Rolling Back and Giving Back

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Friday, March 20, 2020

Rolling Back and Giving Back

The COVID-19 crisis is having a dramatic impact on every part of our lives. We hope you are staying safe and healthy. These are unprecedented times: part 9/11, part financial crisis, (but mostly) part unknown.

Our team has been working remotely and taking what we believe are necessary precautions to stay safe, and importantly, not contribute to the spread of this virus.

Governments at all levels have been taking action too. Through various means they are attempting to keep people safe, keep key services and programs operating, and keep commerce and our financial systems up and running.

In Iowa, that has included suspending the legislature for at least 30 days, though not before several critical actions took place. A supplemental appropriations and emergency measure was passed that:

Maintains Medicaid and other health program funding
Increases state hygienic lab funding
Provides 2020 appropriations levels for the first two months of FY 2021, if needed
Makes emergency appropriations from the Economic Emergency Fund (EEF) of up to 10% for purposes approved by the governor, through August 31, 2020

Interestingly, to help people, a large part of government's response has been to rollback regulations and either give back, or at least delay collecting, tax dollars.

There will certainly be trying times ahead and an appropriate step taken today may not be what is needed in the future. As we all work through this together, you can read more about what is going on in Iowa and around the country below.

Iowa's Rainy Day Funds

The Revenue Estimating Conference (REC) said Iowa's financial position is sound, but cautioned it is too early to calculate the impact of the coronavirus.

In just a few days, uncertainty in many areas of our lives has increased. Outside pressures on Iowa's budget are unknown at this time, but the state's reserve fund balances are in good shape compared with many other states.

Iowa's state government could operate for 37 days on reserve funds according to a PEW research study. This is higher than the 50-state median amount of 27.9 days and 13th highest in the country.

Last week we shared a New York Times article about how government red tape slowed virus testing.

Since that time, red tape has been cut, helping to increase testing. Freedom Works reports:

In fact, the same article indicates Iowa's reserve funds had enough in total balances to cover a larger share of government spending than they could before the 2007-2009 recession.

Cutting Bureaucratic Red Tape

Occupational licensing can serve to protect health and safety, but too often, it creates excessive barriers to work. In times like this, licensing can even prove to do more harm than good.

Fortunately, Governor Reynolds recognized the potential harm and loosened some licensing restrictions in the medical field. In her Proclamation of Disaster Emergency, the Governor:

Allows for temporary medical licenses to be granted to assist with COVID-19 response for individuals who held a license within the last five years but are not current
Reduces the number of hours of experience needed for medical students for a license if their supervising institution of higher learning deems that their skillset is sufficient to practice

At a time when additional burden is placed on the medical field, waivers like these are critical to ensuring that staffing levels are able to be maintained. Other temporary reforms that other states have utilized include:

Interstate reciprocity for healthcare licenses
Streamlined universal recognition that allows individuals licensed in another state in the medical field to become licensed within one day

These solutions will not solve this crisis alone, but cutting as much bureaucratic red tape as possible can help with the response to COVID-19.

If people are available who have the needed skillsets to assist with healthcare surrounding this pandemic, the government should not disallow them from helping. Unnecessary barriers to work in the medical field at this time will do more harm than good.

ITR applauds the steps that Governor Reynolds has already taken and hopes that more action may be taken in Iowa to help respond to this health crisis.

Links of interest:

States Lead The Way in Coronavirus Crisis With Emergency Removal of Occupational Licensing Obstacles - CATO Institute
Rules and Regulations Suspended Due to COVID-19 - Americans for Tax Reform
Iowa suspends property tax collection, evictions; relaxes or extends deadlines on regulations in reaction to coronavirus outbreak - DM Register

The Iowa Capitol is closed to the public, and the legislative session has been suspended for 30 days.

At this time, it is impossible to know the COVID-19 impact and determine priorities for lawmakers when they come back to the Capitol. You can see the progress of legislation through March 16 by visiting the Legislative Update page on our website.

It’s easy for politicians to yield to noisy special interest groups when the taxpayer keeps quietly paying the bills.