Earlier this month, the Iowa Supreme Court ruled that Gov. Vilsack’s line item veto of HF683 and 692 marked an improper use of his veto power, having the effect of, among other things, nullifying the “Iowa Values Fund,” a $500 million economic development plan composed of targeted grants and guaranteed loans to businesses who invest in the state of Iowa.

Good riddance.

What the Iowa Values Fund represented was nothing less than the fleecing of Iowa taxpayers in order to bribe recalcitrant industries to set up shop in a state with a grossly noncompetitive tax and regulatory structure.

Rather than attempt to make Iowa more competitive, legislators chose to unabashedly pickpocket Iowa taxpayers, redistributing the largesse to favored businesses in the form of handouts, all under the ostensible goal of “economic development.” Of course, subsidizing industries on the taxpayer dime has somewhat less pleasant moniker in politics: corporate welfare, to which the Iowa Values Fund blatantly amounted.

Iowa is in dire need of business investment — there’s no denying that. Yet according to the nonpartisan Tax Foundation, Iowa’s business tax climate ranks 38th in the nation — largely due to its individual income tax rates (the third-highest in the nation) as well as corporate income taxes (ranked 10th highest in the nation).

Iowa does of course have some saving graces — its tax code conformity to the federal code and that of other states is also ranked 10th in the nation. In other aspects of tax competition, Iowa sits near the median with its sales tax (22nd), balance between economic and spending growth (28th) and the average individual state and local tax burden (27th).

Yet while Iowa’s low cost of living and high quality of life make it a choice candidate for investment, its noncompetitive tax rates do nothing but send businesses packing.

If legislators want to encourage much-needed economic growth in the state of Iowa, far more needs to be done than simply bribing friendly industries into Iowa, a policy which neither corrects the deeper structural problems preventing investment or provides fairness to Iowa families and businesses.

Meanwhile, the state has already made several agreements in good faith with businesses which have been overturned by the recent ruling.

As despicable as robbing taxpayers to provide what amounts to naked corporate welfare is, it would be far more reprehensible for Iowa legislators to pull a bait-and-switch now.

The Legislature needs to honor Iowa’s previous agreements — but more importantly, it needs to fix the real impediments to economic growth.