Editorial: Unintended consequences of tax cuts should not be ignored
One of the Iowa State legislature's goals is to continue to lower Iowans' taxes, and it's a noble goal.
We want an efficient government and lower taxes. But before lawmakers go further, they need to take note of the unintended consequences we're already starting to see from last year's property tax legislation. In the last session, lawmakers voted to ostensibly cap the amount of money Iowa cities could collect from growth in property taxes. And now many cities are facing an enormous budget crunch.
The city of Des Moines, as an example, has a $17 million dollar budget shortfall. They recently announced program cuts and layoffs as a result. But they're not alone. City leaders across the region are faced with some very tough choices. Some cities are choosing to delay infrastructure investments – which means less housing and less business development. Other choices could impact central Iowa's tourism, and economic development or even impede how mutual aid in support of public safety is provided.
By many metrics our region is the envy of the nation. The quality of life we enjoy is the by-product of decades of work done to develop public and private partnerships with a regional focus. Bravo, Catch Des Moines and the Greater Des Moines Partnership are all based on the premise that high tides lift all boats. But when cities are faced with budget constraints, dollars they previously invested regionally may dry up in favor of prioritizing their city.
We encourage our state lawmakers to take a serious look at the impacts of recent changes – before additional tax changes are proposed. We recognize this is hard work. Afterall, property tax code is just a part of hundreds of pages of code that impact other groups and processes. And changing just one area can be devastating to another. A comprehensive review is the only way to ensure the tax plans developed have the impact we want, without costing us in other ways. And keep in mind, if we stifle growth in our cities, it impacts our schools, community healthcare, and other priorities.
Our state leaders would be wise to appoint a group of mayors, assessors, and economic development leaders to study the potential impacts and make strategic recommendations. This way we can ensure our lower taxes don't cost us in ways that could set our region and state back years.