A $112 million shortfall in tax revenue isn’t chump change for our cash-starved state. So when the Iowa Supreme Court decided last week to change the tax laws regarding Iowa casinos, forcing the state to pay millions back to casinos, lawmakers and citizens were obviously worried.

But increased budget woes aren’t even the worst part of the Iowa court’s decision. It is appalling how the court defied a unanimous U.S. Supreme Court decision as well as common legal sense. The Iowa court’s decision creates an awful precedent of letting judges meddle with economic decisions normally made by legislators.

Back in 1994, legislators enacted a gambling tax that would tax riverboats at 20 percent while taxing land-based casinos at 36 percent. The racetracks filed a lawsuit, and the Iowa Supreme Court ruled last year that this kind of differential taxation was unconstitutional because it violated the federal Equal Protection Clause.

But then the U.S. Supreme Court unanimously slapped down the Iowa opinion. And for good reason: Legislators have long given tax breaks to particular commercial interests in the name of economic development. The Constitution, said the Supreme Court, “grants legislators, not courts, broad authority to decide whom they wish to help with their tax laws and how much help those laws ought to provide.”

In other words, putting different taxes on similar businesses is OK if there are good reasons to prefer one over the other. For example, it’s hard to justify taxing a case of Budweiser more than a case of Keystone, but lawmakers might want to give tax breaks to microbreweries in the hope of encouraging small local businesses.

Similarly, it’s not difficult to find reasons to differentiate between riverboat casinos and racetrack casinos. Both are places where people gamble, but the latter leaves a footprint in a city’s limits, whereas a riverboat can serve several communities and boost river development. It is up to legislators to vote on whether they want to prefer one type of economic and community impact over another.

But the Iowa judges ignored the U.S. Supreme Court’s opinion in a 5-2 vote on Tuesday. Their na‹ve and simplistic view of casinos have basically trampled over the lawmakers’ freedom to distinguish between businesses.

Judges should be in the business of interpreting the Constitution, not economic development initiatives. The most immediate pain will be a bigger budget deficit, but this type of judicial overreaching will cause even more harm down the road.

As the dissenting opinion in the Iowa court noted, “The majority’s decision causes great harm to the law … and to the balance of power within our government.”