IOWA CITY, Iowa (May 14, 2012) — The Iowa Fiscal Partnership issued the following statement today regarding the close of the 2012 session of the Iowa General Assembly:

Governor Branstad took the opportunity last Friday to "correct" a "failure" and a "broken promise" in the wake of the 2012 legislation session. Unfortunately, he was aiming at a ban on lead shot in dove hunting, and he missed the real target.

What really got dropped was an improvement in the Earned Income Tax Credit (EITC), approved by lawmakers two straight years, and which the Governor agreed this year to sign. Legislators and the Governor allowed this priority to slide because of their stalemate on an unrelated cut in commercial property taxes — and over 200,000 Iowa families will pay for it.

As the Iowa Fiscal Partnership has shown, raising the Iowa EITC not only would raise the threshold at which Iowa families start to owe state income taxes, but would boost local economies throughout the state. In fact, the Senate-passed bill would raise the EITC from 7 percent of the federal credit to 20 percent, with an impact per House district of over half a million dollars. This would inject an average of $250 into the budgets of 210,000 working families across the state — money residents would spend in their local economy, helping small businesses.

This boost to the economy through the income tax stands on its own without being tied to unrelated property-tax issues. Iowa lawmakers dropped the ball in failing to achieve an improvement in the EITC, a far more important issue that could help far more of their constituents than permitting lead shot. There was bipartisan agreement on the need to act. Failure to do so leaves intact the biggest inequity in Iowa's tax code: income taxes on low- and moderate-income families with children. Both national studies of the federal EITC and the Iowa Department of Revenue's report on the Iowa EITC show the importance of the EITC to enabling working, low-wage families with children to escape poverty and make ends meet.


The Iowa Fiscal Partnership is a joint public policy analysis initiative of two nonpartisan, Iowa-based organizations, the Iowa Policy Project in Iowa City and the Child & Family Policy Center in Des Moines.