Iowa’s state budget deficits are a “fiscal time bomb,” and addressing the problem “before the bomb explodes” will be the top priority if he’s elected governor, Rob Sand told the annual conference of the Iowa Association of Business and Industry (ABI) in Coralville on Thursday.
ABI had scheduled a nonpartisan forum for gubernatorial candidates at its conference, but only Sand showed up. ABI staffed reached out to the leading Republican candidates ahead of Tuesday’s primary to extend an invitation to the winning candidate, and directly contacted the now-Republican nominee Zach Lahn after the primary, but Lahn told them Thursday was too soon after the primary for him to be able to attend the forum.
Sand’s comments at the forum echoed those he made during the 100 town hall-style events he completed during a cross-state tour last year.
“Part of how we have gotten to this position is because we have had too few people in, with too much power, for too long,” Sand said. “They have fallen into temptation, looking out for themselves and their friends. This is not good for Iowa, it is not good for our business environment, it is not good for recruiting and retaining talented people in the state of Iowa.”
Republicans have controlled the governor’s office since 2011, and have controlled both the Iowa House and Senate since 2017. It is that long-term one-party control that puts a government off-track, not Republicans specifically, according to Sand.
“I like to tell people, ‘If you think that the answer to that is to give the other party 10 years of one-party control, I invite you to please visit California, visit New York,’” he said. “The other party having all the power isn’t the answer, because it leads you to the same problem.”
Sand stressed, as he has since the beginning of his run for governor, that he will be working with a Republican-led legislature if he’s elected.
“If that is news to you, good morning,” he said. “You slept in. It’s 2026. There is a supermajority of Republicans in the Iowa House by one seat, there is not a supermajority in the Iowa Senate, also by one seat. That means everything that we do is going to be supported by people in both parties.”
“I think that that is what most people actually want. They will not be able to just do whatever they want, they’re gonna have to come talk to me and explain it in a way that gets somebody like me to say, ‘yeah, seems reasonable.’ Which means that when a budget gets passed, everybody in this room is probably going to be able to say, ‘yeah, seems reasonable.’”
Asked about the sweeping changes made to Iowa’s tax structure in recent years, Sand said, “I think that some of the tax reforms that we have done in Iowa over the last few years have been necessary.”
Sand said he would first have to assess the impact of the various tax changes before proposing any changes.
“Inherently, you want to see where you are before you decide what direction you want to go in,” he told the ABI convention attendees. “A lot of these recent tax changes we’re going to need to understand before we might want to even consider looking at other changes.”
While some of the changes to the tax code may been necessary, others have “also put us in a situation where our number one issue needs to be making sure we’re being careful with that deficit,” Sand said.
“There’s a principle that I have spoken about – and that all of my predecessors as state auditor have spoken about – which is you do not use one-time money for ongoing expenses,” he explained. “And yet, that’s what we have been doing, and we have been doing it year after year after year. I think that that is a problem, and anyone who wants to tell you that that isn’t a problem, they’re either trying to deceive you or they themselves aren’t tuned in to what this looks like in the long term.”
Sand was referring to Gov. Reynolds and legislature agreeing to use funds from the state’s budget surplus and the Taxpayer Relief Fund to cover budget deficits caused by shrinking tax revenues resulting from the tax changes. This year, the state faced a budget deficit of over $1.3 billion. It’s the second year in a row that Iowa has tapped into the surplus and relief fund to cover a budget deficit of over $1 billion.
“This surplus is there because both of the last two presidents have showered money on every state, and now different states have used it in different ways,” Sand said. “Iowa decided to stockpile it, and they’re using that stockpile to pay and cover those deficits. I am not telling you that that is the wrong thing to do. I am telling you that will end.”
That is what the next governor must deal with, Sand said.
“I think it’s really important for us right now to recognize that cliff of savings, that that deficit is about to go out. I would liken it to a fiscal time bomb. The fuse is the surplus. That fuse is burning at a rate of $1.3 billion every year.”
As he has throughout his campaign, Sand pointed to legalizing marijuana for adults as a potential new revenue source for the state.
“Right now, every single day, Iowans are driving to Missouri — they’re driving to Illinois — they’re spending their money there because that’s where they can get legal cannabis,” Sand said. “We should treat it like alcohol right here in the state of Iowa. That would make a tremendous difference for improving our budget situation. It would also mean that we’re keeping those dollars here in the state of Iowa.”
In April, Sand released his plan for marijuana legalization. In an interview with Little Village a few days before his plan was published, Sand called legalizing marijuana for adult use, and regulating and taxing it like alcohol, “kind of a no-brainer.”
“It would help grow our economy, it would help increase personal incomes, we would stop spending money on giving people three hots and a cot just for smoking pot, and it’ll help fill our budget deficit,” Sand said.
He told Little Village the state’s approach to legalization would depend on negotiations with Republican legislative leaders, as with other actions he’d take as governor. But there were two restrictions he would insist on. First, no smoking marijuana in public spaces, which he compared to banning open containers of alcohol in public. The second was a prohibition on selling or advertising candy-like cannabis products, including gummies, because they might appeal to children.
Speaking to reporters after the ABI event, Sand said he was ready to debate the absent Zach Lahn. In a written statement later on Thursday, Sand called for four debates with Lahn ahead of the Nov. 3 election. His proposal called for the debates to take place in Des Moines, Cedar Rapids, Davenport and Sioux City, the centers of the state’s four major media markets.
“Availability for the debates will occur after the conclusion of Rob’s annual 100 Town Hall Tour,” according to the campaign news release. The tour is scheduled to begin in Winneshiek County on June 17 and finish on Sept. 30 in Polk County.
