The Gazette Editorial Board
What to do with Iowa’s nearly $1 billion budget surplus?
Some Republican legislators think the state should give all the extra money to taxpayers. They say the surplus represents an overpayment and the money should be returned to the people. They’ve proposed returning as much as $800 million in the form of a flat income tax credit of $375 for individuals or $750 for a family.
We’re not opposed to a modest refund to taxpayers. Doing so could help stimulate the economy and be of most help to lower-income families — next year when taxes are filed.
But at a time when so many critical needs are on the table, legislators should first look to use some of the surplus to promote Iowa’s long-term growth and stability. It would be shortsighted to refund the bulk of the surplus, as it would be to spend it all.
Vital services such as mental health care, transportation infrastructure, public safety and the court system, education reform and school budgets are among areas where an assist from the surplus are most warranted.
Counties still are waiting for one-time financial aid they were promised in order to help them transition to a regional mental health system.
The jury’s still out about how to bridge a growing gap between revenues and the cost of critical upkeep and upgrades to the state’s roads and bridges.
Many legislators want to use some of the surplus toward public schools increasingly strained operating budgets.
Gov. Terry Branstad, a Republican, has said he wants some to jump-start education reforms.
And after years of belt-tightening, there are likely other areas where surplus funding could wisely be spent. And why not save some of it? Maintain a cushion against inevitable economic ups and downs that affect tax revenues.
Refunding all the surplus might make taxpayers happier on next year’s tax returns, but the benefits pale compared to putting more money to work for the broader good.
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