JOHNSTON — State lawmakers are taking “a good first step” in shining more light on government tax credits, but probably could have made deeper cuts to programs that are “off the radar,” Iowa Attorney General Tom Miller said Friday.

Also, Miller said there could be additional criminal charges in a probe his office is conducting of the controversial film tax credit program, but he noted potential liability to the state will not be as great as initially feared.

The Iowa attorney general also reiterated his position that states would have “a very weak case” in challenging the constitutionality of the federal health-care reform and that Iowa would not be joining any legal action to block implementation.

Miller made his comments during and after a taping of Iowa Public Television’s “Iowa Press” show.

In discussing state tax credits that currently top $500 million for a variety of purposes that include business development, research and filmmaking, Miller expressed concern that the programs need “special scrutiny” because many are self executing tax breaks involving large sums of money.

“It’s a little bit like out of sight, out of mind,” Miller said.

Lawmakers this week sent Gov. Chet Culver legislation that capped, suspended and scaled back some tax credits while establishing a review process for most tax credit programs over the next five years. 

Backers hoped to trim $115 million but a legislative fiscal note pegged it closer to $66.5 million over three years.

Senate File 2380 lowered the cap on certain business tax credits from $185 to $120 million, cut the Iowa Fund of Funds contingent tax credits from $100 million to $60 million and placed more focus on research tax credits to smaller-sized businesses. It also suspended the film tax credit program through June 2013.

“I thought they could have cut more this year in a $500 million pie that is available in this kind of a difficult year,” Miller said. “I think that there’s so much money available, it’s so much off the radar screen. People don’t focus on it.”

The focus on tax credits was triggered by allegations of lax oversight, mismanagement and theft regarding the state’s film tax credit program that resulted in six officials in the state Department of Economic Development losing their jobs.

Miller’s office has brought criminal charges against two filmmakers and their movie companies and former film office leader Tom Wheeler, and he indicated Friday that more criminal complaints could be forthcoming.

“The investigation continues regarding other movies. It’s a possibility. There could be (more criminal charges),” he said.

“When we got involved, we were very concerned about a potential huge liability for the state — hundreds of millions of dollars,” Miller added. “We think we’ve worked through that and there won’t be a catastrophe in terms of the total amount of money paid out.”


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