Wednesday, October 11, 2006

Some Fiscal Fun

If these two stories had waited a couple of days, they could have been Friday Fiscal Fun, but alas, it's only Wednesday.

Via David Yepsen's blog: State Treasurer Michael Fitzgerald thinks it's time to cut IPERS benefits for new state employees.

This is the kind of thing he wouldn't dare say if he had a November opponent. I'm also not sure it's a good idea. When Culver initially announced his plan to tinker with IPERS, I said:

I'm not sure how much clearer I can make this: People who have worked for the state for decades, likely at below market value, are relying on that money for food and medicine.

The same applies here. Many state employees, especially new hires, are going to spend decades of their life working for the state at below market value under intense scrutiny due to the legacy left behind by a generation of predecessors that include Archie Brooks, Ramona Cunningham and others. The least we can do is give them the best possible retirement plan, health insurance and the like.

On another fiscal note, the Tax Update Blog has a post from Chris Atkins of the Tax Foundation, explaining why Iowa is ranked 43rd out of 50 states in state business tax climate. The short version:

Iowa's corporate tax rates are higher than 45 other states, plus loopholes and incentives which add complications.

Iowa has 9 different income tax brackets for individuals, only one other state has more. They've also done a poor job adjusting those brackets for inflation.

Federal tax deductibility also creates extra loopholes.

So Joe and I both agree on one point, we need to simplify the tax code, and to do that we need to close some loopholes. Once that's done, though, I'd rather use the money to do tangible things like properly funding education and getting health care for the 330,000 Iowans that don't have it than spend that money trying to improve a "tax climate" ranking.

But then again, Joe's a fiscal professional and I'm a liberal with a journalism degree.


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