The Elbert Files: Chasing rainbows

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“They’re chasing rainbows,” my friend K.C. said when our paths crossed near Terrace Hill on an unseasonably cold day.

I was rubbing my hands together to stay warm and the idea of chasing rainbows sounded inviting.

“Who’s chasing rainbows, and where can I find them?” I asked with a smile.

“Republicans at the Statehouse,” K.C. answered. “They think that by eliminating taxes on retirement income, Iowa will become a haven for old folks, like Florida and Texas.”

“Peter Fisher says that won’t work,” I replied.

Fisher is research director for Common Good Iowa, a nonpartisan public policy group based in Iowa City, and he recently wrote that studies consistently show “people do not move from state to state over tax policy.”

He quoted a study by the University of New Hampshire, which said: “State tax policies toward the elderly have changed substantially while elderly migration patterns have not.”

“Everyone knows that older people move to be closer to relatives or for warmer weather, not because of tax policy,” K.C. said.

“Everyone except Republicans at the Statehouse,” I replied.

Fisher’s analysis showed that although 1% of older Iowans leave the state each year, their loss is mostly offset by seniors moving to Iowa to be closer to family and such.

Eliminating income taxes on pension income will cost Iowa about $400 million a year, he estimated. Meanwhile, the net loss of elderly Iowans is only about 400 people a year.

“That amounts to $1 million for every net out-migrant, most of whom are likely moving for the weather,” Fisher wrote.

Besides, he added, Iowa law already exempts Social Security from income taxes. As a result, the majority of seniors already pay little or no income tax.

The new pension exemption is only a small part of the multiyear tax package Republicans passed this year to move Iowa to a flat tax of 3.9%, which will cut state revenues by about 20% in 2026.

“Politicians never think about how such huge cuts will affect quality of life,” K.C. said.

“The really sad thing,” K.C. continued,” is state government is sitting on a huge pile of cash because of federal COVID payments. But they’re not using that money to fix any of Iowa’s many problems.

“The only thing they will spend it on is rural broadband, which sounds good. But trust me,” he said, “they’ll mess it up, just like they did 30 years ago when they built the statewide fiber-optic network that was hugely expensive and vastly underused.

“Did you see what they want to do to teachers?” K.C. continued. “They’re only going to spend 2.5% more on education, at a time when inflation is three times that. Talk about a recipe for disaster.

“And even less of the money they spend will go where it’s needed in public schools, because they’re going to set up a new fund to help private schools.

“If you want to see what the future of public education in Iowa looks like, just look at what’s happened to the nursing profession,” he said.

“Iowa nurses have been underpaid for decades. Then COVID hit and drove up demand to the point where nursing homes and some hospitals couldn’t get enough help. They wound up paying exorbitant wages to traveling nurses to cover regular shifts because of the burnout rate.

“Now, all nurses are seeing how much more they can make if they go into the traveling nurses portal. It’s kind of like what happened in college athletics to allow players to jump to a new team between seasons.

“Anyway, the nurses are doing it now and teachers soon will be, too. In fact, some already are, judging by the news stories about schools not being able to find enough substitutes.

“It’s only going to get worse.

“It won’t be gold that Iowa lawmakers find at the end of their tax-cutting rainbow, it’s a giant lump of coal,” K.C. said as he turned and walked away.