Editor’s note: This is a one-time installment of The Elbert Files by Dave Elbert, a contributing writer for Business Record sister publication dsm magazine. Elbert has covered local history and Iowa business news for more than 40 years, first for the Des Moines Register and then the Business Record.

I found my old friend K.C. on a recent fall morning in the John and Mary Pappajohn Sculpture Park, admiring British sculptor Anthony Caro’s “In the Morning,” which portrays a woman stepping into or out of a bathtub.

Caro (1924-2013) was widely regarded as the greatest sculptor of his generation, although “In the Morning” is atypical of his abstract work with I-beams and other large pieces of metal. “Morning” is more literal, although it does illustrate another Caro trait – sculpture at eye level that allows viewers to approach and interact from all sides.

K.C.’s eyes were closed, and he had the hint of a smile on his face.

“What’s so amusing?” I asked.

“I was just remembering Warren Buffet’s quote about the 2008 financial crisis,” he replied.

“You know, the one where he said: ‘It’s only when the tide goes out that you discover who’s been swimming naked.’”

I must have looked puzzled, because he quickly added: “Think of the woman in the bathtub as Iowa’s state government. The tide is her bath water, which is made up of all the taxes and fees that keep state government afloat.

“For the past few years, because of all the tax cuts we’ve had, the water in the bathtub has been draining,” he said. “But until now, the buckets of money – more than $11 billion – that federal COVID payments poured into Iowa helped keep our waterline stable.

“State officials had planned to carefully hoard that surplus to cover revenue lost by their cutting taxes, until business expansions and consumer spending made up the difference.

“But now with the farm economy in crisis and consumer spending threatened by Trump’s tariffs, Iowa’s leaders are wondering if they miscalculated,” K.C. said.

“New revenue projections show the drain is faster than expected. Net tax receipts are down 16%, or about $1.6 billion, for the past two years. And that’s cutting into the $4 billion COVID surplus faster than expected.  

“It calls into question the expensive school voucher program for families who send their kids to private schools, not to mention Iowa’s turning down federal food assistance money, medical assistance and other programs.  

“Iowa’s deep tax cuts are starting to look too deep,” K.C. said. “Kind of like the cuts Kansas made in 2012 that had to be reversed five years later.” 

“I think I get it,” I said. “If you shut off the faucet at the same time you are opening the drain, the bathtub empties sooner.”

“That’s pretty much it,” K.C. said.

“But you know what’s even odder?” he added. “I heard last week that our lame-duck governor is touring the state, talking with local officials about ways to cut property taxes.”

“Doesn’t she know,” I said, “that one reason property taxes are as high as they are is because state tax cuts reduce the amount of state money available for local services, like schools, police and fire, nutrition programs and medical care?”

“Apparently not,” K.C. said.

As he turned to leave, he added, “Remember this is the governor who announced she was not running for re-election during the middle of last spring’s legislative session, a move that blew up any hopes of passing more of her agenda and left her newly appointed lieutenant governor high and dry.”