Iowa Republicans are blind to the state’s economic woes

How can you tell when politicians aren’t being honest with you about the future?

When they aren’t honest with you about the past.

This thought occurred to me when I read Rep. Zach Nunn’s opinion column in the Des Moines Register last week about how Republican policies — past and present — are affecting Iowans.

The column is one of many you will see from Republicans touting Donald Trump’s Big Ugly Bill, which Republicans just passed into law.

There had been rumors that Nunn, a Republican, might come back to Iowa and run for governor. But on Friday, after talking to Trump, he announced he’ll run for re-election in Iowa’s 3rd District. (This will help Trump, who desperately wants to keep Democrats from getting the majority in the US House).

Regardless, whichever Republican runs for governor, they will no doubt exhibit the same ignorance about the current trajectory of Iowa’s economy that Nunn did.

Consider the congressman’s statement that between 2018 and 2024, Iowa moved to a flat income tax and made other changes, and “Iowa’s economy grew, and the state budget went from a deficit to nearly a $2 billion budget surplus in 2024.”

Nunn supported those tax cuts when he was in the state legislature, so I can understand why he’d defend them. But I think that since moving to his new job in Washington, D.C., he’s clearly not up to speed with what’s been happening to Iowa’s economy.

Iowa’s economy isn’t growing. It’s shrinking.

As Iowa’s flat tax structure has phased in, the state’s Gross Domestic Product, after a spike in 2023, has actually contracted. Other states have grown, including our Midwestern neighbors. But we’ve been going in the opposite direction. Our economy is smaller.

Since 2022, Iowa’s economy has shrunk by 2.3% Last year, Iowa was ranked 50th in the country in economic activity by WalletHub. (51st if you include Washington, D.C.)

In the first quarter of this year, inflation-adjusted GDP declined in Iowa (as it did in most states.) But notably, ours plummeted 6.1%, tied with Nebraska for worst in the nation.

It is true, if you consider the longer period between 2018 and 2024, that Iowa’s economy grew. But what Nunn didn’t tell you — and no Republican will — is that during this period, Iowa’s real GDP grew at a slower rate than it did during the comparable period right before the Republicans began their series of tax cuts.

Between the beginning of 2018 and the end of 2024, Iowa’s real GDP grew by 5.9% overall. But between the beginning of 2011 and the end of 2017, the state’s economy grew by 15.4%.

In other words, Iowa Republicans cut state income taxes — mostly for the wealthy — and we got slower economic growth.

Even if you begin counting in 2019, rather than 2018, GDP growth under the new flatter tax regime was slower over the following six years than it was during the six years before 2018. It’s closer, but we still grew more under the prior system than the one we’re in now, 9.8% to 7.7%.

Neither growth figure is all that good, but that’s a column for another day.

As for the state budget, the Iowa Legislative Services Agency did, indeed, project a $3.6 million shortfall for fiscal year 2018. But what Nunn doesn’t seem to have noticed is the problem has gotten exponentially worse. In fiscal year 2026, the state faces an operating deficit of $900 million, the direct result of the flat tax that Nunn claims was a roaring success.

As for the state’s surplus, a flood of federal Covid funds and a post-pandemic surge in economic activity that boosted revenues in all 50 states, including Iowa, are largely responsible for these reserves. Without those revenues, and to a lesser extent, miserly Republican spending on K-12 education and other state programs, our balances would be much smaller.

Who knows, they might even have had to raise the sales tax by now.

Which may or may not be in our future if somebody doesn’t turn things around.

I don’t mean to belabor the point, but Nunn makes a lot of misleading claims trying to put lipstick on the pig that is Iowa’s current economic performance.

He does the same with the 2017 Trump tax cuts. Nunn claims that real median household incomes across the country grew $5,000 after those tax cuts were passed. (Actually, $4,820 between 2018 and 2023, the last year for which data is available). But what Nunn doesn’t mention is real median household incomes grew almost $7,800 in the five years before those tax cuts were passed.

In other words, Republicans cut federal income taxes and (nonwealthy) Americans still didn’t gain as much money as they did before the tax cuts.

Nunn also claims the American economy “wildly outperformed expectations” after the Trump tax cuts, with a surge of $1.5 trillion in “nominal” growth.

This is a familiar Republican trick. But as the Committee for a Responsible Federal Budget, which advocates for lower federal deficits, pointed out: Two-thirds of this revenue increase was due to inflation “rather than increases in real (inflationadjusted) revenue.”

Note that Nunn doesn’t claim this is real revenue growth like he did with median household incomes. If he had, the numbers wouldn’t look so good.

As for the inflation-adjusted revenue increase, that money came from a one-time post-Covid revenue surge in 2022, which the committee noted arrived five years after the Trump tax cuts were passed.

Meaning one had nothing to do with the other.

Let me just say that Nunn isn’t alone in his cluelessness about the state of Iowa’s economy, nor his dishonesty about the Trump tax cuts — past and present.

Still, no matter which Republican runs for governor, they will push the idea that the GOP trifecta in Des Moines — and Republican control in Washington, D.C. — has transformed the state. And in some ways, I suppose, they’re right. The state has been radically altered.

Once a fairly consistent model of fiscal rectitude, Iowa now is using one-time funds to cover big operating losses.

Our GDP is scraping bottom. Our median household incomes pale in comparison with the rest of the country.

We continue to suffer a labor shortage.

The childcare crisis still looms. One study from a business-friendly group said the shortage of slots had been trimmed by just 9% since 2018!

Meanwhile, pending budget cuts to Medicaid and other health care programs from the Big Ugly Bill — estimated at more than $1 billion a year — threaten the state budget. Not to mention the lives of tens of thousands of poor, disabled and older Iowans.

Also, the USDA just released figures showing the US is headed toward a record agricultural trade deficit in 2025. Not good for a state whose economy still has strong ties to the farm.

Maybe it’s a good thing Zach Nunn is running to keep his job in Washington, D.C., rather than running for governor. Because one thing is clear: He doesn’t have a clue what’s happening back home.

Along the Mississippi is a proud member of the Iowa Writers Collaborative. Please check out the work of my colleagues and consider subscribing. Also, the collaborative partners with the Iowa Capital Dispatch, which provides hard-hitting news along with selected commentary by members of the Iowa Writers Collaborative. Please consider making a donation to support its work, too.

Ed Tibbetts

ALONG THE MISSISSIPPI