2005 Condition of the State of Iowa
Brian Gongol


In his 2005 Condition of the State address, Iowa Governor Tom Vilsack calls for more spending on health care, a higher cigarette tax, and universal pre-school access.

Among other questions: Why universal pre-school? For what reason should the state now begin spending lots of additional money on a new education program when it cannot afford what it already has? What of the families who think their young, pre-school children are better off at home or under the care of whomever the parents choose, rather than under the care of the state?

Perhaps most frustrating is that too much credit is given to the government's ability to create economic growth:
"We invested in advanced manufacturing jobs -- jobs that require higher skills and command higher pay.

"We welcomed small, high-tech firms to Iowa while also announcing the largest single economic development project in our history with the expansion of Wells Fargo.

"We have supported thousands of good paying jobs while the number of companies expressing an interest in locating or expanding in Iowa grew from 51 in January 2003, to over 400 today. All of this occurred because we worked together to establish and promote the Iowa Values Fund."
What the Governor didn't say was that all of those economic-development projects came at the expense of small businesses already working in Iowa.

In a better world, the Governor would have said,
"We have returned Iowa to its first-in-the-nation status in adult literacy, high-school graduation rates, and college-entrance exam scores. We have simplified the Iowa sales tax code, removed needless regulations from the books, and cut taxes. Iowa is now the most competitive state in the nation for small business."
Sadly, though, Iowa is behind twelve states in adult educational attainment, no better than 6th in adult literacy, and places 11th on the ACT behind Connecticut, Maine, Massachusetts, Minnesota, New Hampshire, New York, Oregon, Vermont, Washington, and Wisconsin. In fairness, Iowa does very well on the SAT, but the participation rate is just 5% -- Iowa kids taking the SAT are a self-selected group of high achievers trying to get into prestigious schools.

Meanwhile, has a mind-numbing array of state taxes and 36 pages of special local-option sales-tax districts. They make Iowa a very difficult state in which to do business -- especially if you're a small or startup firm that needs to spend its time selling new things rather than dealing with red tape. Heavily-taxed, highly-regulated environments are great for large companies; they create a terribly hostile environment for new competitors who don't have legions of bookkeepers and attorneys at the ready. The more challenging the regulatory environment, the better for businesses trying to keep the little guy out.

Iowa needs its state and local governments to handle the basics: Good roads, clean water, and high-quality schools. And then it needs the Governor and the Legislature to stop taking taxpayers' dollars just to spend them on feel-good "economic development" projects. What is the value of a job "created" by one of those programs if it was bought with tax money that belonged to someone with an existing job? That's not development -- that's theft.