An Iowa research group says the number of manufacturing jobs continues to fall in the state, even after a new sales tax break was given to manufacturers, likely costing the state tens of millions of dollars. Mike Owen, executive director of the Iowa Policy Project, says backers of the tax break cited a common policy idea that lowering taxes leads to more jobs, but that’s not what’s happening.
The tax break allows more exemptions for manufacturers when they’re purchasing supplies. The report says it could cost the state 80-million dollars more than the original projection. Owen says mixing politics with economic analysis may have led to overly-optimistic revenue projections.
Governor Kim Reynolds is now weighing options to deal with the additional revenue shortfall.
