a lot of photo ops in low rates and simple tax returns.