“Now that the economy is improving, families with extra money might finally repair that leaking roof or get the eyeglasses they couldn’t afford last year,” an editorial from the Des Moines Register argued this week. “Some will save money for the future. A family would not hand any extra money back to their employer. Yet this is exactly what some lawmakers want to do now that the state has an $800 million budget surplus.
“Legislative Republicans have proposed using hundreds of millions of ‘extra’ dollars to give Iowans a one-time tax refund. The credit amounts to $375 for individuals or $750 for couples who file taxes jointly. House Republicans are so eager to get rid of the money, they rolled out the plan in House File 1, the very first bill they introduced this year. Senate Republicans are working on an identical bill.
“While we understand the sentiment behind these proposals, they should not be pursued.
“Iowans wouldn’t see the money for a year, when they file their returns for the 2013 calendar year. A bump in the size of their tax refunds isn’t going to stimulate the economy. The proposal unnecessarily drains the state treasury at the very time Iowa needs to restore some vital government services that have been pruned away in recent years.
“Anyone who has arrived at a court clerk’s office only to find the doors locked or thought about taking their own lawnmower to a favorite state park knows this. A family trying to pay for college at a state university could give some advice to lawmakers about how to put $800 million to use for the public good. So could a boater who refuses to swim in this state’s filthy lakes or rivers.
“Lawmakers often talk about job creation. If they want to use the surplus for that purpose, they should listen to Iowa State University economist David Swenson. The government directly spending $780 million would create 2,000 more jobs than giving Iowans each a few hundred bucks and hoping they spend it. Or lawmakers could invest in recreation, which studies have shown also stimulates the economy.
“And if lawmakers don’t want to spend the money, another option is to save it. With uncertainty over the economy and the federal budget, our elected officials should have the foresight to realize the state just might need a few million extra dollars next year.
“A family whose finances improved might pay off debt, insulate the attic or save more for a rainy day,” the editorial concludes. “They know there are problems to take care of and a future to think about. State lawmakers should be so wise.”
What do you think should be done with the state’s budget surplus?