Condition of the state 2018

Gov. Kim Reynolds, from governor.iowa.gov

[The text of Governor Reynolds's address is here.]

Governor Kim Reynolds today presented a hopeful message to a joint session of the Iowa legislature, with a vision of an "Iowa overflowing with opportunity" where "everyone has a chance to succeed." The main policy message, though, is that we are continuing our transition to a low-tax, low-service state. Reynolds became governor less than a year ago when her predecessor, Terry E. Branstad, was appointed U.S. Ambassador to China by President Trump.

The policy part of the speech promised continuation of the mix of conservative ideology and shouts to constituent groups (lobbying for the national renewable fuels standard, e.g.) begun with Republican ascendance in Iowa earlier this decade. Any problems those policies have created so far were either mysteriously attributed--including the always-amusing phrase "mistakes were made" when Medicaid was privatized--or ignored altogether. She touted her balanced budget without mentioning it required tapping reserve funds after earlier tax cuts produced a revenue shortfall. Big moves were promised on water quality without mentioning why the state has a water quality issue. (Large-scale farming operations have saturated the soil with fertilizer, which gets into groundwater, municipal water supplies, rivers, and eventually into the Gulf of Mexico's ever-expanding dead zone. It is also impossible to overstate the importance of this constituency to Midwestern Republicans.) At least it got mentioned, though, unlike all other environmental problems.

Dead zone in the Gulf of Mexico (Source: USAPP)

The small towns that historically served the legions of small farmers have had a rough adjustment to an era of corporate agriculture, and face an anxious future. "When I go home," Reynolds notes, "I hear the disappointment and I share the frustration when another storefront closes." There is a role for government in managing the transition--Reynolds will appoint a task force to explore statewide broadband, and proposes various health care and education initiatives--but there are limits to what even an activist state can do. (And will there be some consideration of return-on-investment when we build broadband across the state?) Anyhow, government is mostly portrayed in the speech as as alien and unwanted: The primary response to rural and small town stagnation is to double down on tax cuts. (We're not Kansas, at least not yet.) Reynolds promised tax changes with the goal of reducing individual and eventually corporate rates. It's appealing to say "Iowans will keep more of their hard-earned money," but assumes those Iowans will not miss the government services that will be cut or eliminated.

West Branch, Iowa painting by Grant Wood, 1931
(Creative Commons)

Reynolds lingered over the virtues of Iowa's small towns while virtually ignoring its cities. She claims "the heart, soul and spirit of Iowa will always remain in our small towns and rural communities," but, as in other states, urban areas are now where the Iowa economy happens. An increasing proportion of Iowans live in urban areas: 64 percent in the 2010 census. According to the U.S. Bureau of Economic Analysis, Iowa had just over 2 million jobs in 2016; over half of them are located in eight of our 99 counties. All of these eight have average wages or salaries at or above the statewide average, and even with widely varying performance among them their combined net migration in the 2010s is nearly double the state total. In other words, without these eight counties, Iowa loses population and is underwater financially. The governor thankfully omitted most of the culture war gunk (anti-immigration, repealing gay rights, crackdowns on violent crime, e.g.) in her address, but neither was there anything on affordable housing, public transportation, small business incubators or other ways to support Iowa's cities do their stuff (see Florida 2017). More emphasis on worker training could help develop the middle-level skills Iowa needs, but cutting state services, busting unions and rooting for the end of the Affordable Care Act won't help those workers deal with a likely future of uncertain, contract-based employment arrangements (Vinik 2018). Nor will they help Sioux City and Waterloo, two historic cities which lag behind in the post-industrial age. Nor will they help my city avoid having to close eight elementary schools.

From 2011-2015, Iowa lost population among key age and skill groups. Half again as many younger workers with college degrees left the state as moved in, with particular losses among those with high-level technical skills (Swenson and Eathington 2017, esp. Table 8 and Figures 2-16). Meanwhile, large cities across the country are seeing sharp increases in those aged 25-34 with four year degrees--even downtrodden cities like Detroit and Buffalo (Cortright 2018, Griffin 2018). Can the young educated people leaving Iowa be won back with a new round of  tax cuts? By partying like it's 1874? Will those workers and the firms that employ them be attracted by the legislative accomplishments Reynolds touted for 2017: voter ID laws, looser gun control, reformed collective bargaining, and defunding Planned Parenthood? Or were these accomplishments aimed at pleasing those who already live here and are nostalgic for some golden age before everything started changing?

(Source: "FY2019 Budget in Brief," State of Iowa Department of Management)

The opposition party typically keeps a low profile on Condition of the State days. (There aren't the silly canned responses that follow the U.S. President's State of the Union addresses.) Senate Democratic leader Janet Peterson praised Governor Reynolds's delivery and some of her proposals, but said legislative Democrats about how they would be funded given tax cuts and stresses on existing programs.

SOURCES:

"Iowa Community Indicators Program," Iowa State University: aggregated and original data as well as economic analysis
Joe Cortright, "Cities Continue to Attract Smart Young Adults," City Observatory, 2 January 2018
Richard Florida, "Anti-Urban States Aren't Just Hurting Their Cities," City Lab, 21 December 2017
Jennifer Griffin, "The Future Success of Cities Depends on Urban Kids," Strong Towns, 10 January 2018
Dave Swenson and Liesl Eathington, "Evaluating the Higher-Level Skill Content of the Iowa Workforce and Its Competitiveness with the Rest of the Nation," Department of Economics, Iowa State University, September 2017
Danny Vinik, "The Real Future of Work," Politico Magazine, January-February 2018

SEE ALSO:

James Q. Lynch, "Iowa Gov. Reynolds Focuses Speech on Solving Problems," Cedar Rapids Gazette, 9 January 2018
Joyce Russell, "Reynolds Touts Republican Achievements in Condition of the State Address," Iowa Public Radio, 9 January 2018

EARLIER POSTS ON HOLY MOUNTAIN:

"The Republicans' Tax Revolt," 22 December 2017
"Condition of the State," 14 January 2014