Tax cuts leave little money for allowable school growth

Six Percent Allowable School Growth A “Must” – But How Do We Pay For It?

Branstad’s corporate property tax cuts are starving state of resources needed to fully fund our schools

A retired teacher and a concerned parent with Iowa Citizens for Community Improvement Action Fund (Iowa CCI Action Fund) both testified in support of six percent allowable school growth over the next two years at a Senate Education subcommittee meeting Jan 27, but the CCI members also asked serious questions about how the state of Iowa can afford to fully fund education at those levels after Governor Branstad’s corporate property tax cuts are already set to burn through the state’s surplus in the next five years.

The corporate property tax cuts passed last year will cost the state $277 million next year and ultimately peak out at $380 million per year.  In the short-term, Iowa’s surplus will be able to absorb the cost, but even the governor’s office admits that the surplus will be spent within five years at “status quo” spending levels, raising the question about how the state will be able to pay its bills and increase investments in vital public services after the surplus is gone and expenditures exceed revenue collection.

A copy of comments delivered by retired teacher Barb Lang and concerned parent Ross Grooters are included below:

Prepared remarks:  Barbara Lang, retired teacher:

My name is Barbara Lang. I’m a retired teacher and taught most of my professional career at Carlisle High School.

I’m also a member of Iowa Citizens for Community Improvement Action Fund and we support a six percent increase in allowable school growth next year and the year after. 

Education of our young people is the most important role of good government – and our schools are badly under-funded.  We need to invest more in our children and our teachers.

My only question is, how can the state afford this?  Governor Branstad’s corporate property tax cuts are stealing Iowa’s surplus, and it doesn’t seem like there is any money left to make this kind of investment in education over the long haul. 

CCI members opposed these corporate tax cuts last year and now our worst fears are being realized.

Senator Quirmbach, you were one of the few Senators last year who voted against Governor Branstad’s corporate tax cut, so you know what I’m talking about.  This money is simply not there.  How are we supposed to increase funding for our schools if we are running a deficit a few years from now? 

Prepared remarks, Ross Grooters, concerned parent:

My name is Ross Grooters, a railroad engineer from Pleasant Hill.  I’m also a proud CCI Action Fund member. 

My daughter Aurora is a second-grader at Delaware Elementary School and her mother and I may be forced to send her to another school next Spring due to overcrowding. 

I want my daughter to have a world-class education, and CCI definitely supports more funding for Iowa schools, but Governor Branstad’s corporate property tax cuts have robbed our children and their teachers in order to pad the back pockets of out-of-state CEOs. 

Setting allowable growth at 6% for the next two years is a remarkable goal, but the end result is that it will only spend down our surplus even faster and I question what exactly we are supposed to do after all that money is gone and the state is awash in red ink.

The plain truth of the matter is Iowa can’t continue to improve our schools and keep giving handouts away to big corporations at the same time.  We cannot tax cut our way to prosperity.  

Although I understand Senator Quirmbach did not vote for Branstad’s corporate property tax cuts, the governor and the rest of Mr. Quirmbach’s colleagues on both sides of the aisle seem to be wanting to have it both ways.

We have to start raising new revenue and the way to do that is by ending federal deductibility for Iowa’s wealthiest citizens and also by closing corporate tax loopholes.  Right now, out of state corporations doing business here don’t pay their fair share of state income tax.  Combined corporate reporting is something other Midwest states have, and it could raise $100 million in badly needed new revenue every year. 

The Research and Development Tax credit and Orascam-style handouts are two other corporate tax subsidies that only benefit big business for things they would already be doing anyway.  We have to get rid of those.

I want to know why the profit margin of out-of-state corporations is more important than my daughter’s education.

Neither of the three Senators at the education subcommittee addressed Lang or Grooters’ questions.  

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