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Category: Political
News from the Hill…
The first bill to the Governor for his signing lowers Iowans taxes and the passage of this bill early in session will save the state approximately $400,000. We have completed our fourth week in session, which is the half way mark for the first funnel date. This week the house had its first debate on the house floor. The first bill debated, HF 110/SF 106, came from the Ways and Means Committee. I assigned this bill to my vice-chair; he is in his first year in the legislature. So this was his first experience in running a bill through the process. HF 110 updates the Code of Iowa to incorporate changes to the federal Internal Revenue Code (IRC) enacted by Congress for the period of January 1, 2012, through January 1, 2013, including the American Taxpayer Relief Act of 2012. The bill did not couple with certain bonus depreciation provisions. The bill passed the senate 48-0 and passed the house 99-0. The bill is heading to the Governor for his signing. This is important for Iowa taxpayers and tax preparers as they are busy preparing tax returns now.
Public Safety…
One of the bills we passed in the House Public Safety Committee this week, HSB 49, is a study bill for establishing a child endangerment offense for the mother of a newborn child who caused an illegal drug to be present in the newborn child’s body, and providing a penalty. This bill passed out of committee with 15 voting aye and 6 voting nay. The intent of this bill is to deter pregnant women from taking drugs and to seek treatment. I am not sure if this bill is the solution, but we all agree there is a growing problem. I voted for this bill in committee.
Drainage & Levee District Consolidation…
This week the House Ag Committee passed HF 49, which is a bill I filed on behalf of the Two Rivers Levee & Drainage Association. HF 49 allows three drainage districts and a levee district to consolidate into one new encompassing district by a unanimous vote. The measure creates a new provision that provides authority for a consolidation of districts governed by elected trustees if the size of the new district is larger than 35,000 acres and it has a pumping station. The purpose for this legislation is to enable greater administrative and operational efficiency of operation of four cooperating existing districts which has been essentially functioning the last several years as if it were one entity, sharing employees and equipment. The bill is drafted to go into effect upon enactment and it is heading to the House Floor for debate.
Revenue Growth Continues…
The Legislative Services Agency released the January 2013 Revenue report on Friday afternoon, and state revenue continues to outpace the official projections.
State revenue for January was 9.0 percent higher than January 2012. For the year, revenue is running at 9.1% growth, significantly higher than the 3.3% projected by the Revenue Estimating Conference last December 12th. In terms of dollars, the first seven months have produced an additional $313.7 million in revenue. The REC projection is for revenue growth of $204.4 million for the entire year. Most of the growth is coming from personal income tax receipts.
Projected Growth to Slow Down…
The monthly survey of business leaders and supply managers conducted by Creighton University shows that growth is expected to be slow for the next three to sixth months. The overall index rose to 53.2 for the month of January, up from December’s 49.5. The index represents a range from 0-100, with values below 50 showing negative movement, values above 50 showing positive growth, and an index of 50 represents neutrality, neither growing nor declining. The Mid-America Business Conditions Index encompasses a nine-state region, including Iowa. While growth may be expected the present growth is not expected to continue. As governments are preparing their budgets this is good information to have. The worse possible practice is to spend everything when times are good, because the cupboard is bare when times get bad.
Let me know what you think…
I always like to hear feedback on issues that are important to you. I can serve you best when I know what is important to you.
“We should measure welfare’s success by how many people leave welfare, not by how many are added.” – Ronald Reagan
For more information on these and other bills: www.legis.iowa.gov
-Tom Sands
http://www.youtube.com/watch?feature=player_embedded&v=wAYLr6u2FyY
Gayle Trotter testifies before Senate Judiciary Committee
http://www.youtube.com/watch?v=_F0icW2-ovk
http://www.youtube.com/watch?feature=player_embedded&v=NyYYgLzF6zU
News from the Hill…
This week was Southeast Iowa Great River Days at the capitol. Part of the group was made up of High School Juniors from the Southeastern Community College Program, M Power U. They gave three different presentations on their position on fuel tax, sales/use tax on purchases of goods over the internet and education reform. While I may disagree with their positions, I think that the young people did a great job in making their presentations and speaking to the audience. I continue to be impressed with the quality of students in the M Power U. This is a great program with good opportunities for those who participate in the program to witness the importance of being involved.
Fuel Tax…
Presently in the Iowa House no bill has been filed to increase the State fuel tax. But there seems to be much discussion with people around the state of Iowa. The discussions people have with me reflect that many different organizations support an increase to the fuel tax, but many people do not. Federal mandated fuel efficiency vehicles have flattened out the fuel tax revenues for the road use tax fund. At the same time inflation is increasing the cost of construction and repair. Some say the only solution is to increase the revenue by a tax increase. That solution begs the question what will we do when that increase is no longer enough? It is unclear what will be done with the fuel tax, but it is clear to me that if the only solution going forward is to increase the fuel tax, that is only short term solution for an ongoing problem. There needs to be better efficiencies in the IDOT planning, there should never be road use tax money used for bicycle trails, there needs to be a better long term plan for a stable revenue stream and finally we should look for ways to decrease some other tax that Iowans pay.
Education funding Presentation…
Wednesday the Legislative Services Agency gave a presentation to the Ways and Means Committee on School Finance Formula Funding Review and the primary focus was on Property Tax implications. State funding to K-12 School aid for this fiscal year is 2.6537 billion dollars or 42% of the state general fund budget. The total amount of Funding for K-12 education from local property taxes equal 2.0646 billion dollars state wide. The per pupil foundation formula that is set by the state is 6,001 dollars for each student. This is arrived at by a mixture local property taxes and state aid, which comes from taxes paid to the state. There is additional funding available outside the foundation formula, which may come from property taxes, income surtax, sales tax and federal aid. Based on the Department of Management’s FY 2012 Estimated General Operating Funds for Elementary and Secondary Education total of $4.887 billion (State/local/federal), the per pupil amount is approximately $10,321. This is the most money taxpayers have ever spent on education.
Federal Income Tax…
On Monday, January 28, the House Ways and Means Committee passed HSB 38, which has now become HF 110. This bill either couples or decouples Iowa Income taxes with the Federal Income Tax changes. The bill that passed couples with all of the Federal changes with the exception of bonus depreciation. Personally I would prefer coupling with bonus depreciation also. However, the state has not coupled with this for several years and our depreciation schedules are all messed up. The impact of conforming to the federal changes resulted in a reduction in state revenues of $24.8 million for FY13 and $35.4 million for FY14. The previous figures do not include bonus depreciation for which the bill does not couple. Bonus depreciation coupling would have resulted in additional reduction of revenue in the amount of $36 million for FY13 and $28.6 million for FY14. While coupling is a reduction to state revenues it is a net gain to tax payers. I always place tax payer’s interest ahead of tax receivers. There seems to be enough people looking out for the tax receivers. The Senate has passed a similar bill out of their Ways and Means Committee on Wednesday, so it appears that one of the chambers will pass their bill out and send it over to the other chamber and the bill can land on the Governor’s desk for signing soon. It is important for our taxpayers and tax preparers know how Iowa will couple with the Federal Tax changes.
“A vote is like a rifle; its usefulness depends upon the character of the user.” – Theodore Roosevelt
For more information on these and other bills: www.legis.iowa.gov
-Tom Sands