Report shows if taxpayer dollars were invested locally, they would contribute an additional $1.759 billion to local economic growth.
JOHNSTON, Iowa (Jan. 22, 2026) — On Thursday, the Common Sense Institute (CSI) released its “Keeping Local Tax Dollars Local: A Boon to Iowa’s Economy” report, which showed nearly $2.5 billion in public deposits held by local governments is invested outside of the state. Diverting these dollars away from Main Street and to Wall Street takes away from Iowa communities. If public deposits were instead invested in Iowa’s financial institutions, they would build wealth in Iowa communities. When funds are deposited in a local bank, they are not just collecting dust. That money is protected and accessible, while also being used by the bank to make loans to businesses, homeowners and farmers, contributing to the local economy.
Local governments can and do invest public deposits in the Iowa Public Agency Investment Trust (IPAIT) and the Iowa Schools Joint Investment Trust (ISJIT). Funds invested in IPAIT or ISJIT are subject to potential loss. The report revealed, “According to financial disclosures, when Iowa’s local governments deposit public dollars with IPAIT, the trust deploys about 90% of it into investments outside Iowa’s economy. In FY 2025 none of the funds school districts invested with ISJIT stayed in Iowa-based financial institutions.” In addition, the report showed, “On average, the yield offered by IA-based banks from 2015 through 2025 has been 1.0% higher than the net yield paid by ISJIT and IPAIT.” If public funds were invested in a local bank, they would be protected, benefit Iowans, businesses and local governments, and contribute an additional $1.759 billion to local economic growth.
“We should put Iowa first and keep these taxpayer dollars circulating in our communities,” said Adam Gregg, president and CEO of the Iowa Bankers Association. “Let’s unleash the power of $2.5 billion in capital to create wealth and grow our state.”
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Link to full report: https://www.commonsenseinstituteus.org/iowa/research/taxes-and-fees/keeping-local-tax-dollars-local
About the Iowa Bankers Association
The Iowa Bankers Association represents Iowa banks and savings institutions. Iowa bankers are committed to the values of honesty, hard work and community service, and have been a trusted resource for Iowans for more than 135 years. Iowa banks offer FDIC insurance and lend over $90 billion to help individuals, business owners and agriculture. Nearly 40,000 Iowans work at an Iowa bank, and bank employees volunteer more than 300,000 hours to support local communities each year. To learn more, visit www.iowabankers.com.