The 2004 session is under way and there is a lot of work to do.  One of the major focuses this year will be to improve the economic climate in this state, which will create jobs, foster growth, and increase the States revenues.  Until we improve the economic climate, we will not be able to fund the services that the people of Iowa have come to expect.

This will not be an easy task, as there are numerous ideas on how to improve Iowa’s economy. 

First we must identify the problem.  We need to ask the question, why are businesses leaving this state to locate in some other state?”  Once we have identified the problem, then and only then can we truly begin a broad economic plan.

We will have about the same amount of revenue to spend in fiscal year 2005, which is the one we are working on, than what has been appropriated for fiscal year 2004, which is the one that we are in.

The problem is that there are built-in spending increases that total to about $200 million and $100 million more for anticipated increases.  This is about a 7% overall increase in the general fund budget.  The economy will not support that type of increase, especially in a sluggish economy.  The question becomes how we appropriate the monies that are collected at the state in a fair and equitable manner to reflect the priorities that we have.

Governor Vilsack’s solution is to raise taxes.  When the economy is showing signs of improving he wants to throw in the towel on trimming state government and take the easy way out in raising taxes.  This may have a short term fix to the budget shortfall, but will in fact do more harm to the states economy and could have a devastating affect in the long term.

How could removing some of the sales tax exemptions have a devastating affect in the long term?  If you are an accountant and located along the borders of our great state and the state starts collecting a sales tax on your service, but the neighboring state does not charge that tax, why not move your business to the other state.  We are already under a disadvantage in our high state income tax laws.  This new tax would put our state at a bigger disadvantage and encourage more businesses to leave our state and take the jobs with them.  We cannot afford to lose any more jobs!

One of the lesions that I learned in the 1980’s was, while it is important to survive the present, it is equally important to prepare for the future.  I have yet to find someone or some government who has spent their way out of financial problems. 

I read a quote once that said, we are all faced with a series of great opportunities brilliantly disguised as impossible situations.  I like to think that we are at the threshold of a new year filled with opportunities. As opportunities present themselves this year we need to capitalize on them to improve the overall condition of the great State of Iowa.  We need to be part of the solution and not part of the problem.

Until next week,

Tom Sands

Don’t forget to attend your precinct caucus this Monday evening.  They start at 6:30 and the different sites have been published in all of the newspapers.

The caucus is truly the beginning of the political process.  If you have a particular issue to bring forward, the caucus is the place to begin.