Rep. Dan Huseman — April 12, 2018
I see the weather service has issued a winter storm watch for our area this weekend, but the several days of warmer temperatures this week have prompted a few more calls for adjournment.
Farmers are eager to get home to their fields and machinery, and just because of the lingering winter, everyone wants to finish up here and return home.
We are inching our way toward the finish line, but there are still a few major items to deal with, including tax reform and the state budget.
Sometimes it seems like the last few weeks of a session are the hardest because there is a lot of down time while members negotiate final deals. Then, all of a sudden, something positive happens, and everything falls into place.
I hope that is the case.
Earlier this week the House also approved on a bipartisan, nearly unanimous vote a bill extending the sunset on the statewide penny sales tax that provides funding for school infrastructure in a fund known as SAVE (Secure an Advanced Vision for Education).
This has been a priority for schools for several years now, making sure the dollars that are used by our schools to maintain and build safe, high quality learning environments that keep pace with changes in technology and student needs.
The original intent of SAVE was to not only to provide a steady stream of revenue for infrastructure that otherwise would have fallen on property taxes, but also to provide direct property tax relief by sending 2.1% of the SAVE dollars to lower the rates on property tax payers in low-property value districts.
The bill took steps forward on this point by increasing the amount from 2.1% to 12%. The impact of this move will be an estimated $2.4 billion in direct property tax relief over the next 30 years.
Most of the aid will go to low-value, high-rate districts, but some will go to all districts across the state for relief.
The bill also created a Career Academy Fund which will provide dollars to districts through competitive grants to create regional career academies meant to get high school students in the pipeline to high-quality, high-paying jobs through classes and experiences related to those careers.
Lastly, the bill also put some accountability on the use of SAVE funds.
Both the building of athletic facilities and the district use of SAVE dollars to back bonding projects will see more transparency as the school board must adopt a resolution and hold a public hearing on these two uses of SAVE funds. Voters will then have the opportunity to petition and stop such projects if they choose.
On Wednesday afternoon, House Republicans released details of the Middle Class Tax Relief Act, a tax reform and tax cut proposal designed to allow Iowans to keep more of their income, while at the same time providing stability to the state budget.
Iowa’s tax code is outdated and complex, and it has some of the highest income brackets in the nation.
Due to tax reform at the federal level, Iowans will pay $1.8 billion less in federal taxes in tax year 2018. However, because Iowa has federal deductibility, Iowans will pay additional state taxes of $107 million.
This money should not be used to grow state government. Rather, it should be returned to the hard-working taxpayers who deserve some relief.
The purposed legislation will reduce the state tax burden on Iowans by $1.3 billion over five years while protecting the state budget.
There are a lot of components to the bill, so I will just list a few highlights.
First of all, there are no changes in corporate income taxes and no changes to federal deductibility. It expands 529 education savings plans to include K-12 education.
The bill also couples with the federal government on a number of items including teacher education expenses and the earned income tax credit calculation. It also increases Section 179 limits.
Finally, the legislation deals with the fairness issue regarding online sales.
The bill is a good piece of legislation that is well thought out. Obviously, it will change before we are done, but it is a good starting point.
You may reach me at the Capitol during the week by phoning me at 515-281-3221, or my home is 712-434-5880. You may write me at the State Capitol, Des Moines, Iowa 50319.
My home address is P. O. Box 398, Aurelia, Iowa 51005. If you have email, please contact me at dan.huseman@legis.iowa.gov.
