One On One With Don Shoultz
By Clyde Weiss
Iowa State Rep. Don Shoultz is the ranking Democrat on the Iowa House Ways and Means Committee in the Republican-dominated legislature. Elected in 1982, he lives in Waterloo. He has been greatly involved in searching for humane solutions to the state's budget crisis.
To some observers, the current budget process is a class struggle. Do you agree?
If taxes are lowered on people who make the highest salaries, yes.
How much will the reduction of such vital public services as social services and health care impact your local communities? What are you doing to prevent those actions?
When you have these kinds of deficits, one of the first things to go are human services programs. That includes education — particularly higher education, reducing the ability of the lower 20 percent of students to go to college. Another effect is that states — having less money — cannot fund local programs they've started. This year, for instance, Iowa dumped $70 million [for various local programs] back on local governments. So this year, there's $70 million less going to local governments. In my city of about 70,000, they had to cut another $1.2 million after they'd already adopted their budget; and the county had to cut some $600,000. As a result, they had to lay off some people who were making fairly livable wages — with health care benefits — and replace them with people who worked for a private agency at minimum wages and no benefits. That's happening all over Iowa.
In light of the Bush tax cut, what kinds of challenges do you and your constituents face balancing a budget and saving public services? Is raising state or local taxes a proper — and feasible — remedy?
Raising taxes is a proper remedy, but not feasible in Iowa. I don't believe I can get my Democrats to agree to any revenue measure that would be seen to be an increase in taxes or fees. And, because we are facing a deficit situation every year, it will not be possible for the Republicans to cut taxes in the current fiscal year because, in Iowa, you must balance the budget. We did raise one tax this year: the streamlined sales tax, which provides for collecting sales taxes on Internet transactions.
Are corporate tax loopholes a significant drain on your state's revenues? If so, is there a move to close the loopholes?
One of our loopholes definitely is a drain. Some corporations that do business in Iowa will set up a sort of dummy corporation in another state. The Iowa corporation will show a loss — so they don't have to pay taxes to Iowa for income reported by the out-of-state subsidiary. We could close that loophole, and probably realize another $25-$30 million. Democrats tried to close it, but they were thwarted by the Republicans who feel that's a tax increase.
Do you feel that some of your legislative colleagues — and perhaps the governor himself — are using the budget process as a way to dilute the power of unions?
The Republicans here would like to dilute the power of the unions. But the governor [Democrat Tom Vilsack] supports them.
How important a force has AFSCME been in the effort to bring fairness and common sense to your budget-crisis debate?
AFSCME's been there whenever we've needed them. When the governor asked the unions to argue against more tax cuts, AFSCME was a significant presence every time one of those bills came through.
