The report, titled “The Cost of Cuts in Iowa,” finds that a 1 percent cut in state spending in Iowa leads to the loss of 580 jobs, and argues that increasing spending would help spur economic growth.
Since 2009, the report finds, per-capita state spending has declined 15 percent, leading to a reduction in economic activity.
“Iowa lawmakers should reverse this course of disinvestment and commit to building a prosperous future for all Iowa’s families, including a robust job market that supports Main Street businesses and overall community development,” the report says.
It also issues a few recommendations, including a “stronger, more equitable tax system” with higher burdens on “corporations and the rich”; the closure of corporate tax loopholes; and the promotion of “economic and racial equity” through the preservation of public investments and public-sector jobs.
Raising state revenues is particularly important, the report suggests, if lawmakers are serious about offsetting decreased local-government revenues with state aid as part of a property-tax reduction plan.