Category: News

News from the Hill…

We have progressed to the time in session where patience runs short, time runs long and the pressure begins to build.  I truly enjoy serving as the Chair of the Iowa House Ways and Means Committee, but this time of year I get pulled in every direction.  This week was no exception.  I have spent numerous hours this week on HF 510, which deals with E911.  Iowa Code allows a 65 cent monthly charge per cell phone and permits counties to impose up to a monthly dollar charge on landlines.  There are two Federal mandates coming down that will increase the cost of updating the equipment to receive emergency calls.  Technology is changing very fast and now there are ways to transmit data, like texts/photos via 911, but no way to receive the data.  The Federal government has mandated that we must be able to receive the data in two years.  The State has upgraded its equipment and is ready to comply.  However, the local public safety answering points (PSAPs) are struggling to find enough money so they can comply.  There are two ways to pay for these upgrades under current law.  First the counties could impose an additional $2.50 surcharge on land lines second they could borrow the money and use property tax revenue to cover the bond payments.  Neither of these options makes much sense.  The number of landlines is going down and property taxes are already too high.  Therefore, the question still remains on how the local PSAPs are able to upgrade their equipment in time to comply with the Federal mandate.

Last year there was a task force established to bring a recommendation back to the legislature on the best way to solve this problem.  Their recommendations were to get rid of the option for an additional $2.50 surcharge on land lines and equalize the wireless fee up to the dollar.  This makes all phone users equitable have the same charge.  This is very important, because the use of the landlines is going down and it has the highest fee.  Presently, wireless users pay a lessor fee, but they contribute approximately 70% of all emergency calls.  Therefore equalizing the fee on the people who are making most of the calls and are responsible for the equipment update just makes sense.  Presently there is an audit conducted on the wireless fees collected at the state, but there isn’t an audit conducted on the local PSAPs, this is wrong and we have stated that this needs to be done.  I believe that we need to make sure the local PSAPs have the money it needs to comply with the Federal mandate and have the equipment necessary to answer our 911 calls when they come in.  However, I am not convinced that this is being done in the most cost effective manner across the state.  So our bill also asks for a review of all 107 local PSAPs to make sure they are operating in the most cost effective manner.  It is the Legislature’s responsibility to make sure we have the equipment updates in place to be able to comply with the Federal mandate.  Just as important is to make sure they are operating in the most efficient manner and are most cost effective.  Property taxes are too high now and paying for too much of the PSAPs budget.  The cost should be covered by the users not property owners.

 Ed Reform Hanging by a Thread…

There still hasn’t been any agreement reached by the conference committee on the Education Reform bill.  This is extremely discouraging and disappointing.  My personal opinion is this all boils down to one senator who has a big ego and won’t agree to a compromise.  This senator is also a tenured professor, does this tell you anything?  This individual needs to understand that this compromise is not about him, it is about doing what is right for the state of Iowa.  Our students and their achievements are not keeping up with the rest of the country.  It will take additional dollars, which the compromise does, but it also takes accountability.  Just allocating more money is not working.  So doing the same thing over and over will not produce different results.  Maybe the tenured professor should come out into the real world and see how it actually operates.  Our schools, teachers and students deserve better.

“America will never be destroyed from the outside.  If we falter and lose our freedoms, it will be because we destroyed ourselves.”

 – Abraham Lincoln

For more information on these and other bills:  www.legis.iowa.gov

-Tom Sands

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Click Here: Harry Reid and Wal-Mart hope nobody will notice their online revenue raid.

“The drivers of this rush to tax the internet are Wal-Mart and other big retailers that can more easily absorb the costs of collection than can smaller competitors. Also
supporting the bill is Internet giant Amazon, which coincidentally now sells its
own tax compliance service to other merchants.”

News from the Hill…

This week we received the Senate Democrats proposal on commercial property taxes, SF 295.  The bill in its original form provides a property tax credit for businesses on the first $324,000 of value.  But that is only when or if the credit is fully funded.  There needs to be at least a 4% annual revenue growth at the state for the credit to be funded.  Also, the bill relies on the legislature to annually appropriate the amount of money to fund the tax credit.  This credit would be similar to the Homestead tax credit that seldom gets fully funded.  This bill simply does not provide predictable commercial property tax relief.  This bill does nothing to stop the shift that is occurring to the residential property tax payer.  This bill does not bring clarity into the multi-residential living units and finally the bill does not modernize the Telephone Industries.  These are all the reasons why we amended the bill to correct all that was wrong in SF 295.

The House amendment stripped everything in the Senate file and replaced it with our language.  We rolled back the commercial value so it would be taxed at 80% of value when fully enacted.  This provides $339 million in property tax relief.  The state protects local governments with a standing unlimited appropriation to backfill lost revenue.  This would be capped at that same $339 million.   The amendment stops the shift that is occurring to the residential property tax payer, by limiting the present allowed 4% growth to only 2%.  Residential property tax payers pay approximately half of all property taxes in the State.  The House amendment provides additional property tax relief across all classes of property by removing some of the K-12 funding property tax burden off of the property tax payer’s shoulders and placing that at the state.   This alone provides an additional $322 million dollars of property tax relief across all classes of property.   This especially helps property tax payers located in school districts that have less property value in relationship to the number of students they have.

In present law, buildings that have two or less living units are taxed as residential.  Structures that have three or more living units are taxed as commercial.  There are exceptions depending how they are listed.  This creates confusion and a tax inequity between like uses.  The House amendment fixes this problem by establishing a new class called Multi-Residential Property.  After a four year phase-in, this classification would receive the same rollback as residential.  This brings clarity and equity into similar buildings with the same use.

Finally, but most importantly, the amendment modernizes property tax assessment for local exchange carriers.  While local exchange carriers have been under a monopoly-era assessment mechanism, other providers have entered the industry under a deregulated, competitive market and received more favorable treatment in this area.  Under central assessment, a local exchange carrier’s stock and debt, income and attachments are also subject to property taxation in Iowa.  The legislation provides an exemption for personal property/central office equipment, an exemption other carriers have received since the mid-90s.  The bill also provides a rollback of 60 percent phased-in over two years. By providing competitive equity through this legislation, local exchange carriers will be better prepared to invest in providing their customers with improved network service.  I am the floor manager of this bill and this is one of the major priorities of our House Republican Caucus and Governor Branstad.

“The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”   – Winston Churchill

For more information on these and other bills:  www.legis.iowa.gov

-Tom Sands

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