This month, the Des Moines Register reported Senate Ways & Means Chairman Joe Bolkcom (D-Iowa City) as being favorable to the idea of reducing tax credits for films produced in Iowa in an effort to reign in the state’s ballooning budget deficit. Specifically, Senator Bolkcom stated, “We’re probably being more generous than we need to be” and that the issue of film production tax incentives needs to be reviewed.
As has been the focus of the House Republican Caucus, the State of Iowa faces enormous budget shortfalls. The legislature may still have to act to balance the Fiscal Year 2009 (FY09) budget. The FY10 budget will likely have a deficit of more than $60 million, and even more concerning is the FY11 budget is facing a $1 billion spending gap. Accordingly, House Republicans have offered several ideas to trim government spending in order to balance Iowa’s books. If fact, last session House Republicans offered amendments to numerous budget bills totaling more than $300 million in savings to Iowa taxpayers. Unfortunately, those proposals were rejected by Governor Culver and his allies in the legislature.
It appears that rather than make state government more efficient and eliminate unnecessary spending, some members of the legislature would rather pair back and eliminate tax incentives. Aside from the film production tax credits, what other tax incentives are on the Democrats’ chopping block? While we’ll learn more in the coming months, as interim committees meet, about other ideas to reduce Iowa’s budget deficit, it is safe to say that nothing is off the table and reducing and eliminating tax credits is a live round.