Recap of Week 5
This week I had the pleasure to meet with three area superintendents; Chris Anderson from Monticello, Brian Ney from Anamosa, and Brian Rodenberg from Midland.
On Friday I will be meeting with the Soil Conservation Board in Anamosa and I will tour the Penn Center in Delhi.
This Saturday, the 9th, there will be a forum at the Legion Hall in Ryan at 8:30. Please come and share your thoughts or questions with me.
Saturday, February 18th, there will be a forum at the Maquoketa Valley REC in Anamosa at 9:00 as well as at City Hall in Monticello at 11:00. I encourage everyone to come and share any thoughts you may have on issues concerning our area or state.
Now is the time for property tax reform
Over the last ten years, property taxes collected on a statewide basis for schools, counties and cities have increased over 60%, or over $1.7 billion dollars. Those numbers are truly staggering and the Legislature can’t afford to do nothing.
Residential property taxes will naturally increase in the coming years. Over the next 10 years, property taxes paid by homeowners will increase from $2.3 billion in 2012 to $3.9 billion in 2022 – a 73% increase. This must be addressed.
The 2010 Business Tax index ranked Iowa’s business tax climate 46th out of 50 states. Commercial property in Iowa is taxed at 100 percent of assessed value and is a major drawback to attracting and keeping businesses of all types and sizes.
Property tax reform has been studied and debated for the last 30 years. Now is the time to act. House Republicans have proposed a comprehensive plan with the following principles:
- Rollback commercial property taxes from 100% to 60% over an eight year period with small businesses seeing the greatest benefits first, then large businesses seeing the same benefits by year eight.
- Increase the regular school foundation formula from 87.5% to 100% over an eight year period. This will help mitigate or prevent any shift to residential and provides homeowners with dollar for dollar property tax relief.
- Aligns local government spending with the rate of inflation plus new growth. Local budgets would be tied to a Midwest CPI index, plus net new growth and closely align their spending with the income growth for those who pay for the services.
- Provide backfill dollars for local governments that don’t see growth, to help them adjust and allows local governments to exceed their budget by a vote of the people.
It is a bold plan, and one that if enacted would help spur growth, provide property tax relief to all classes of property while allowing local government budgets to continue to grow, albeit at a more sustainable pace. I sit on the Ways and Means Committee and we moved this bill through this week. It will be debated on the floor in the coming week.
2012 Century and Heritage Farm Program
On Wednesday, February 1, 2012, the Iowa Department of Agriculture and Land Stewardship (IDALS) issued a press release in which Iowa Secretary of Agriculture Bill Northey encouraged eligible farm owners to apply for the 2012 Century and Heritage Farm Program. The program is sponsored by IDALS and the Iowa Farm Bureau and recognizes families that have owned their farm for 100 years in the case of Century Farms and 150 years for Heritage Farms.
Applications are available on the Department’s website at www.IowaAgriculture.gov by clicking on the Century Farm or Heritage Farm link under “Hot Topics.” Applications may also be requested from Becky Lorenz, Coordinator of the Century and Heritage Farm Program via phone at 515-281-3645, email at Becky.Lorenz@IowaAgriculture.gov or by writing to Century or Heritage Farms Program, Iowa Department of Agriculture and Land Stewardship, Henry A. Wallace Building, 502 E. 9th St., Des Moines, IA 50319.
Farm families seeking to qualify for the Century or Heritage Farms Program must submit an application to the Department no later than June 1, 2012. The ceremony to recognize the 2012 Century and Heritage Farms will be held at the Iowa State Fair and is scheduled for Tuesday, August 14th.
The Century Farm program began in 1976 as part of the Nation’s Bicentennial Celebration and over 17,000 farms from across the state have received this recognition. The Heritage Farm program was started in 2006, on the 30th anniversary of the Century Farm program, and more than 500 farms have been recognized. Last year 341 Century Farms and 56 Heritage Farms were recognized.
Democrats’ Budget Spends More than the State Takes In
On Thursday, February 2, Senate Democrats released partial targets for the FY 2013 budget. Unlike the proposals by the Governor and Legislative Republicans, Senate Democrats’ blueprint spends more than the state takes in.
House and Senate Republican budget targets appropriate $6.059 billion from the general fund and $106 million from the Health Care Trust Fund (HCTF). The Governor appropriates $6.244 billion from the GF and $106 million from the HCTF. (The $106 million is the same amount for the HCTF as FY 2012.) Both of these amounts represent a figure that is lower than ongoing general fund revenue.
The Senate Democrats appropriate $6.218 billion from the general fund. While this appears to be $25 million less than the Governor, in reality it is $88 million more than the Governor because the Senate Democrats recommend taking an additional $113 million of tobacco tax revenue and transferring it to the HCTF. The transfer reduces ongoing revenue from $6.251 billion to $6.134 billion.
House Republicans have three budget principles. First, the budget cannot spend more than the state takes in. Second, it should not use one-time money to balance the budget. Finally, it cannot purposefully underfund entitlements like Medicaid and commitments like the property tax credits.
The Senate Democrats’ budget violates the first budgeting principle. Therefore, House Republicans will insist that the final budget spends less than ongoing revenue.
Comparison of Budget Plans
Governor House GOP Senate Dems
Available Rev $6.538 $6.538 $6.538
Ongoing Rev $6.251 $6.251 $6.134
Net Approps $6.244 $6.059 $6.218
Health Care Trust Fund$106M $106 M $219M
Taxpayer Trust Fund $46M $336 M $46M
Amount Over/Under *$7M under $192M under $84M over
*This is the amount the Governor and House / Senate Republicans are under the ongoing revenue. The Senate Democrats’ budget plan spends $84 million more than ongoing revenue.
If you have any questions, comments or concerns about these topics or any others please feel free to contact me by e-mail at lee.hein@legis.state.ia.us or by phone at (515) 281-7330.
Sincerely,
Lee Hein
Lee Hein 