The president of Iowans for Tax Relief says state policymakers considering ways to reduce the size of state government should consider doing away with the entire Department of Economic Development.

Iowans for Tax Relief president Ed Failor, Junior, says now is the time for “bold changes” in state government beyond the 10 percent, across-the-board cut in the state budget that Governor Culver ordered Thursday. “Look, our governor says that (an across-the-board cut) somehow, to quote him, avoids the unfair and unrealistic picking and choosing of important programs…He doesn’t want to have to make tough decisions,” Failor says.  “Well, the job of a manager is to make tough decisions and I just helped make the first one for him.” 

The Department of Economic Development has come under greater scrutiny over the past month because of problems in the department’s Film Office. Failor says the entire Department of Economic Development is superfluous.

“I think it’s the job of the governor and the legislature to do economic development work,” Failor says.  “Now it just becomes more timely that we realize not only is it something that’s a duplication of services, it’s also something that’s having a real negative impact and it’s not being managed very well.” 

An audit released at the beginning of the week found invoices for just two of the 22 film and TV productions which received certificates for state tax credits.  A criminal investigation of the Film Office is underway.  Beyond the Film Office fiasco, though, Failor says state economic development policy in general should be changed as the variety of state grants and loans being handed out puts the state in the business of picking “winners and losers” in the state’s economy.

“You take the Values Fund, you take the Power Fund, you take film tax credits and all the tax credits and those sorts of things and it’s government picking winners and losers — and that’s always a bad idea,” Failor says. “What’s a good idea is leveling the playing field so people find Iowa a good place to find a job, start a business and raise a family.” 

Failor advocates elimination of the state income tax, both for corporations and for individuals.

“The states that experience the greatest economic growth and population growth and, therefore, a broadening of their tax base and greater support for government in the end are those with the lowest or no income tax so we need to see that for what it is,” Failor says.  “Iowa needs to get competitive with our tax structure.” 

Seven states — Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming — have no state income tax.