Be a Ref, Give a Kidney, Save a Bundle

If states remain eager to grant tax subsidies to bring in businesses, it's hardly surprising that they have also grown more willing to revise their revenue codes to reward favored groups of citizens. Some of the schemes are pretty obvious: Most states have enacted some manner of tax break or tuition assistance plan for National Guardsmen and veterans. The Illinois Senate wants to give doctors a break if they practice in areas that are "medically underserved." Others are more arcane: The South Dakota Senate sustained Governor Mike Rounds' veto of a sales tax exemption on purchases of bull semen, but overrode his veto of a bill to save amateur sports referees from having to pay sales tax at all.

No state has been as eager to find new tax-break schemes as Iowa. First came the idea of ending the income tax for everyone under 30, in hopes of stemming the state's brain drain. Not to neglect the opposite end of the age spectrum, senators mulled a freeze on property taxes for seniors. Then they looked at tax incentives for people buying long-term care insurance and waivers for those living in counties on the border with income-tax-free South Dakota.

State Representative Linda Upmeyer, taking her title as chair of the Human Resources Committee rather literally, sponsored a bill to allow living organ donors in Iowa to write off up to $10,000 in non-medical expenses, such as travel and time lost from work. Upmeyer argued that it would apply to fewer than 60 Iowans a year, and that few of those would hit the $10,000 cap.

That's part of the appeal of these special tax breaks. They are written to be limited in scope and so, sponsors promise, won't cost the state much money. They're also a way of funding something worthy, such as organ donation, without having to dip into depleted general fund accounts. And for conservatives, they perform the dual role of underwriting a pet cause while shrinking the amount of money that comes into the capitol. "Since there's no real money in the treasury any longer and you cannot therefore get an appropriation through," says skeptical Iowa Representative Don Schoultz, "people started doing tax credits and exemptions and refunds to fund things instead."

Whether or not these apple-pie exemptions are good policy, they're very difficult for legislators to vote against once they reach the floor. Leaders sometimes make an effort to block them to prevent a drain on state funds, but often that means confronting a committee chairman who happens to have a pet cause he or she is eager to push through.

But not every group can find its champion. Despite the wide recognition that print journalists are becoming an endangered species due to declining circulation and the Internet, no state has offered us a special tax break. Then again, there's always next session.