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Page 42

Iowa

Terry Branstad, Republican

Legislature: Republican

Took Office: 1/83

Grade: D

After 16 years as governor, Terry Branstad, the na-

tion's senior governor in terms of longevity in office, is

finally retiring.  Branstad has sponsored some beneficial

fiscal reforms during his 16-year tenure, including twice

cutting income tax rates and most recently reducing the es-

tate tax.  Yet Iowa has had one of the most depressed econo-

mies over the past decade.  Iowa is only one of three states

that has fewer residents today than it did in 1980, although

population has grown slightly in the 1990s.  In fact, the

Iowa Tax Foundation reported not long ago that Iowa added

more state government employees than taxpayers from 1980 to

1991.  The Small Business Survival Committee ranks Iowa 37th

of the 50 states in terms of governmental costs imposed on

businesses and entrepreneurs.  How much of the blame for

that economic anemia rests with Branstad is debatable.  What

is not debatable is that after 16 years under Branstad, Iowa

is still a high-spending state, with expenditures as a share

of personal income that are today 8 percent higher than the

national average and almost 15 percent above those of its

neighbors.  Iowa is also crippled by a tax code that econo-

mist Arthur Laffer recently described as "overtly unfriendly

to entrepreneurs, investors, workers, and retirees."  Even

with Branstad's recent tax cuts, the personal and business

income tax rates are among the highest in the nation.  Bran-

stad has done too little, too late to fix the repressive

tax-and-spend regime in Des Moines.

Score Grade Rank

Overall Fiscal Policy Score

40

D

40

Spending Score

31

D

42

Revenue and Tax Rate Score

43

C

34

Amount

3.0%

Average Annual Change in Real Per Capita Direct General Spending through 1996

1.7%

Average Annual Change in Direct General Spending Per $1,000 Personal Income through 1996

1.5%

Average Annual Recommended Change in Real Per Capita General Fund Spending through 1999

0.5%

Average Annual Change in General Fund Spending Per $1,000 Personal Income 1996-98

2.5%

Average Annual Change in Real Per Capita Tax Revenue through 1997

0.9%

Average Annual Change in Tax Revenue Per $1,000 Personal Income through 1997

-1.9%

Average Annual Recommended Change in General Fund Revenue Per $1,000 Personal Income through 1999

2.8%

Average Annual Change in Real Per Capita General Fund Revenue 1996-98

-0.5%

Average Annual Recommended Tax Changes as % of Prior Year's Spending through 1999

-4.52

Change in Top Personal Income Tax Rate, proposed and/or enacted (% points)

0.0

Change in Top Corporate Income Tax Rate, proposed and/or enacted (% points)

21.0

1998 Combined Top Income Tax Rates (Personal plus Corporate) (*0.5)

2.0

Change in Sales Tax Rate, proposed and/or enacted (% points)

7.0

Change in Gas Tax Rate, proposed and/or enacted (cents per gallon) (*0.5)