Legislative tax talk raises concerns

It's been just a couple of weeks since the Iowa Legislature adjourned its 2015 session, which ran more than a month into overtime. It was a session defined by a vote to raise the gas tax for roads and a battle between Democrats and Republicans over the state's capacity to fund schools.

Republicans who control the House argued that the state could not afford to increase K-12 school funding by more than a historically paltry 1.25 percent. In the end, they reached a deal with Senate Democrats to provide more funding, but still less than schools have received over the last decade or so.

Republicans pointed often to the tightness of a budget hemmed in by previous promises to backfill local commercial property tax cuts, implement a new teacher training effort, expand Medicaid and other major initiatives. The result was a largely status quo budget that left many important priorities, such as clean water, idling in park. It remains to be seen if Gov. Terry Branstad will use his line-item scalpel to cut even more spending.

So it strikes us as curious that lawmakers now are hinting they might attempt to cut taxes next year, possibly personal and corporate income taxes. Key House Republicans said as much at a golf course meeting of the Iowa Taxpayers Association.

To be fair, it's being framed as 'tax reform.” Of course, we, and many Iowans, support lean government and ideas that would simplify the state's complicated tax code - untangling the mess of special-interest tax credits and breaks enacted over the years with little or no mechanism for judging their merits, for example.

But if reform is simply a reasonable label to slap on an unreasonable attempt to pass a large, politically-motivated election year tax cut, we're not on board. We've taken lawmakers at their word that the state's budget is tight and the farm economy is shaky, which makes any effort to reduce revenues irresponsible.

Republicans made a very good argument for resisting the use of one-time surplus dollars for ongoing spending. But the same argument applies to tax cuts, which reduce revenue in the years ahead just as spending gobbles tax dollars.

In the late 1990s, Branstad and Republicans passed a big income tax cut using surplus revenue. Rather than spurring growth, it led to big budget problems once the surplus vanished.

When talking future tax cuts, lawmakers must take the long view.

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