In the Public Interest

* The views expressed in this column are those of the author and not necessarily those of Public Interest Institute. They are brought to you in the interest of a better-informed citizenry.*



Iowa is growing, but at the rate of 0.4% in 2004 and is ranked 40th out of the Union. Extremely slow population growth, slow economic development throughout the state, hindering tax policies affecting both the agriculture and business sectors, not to mention the challenge of a constantly changing and globalizing economy that directly affects Iowa, are all linked in some way to create a mountain of challenges that seem insurmountable for 2005. The challenge: raise Iowa’s economic momentum from its less-than-stellar negative rating and actually grow our economy this year.

Step 1: Instead of blindly following one over-arching vision dreamed up by the Iowa Legislature or Governor and put into practice from the top, Iowa citizens need to be empowered to improve and grow Iowa in order to come up with the most flexible and efficient plan to suit their needs. Ways to empower citizens start with putting tax money back into their pockets. Easing the tax burden for citizens and businesses will not only enable Iowans to utilize the market forces to their advantage by creating local and state competition, but also draw even more business to the state.

Step 2: Cutting taxes includes prioritizing government services. Is the Iowa government allocating resources efficiently, and concentrating on spending taxpayers’ money on programs within Iowa’s constitutional boundaries, such as defense and justice systems, or on “social engineering”? Privatizing services, from technology to cleaning, is one way to control costs and get the most for every dollar.

Step 3: Efforts should focus on the small entrepreneur, not large industry or manufacturing. Iowa is doing what it can to attract and retain companies that bring lasting jobs to the state, but what about small businesses, which accounted for so much of the 2004 job and economic growth? The Jobs Summit at North Iowa Area Community College, made up of business and legislative leaders, is one example of Iowa’s attempts to improve development. Though working together is important, the Legislature must come to the table with a “hands off” approach. Instead of micromanaging efforts to bring jobs to the state, more effective support would include improving Iowa’s tax code, reducing regulations, or helping business in other ways – not creating more government bureaucracy in the name of growing the economy.

Step 4: The other part of Iowa business is its large agriculture sector. Not only are manufacturing and other labor-intensive services facing global economic challenges, farmers are fighting the battle along side of them. Though only number seven on a list of concerns facing state legislatures, keeping a close tab on how laws affect businesses and farmers “adapting to world trade” should be closer to the top among Iowa’s concerns for 2005.

With local efforts such as the work of chambers of commerce and meetings such as the Job Summit in north central Iowa, and major national attention in policy issues due to the national presidential election, both the rank-and-file and governing citizens of Iowa should be off to a running start. Lowering taxes, creating better small business incentives, and searching for ways to improve Iowa’s competitive advantage will take work, diplomacy, and courage. These “steps” do not need to happen in this order, but are necessary for a jump start. Iowa is ready for the challenge — which step is under your responsibility?

Laura P. Keith

Research Analyst,

Public Interest Institute,

Mt. Pleasant