FROM THE DESK OF REPRESENTATIVE DE BOEF

May 15, 2009

It is no secret that we live in a state that is “getting older.” The average age of Iowans increases each year because we are losing more and more of our young adults to out of state opportunities.

As an example, we have a net loss of 8,500 college graduates each year, creating a drain of highly trained young adults, a loss that demands our attention.

Iowa's population is around 3 million and has been stagnant for about a century.

I think it is a legitimate job of government to create a social climate which attracts people, not one they find repellant. Our current political power structure doesn't seem to see it that way. Their economic policies seem designed to send businesses, and hence jobs, high-tailing it for other states.

What is happening in Iowa is part of a national migration in which there are winners and losers. The losers are states that have over taxed, over regulated and in general made economic development more difficult.

The winners are states that have made their environment more attractive to the business community by limiting the encroachment of government.

The best comparison features two similar states going in opposite directions -- California and Texas.

One demographic writer makes a vivid case. He studied -- if you can believe it -- rental records of the U-Haul company, reasoning logically enough that they should give a fair idea of how real people react to high tax and heavy regulation. He found this:

“When comparing California with Texas, U-Haul says it all. To rent a 26-foot truck one-way from San Francisco to Austin, the charge is $3,236, and yet the one-way charge for that same truck from Austin to San Francisco is just $399."

Why? It is clear that thousands of people are leaving California for Texas, and U-Haul must pay its employees to travel to Texas to retrieve the trucks because almost no one is moving the other way.

More simply stated, Texas is a friendly business state.

There are a variety of independent think tanks that evaluate the best states in which to do business every year. The American Legislative Exchange Council (ALEC) is one such nonpartisan group that provides a variety of services and educational opportunities to state legislators. It's 2009 economic index is fairly consistent with similar studies, some of which show Iowa in even more dire straits.

The ALEC economic outlook for Iowa indicates we are well on our way in joining California as an economic loser. By its measure we have fallen from 23rd to 35th in the latest year alone in terms of our economic attractiveness to business.

The ALEC study uses such factors as, personal and corporate income tax rates, property tax burdens, estate/inheritance taxes, number of public employees per 10,000, minimum wage, and if the state is a right to work state.

While 35th is bad, the majority party in Iowa is apparently trying to make it worse. In the past two years a few blue dog Democrats have joined Republicans in stopping forced union dues for public employees, the loss of federal deductibility as a state income tax deduction, doctor assignment in workers comp cases, costly energy policies, and an attempt to end Iowa's status as a right-to-work state. Space limits my ability to report a bevy of other anti-business initiatives sponsored majority party legislation.

Some folks just don't get it. We cannot raise the cost of business by higher taxes and regulation and expect to improve our attractiveness as a business state. There are some things we don't have control over like the weather and geographic location but we do have control over the policies we set.

I will predict that Iowa will fall even further in the coming year as a result of its hostility toward the business community. That fall will continue until we have a majority of members committed to policies that foster economic growth.

In the mean time if you are looking to supplement your income consider the U-Haul business.

As an aside, it should be noted that the state’s taxing policies are having a decided impact on older Iowans as well. Many of our retired mobile seniors are moving their residence to states like Florida and Texas that have no state income tax. Finding ways to keep their purchasing power and contributions to our local communities is another challenge worth investigation.

I am indebted to ALEC for their continued analysis of state policies and especially for their analysis of the competitiveness of state economic policies.

Please don’t hesitate to contact me during the interim. I can be reached at 641-634-2227, or hgdb@iowatelecom.net.