Category: Political
News from the Hill…
This week in the Iowa House the Education Conference Committee continued to meet to work out the differences between the Iowa House plan and the Iowa Senate plan. The House set allowable growth for FY 14 and FY 15 at 2% for both years, while the senate plan sets allowable growth for FY 14 and FY 15 at 4%. This was important to the Senate Democrats, while the policy in the House plan was very important to House Republicans and the Governor. In the art of compromise the House Republicans laid out a proposal as follows. We will go up to your allowable growth figure in this way. For FY 14 we will set allowable growth at 2%, and a one-time payment of 2% in 2014, and 4% in 2015 along with acceptance of the House version of the education reform bill. However, Senate Democrats, this is a one-time offer. You want to change the policy, the money starts going down. This takes what is important to all sides and gives everybody a chance to get some of what they want, but not everything. Time is of the essence, it is time to accept the offer and move on. Local School districts deserve an answer.
Compromise…
A settlement of differences by mutual concessions; an agreement reached by adjustment of conflicting or opposing claims, principles, etc., by reciprocal modification of demands.
Capital Gains Exemption…
A capital gains exemption for Iowa businesses passed out of committee on April 9, 2013 with a vote of 23-2. The bill creates a narrow exemption from Capital Gains taxes for employee-owners of Iowa based companies that have been operating for ten years or more. This legislation is modeled after the Nebraska legislation that was passed three years ago. The bill impacts small business owners, middle class, and upper middle class Iowans who depend on their stock investments that have been purchased over the course of their career to fund their retirement. The bill is narrowly tailored to only allow stocks invested in home-grown Iowa-based business to qualify. This bill would help and encourage more of the retirees of these companies to stay in Iowa. We lose too many of some of our best retirees to other states that treat them more fairly with their retirement income. The loss is greater than the taxes they pay, we need them to stay in Iowa communities mentoring young people to be better citizens, volunteering and sharing their experiences with other people in their respective communities.
Property Tax Update…
This may be the year we can finally get some property tax relief and reform. I doubt very much with the divided government, the reform or relief will not be as substantial as I would like. However, I am encouraged to hear key Senators talk about a bill not only passing the Senate, but making it to a conference committee. This is very important for the following reasons. In the prior two years we have passed a several property tax bills in the House, but the Senate never took any of them up for consideration. In the prior two years the Senate has passed only one property tax bill, which we debated, altered and sent it back to them. But they refused to take action on the House amendment to the altered bill. I believe the only road map to a property tax bill making it through both chambers is via a Conference Committee. It takes 51 votes in the House and 26 votes in the Senate for a bill to make it through both chambers. A conference committee is made up of only 10 legislators, five from the House and five from the Senate. It will be easier for ten people to find some common ground than it is for 150.
“I am in politics because of the conflict between good and evil, and I believe that in the end good will triumph.” – Margaret Thatcher
For more information on these and other bills: www.legis.iowa.gov
-Tom Sands
Falcon:
Network news media censoring the news about Obamacare to keep the public from knowing what is coming in the future just like they censor all the Obama news to keep them unknowing and left out of the loop about his lies.
Bozell: ABC, CBS, NBC ‘Deliberately Censoring’ Bad News on Obamacare | CNS News HG
-Caught ’em again
News from the Hill…
One of the phrases that keeps getting repeated here at the capitol is, “This is one of the strangest session years I have seen.” The number of bills that have been filed and moving through the process is greatly reduced from prior sessions. This was the second funnel week and usually committee meetings go into the evening. This year, many of the committee meetings are being cancelled. There is approximately 4 weeks left of session, only one of the budget bills have come over from the Senate. Each year the House starts half of the budget bills and the Senate starts the other half. The House has passed most of the bills we were to begin and the Senate has only passed one budget bill and that wasn’t until April 3. Bills are sitting in the Senate!
Iowa Inheritance Tax…
Iowa does not have an estate tax; it has an inheritance tax for the heirs of an estate. Presently, parents, grandparents, great grandparents, children, stepchildren, grandchildren, great grandchildren and other lineal ascendants and lineal descendants are exempt from Iowa Inheritance Tax. However, all other heirs would have to pay Iowa Inheritance Tax. This can be quite burdensome and result in the liquidation of assets to pay the Federal Estate tax and Iowa Inheritance Tax. This is not right and unfairly discriminates against step grandchildren and step great grandchildren. My personal belief is there should not be any tax on Inheritance. But that does not seem possible to get passed in the Senate. Therefore, we will be moving a bill out of committee that exempts the first two million dollars for each heir and a flat rate for inheritance over two million dollars. But lineal ascendants and lineal descendants would still be totally exempt.
Ways and Means Committee…
One of the bills we passed out of the Ways and Means Committee this week was HSB 225, which is now HF 625. This bill is an act relating to the School Tuition Organization (STO) Tax Credit by allowing the tax credit for contributions made by certain entities, increasing the amount of total approved tax credits. Presently the Tax Credit cap is $8.75 million; this bill raises the cap to $12 million effective for tax year 2014. The bill also amends the STO Tax Credit to allow a contribution made by a partnership, LLC, S Corporation, estate or trust electing to have the income taxed directly to the individual to qualify for the tax credit. This provision of the bill is retroactive to January 1, 2013.
State Revenue Growth…
LSA released the latest 2013 Revenue report Monday afternoon. While actual revenue continues to outpace the projections of the Revenue Estimating Conference (REC), the pace of growth was not as robust as had been seen in the past two months.
State revenue in March 2013 actually fell 5.8 percent or $21.8 million as compared to March last year. Annual revenue growth still remains strong, running at 7.8 percent over FY 2012. This is still above the revised REC projection for the year of 5.2 percent growth.
While some may point to the drop in March revenue as a sign of a slowing Iowa economy, other factors may be the cause. Due to not completing action on federal tax policy until after the New Year, Congress provided a one-time extension on when farmers had to file their taxes. Instead of being required to file by March 1, farmers were given until April 15. This change is believed to be one of the reasons that personal income tax collections fell in March by $34.9 million as compared to last year.
On an annual basis, personal income tax revenue growth is now running below the REC projection. REC has estimated this category will grow by 8.9 percent, while the number through March is 7.6 percent growth. Due to the filing date change, April will present a clearer picture on the personal income trend.
Sales and Use tax also declined in March. Revenue from this category fell by 3 percent over last March. This pulled down the annual growth number to 2.5%. The REC projected growth of 3.1%.
On the positive side, corporate income tax revenue turned positive again in March. Corporate tax collections grew by 12.1 percent over last March. That, combined with the strong end to 2012 has the annual growth rate climbing to 11.1 percent. This is significantly higher than the revised REC projection of 6.5 percent growth for FY 2012.
The individual Income Tax supplies about 50% of the general fund revenues and Sales and Use Tax supplies an additional one 30%. These two categories have a major impact on Iowa general fund revenues.
The conflicting March numbers still have Iowa’s economy growing. April’s numbers will either confirm that this was an anomaly created by Washington or that the state’s strong economic growth of the past two years is starting to moderate.
“We must reject the idea that every time a law’s broken, society is guilty rather than the lawbreaker. It is time to restore the American precept that each individual is accountable for his actions.”
– Ronald Reagan
For more information on these and other bills: www.legis.iowa.gov
-Tom Sands