Gubernatorial hopeful Boulton calls for capping some Iowa tax credits, scrapping others

CEDAR RAPIDS - Iowans shouldn't be surprised that the state likely will have to dip into its cash reserves to pay its bills because revenues have not kept up with expenditures, according to state Sen. Nate Boulton, a Democratic gubernatorial hopeful.

'There's been a blinking yellow light that's been going off for a while now, and we still aren't talking about the long-term fiscal priorities of our state,” the first-term lawmaker from Des Moines said Thursday. Instead, Gov. Kim Reynolds is following the lead of former Gov. Terry Branstad in promoting 'very shortsighted economic plans.”

Boulton was in Eastern Iowa on Thursday for an AFSCME picnic at the Mental Health Institute at Independence and to meet with the Linn County Bar Association. He has visited 25 counties since announcing his candidacy a month ago and believes he is off to a fast start that is allowing him to 'take that frustration that Democrats have felt from the legislative session and try to build it into some positive energy.”

His message this week is that Reynolds and the Republican-led Legislature are ruining Iowa's economy - and the state budget - with corporate giveaways 'that haven't created jobs, but have created a black hole in our budget.”

Using the Economic Emergency Fund to balance the books on the fiscal year that ends June 30 doesn't fix the problem caused by using tax credits and exemptions for corporations.

'I call on the governor to reverse course, stop the bailout of these costly corporate coupon economics, and instead work with the Legislature on a budget and economic development plan that makes sure our state returns to a place of financial security,” he said.

The Legislature created those tax credits and exemptions, and House Republicans began a review of the state's tax credit system that includes $427 million for credits for everything from adoption to wind energy.

Boulton said he's not proposing that every corporate tax exemption be scrapped, but that all need to be evaluated to determine if they are producing the intended results.

A solar tax credit, for example, could stimulate investment in a 'unique industry that has potential for us to specialize in our workforce and have long-term economic growth,” he said.

But $100 million in state tax credits and incentives for a fertilizer plant in Wever 'for something that isn't a new technology, that isn't bringing a new skilled workforce into Iowa,” probably isn't worth the investment, Boulton said.

He wants sunset provisions to allow lawmakers to review tax credits before extending them to make sure 'we're not padding profits.”

He also sees the need for tax changes. The bipartisan 2013 commercial property tax relief plan, which was called the largest tax cut in state history, hasn't led to the job creation that was projected, Boulton said. It has, however, severely limited the state budget, because the state is spending hundreds of millions of dollars to backfill local government property taxes losses.

Bouton is one of at least eight Democrats considering the race for the Democratic nomination. The others include Cathy Glasson of Coralville, former Rep. Todd Prichard of Charles City, former Iowa Democratic Party Chairwoman Andy McGuire, former Des Moines school board member Jon Neiderbach, Davenport Alderman Mike Matson, Des Moines businessman Fred Hubbell and former state party chairman and John Norris, a longtime aide to former Gov. Tom Vilsack.

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