A new report says Iowa’s ongoing “brain drain” is costing the state hundreds of millions of dollars each year in lost tax revenue. The findings come from the Common Sense Institute Iowa and were discussed on the latest edition of the Iowa Business Report with host Jeff Stein. Researchers say Iowa has struggled for years to retain college graduates, and the economic impact is significant. Ben Murrey, who serves as Director of Policy and Research at the institute, says the state is losing an estimated 766 million dollars annually in state and local tax revenue because so many graduates leave Iowa after finishing school.
“Thinking about this tax revenue difference because of not hitting our retention goals, 766 million dollars a year in state and local tax revenue is lost because we’ve lost so many graduates over the last two decades.”
Murrey says the figure highlights just how large the issue has become. In fact, he notes that the lost revenue now exceeds what the state spends each year supporting Iowa’s public universities.
“The state appropriation for our three regent universities in fiscal year 2026, which is the current fiscal year, is $628 million. So that means the loss in tax revenue from not retaining graduates at the expected level could completely pay for the annual state appropriation for our three regent universities. That’s what’s at stake here. I hope that policymakers, I hope the regents look at Common Sense Institute’s research here and take this question seriously. It’s a legitimate question to say, are our public dollars, our taxpayer dollars, yielding the results that we want to see.”
Murrey says the report is intended to encourage policymakers and education leaders to examine whether current investments in higher education are producing the workforce retention Iowa needs for long-term economic growth.
Learn more from Murrey about the study from Common Sense Institute Iowa by listening to a podcast of the most recent Iowa Business Report, Weekend Edition, at TotallyIowa.com.
Full report from Common Sense Institute Iowa can be found here: https://www.commonsenseinstituteus.org/iowa/research/education/educate-graduate-leave
