State Revenue Continues Strong Growth Pattern in February
The nonpartisan Legislative Services Agency (LSA) released the February 2013 revenue report Friday afternoon. Once again, actual state revenue continues to outpace the projections of the Revenue Estimating Conference (REC).
Overall, state revenue for February was 8.7 percent higher than February 2012. For the second straight month, annual revenue growth for Fiscal Year 2013 is running at 9.1%, significantly higher than the 3.3% projected by the REC. In terms of dollars, the first eight months have produced an additional $355.1 million in revenue. The REC projection is for revenue growth of $204.4 million for the entire year.
Personal income tax receipts remained strong, showing a 9.9% increase over February 2012 (or $31.2 million). The growth came from withholding payments and estimated tax payments, which both saw strong increases for the month. Through the first eight months of the year, personal income tax revenue is almost double what the REC estimated – 10.3% actual growth as compared to 5.2% projected growth.
Sales and Use tax was up again in February, although not as strong as the previous month. The 1.8% growth over February 2012 pulled down the annual growth number to 2.9%. The REC projected growth of 3.1%.
Corporate income tax continued to slow down after the strong months at the end of 2012. For the year, corporate income tax is running 10.9 percent ahead of last year. This remains below the REC’s projection of 13.9% growth.
The Revenue Estimating Conference announced that there next meeting will be on March 22. Under state law, the Legislature is required to use the lower revenue figure between the December number and the spring estimate.
2012 Was a Safe Hunting Year for Iowa Hunters
Iowa’s 2012 hunter safety incident report shows no firearm related deaths, 13 injuries and six cases with property damage. This continues a trend seen for a decade. Still, hunter safety advocates know a truly safe hunting year should register zeros across the board.
According to the Department of Natural Resources, many incidents happen when a person becomes fixated on their target to the exclusion of their surroundings. Several injuries this year were self-inflicted.
From the mid-1960s to the mid-1970s, hunting fatalities averaged 13 per year. In the last 10 years, the total number of hunting fatalities was six. Injury rates are also better now.
Anyone born after 1972 is now required to complete a hunter education class before buying a hunting license. A new round of hunter education classes is underway now in communities across Iowa. More are offered ahead of the late fall openers for deer and pheasant season. There were 355 offered in 2012. Those classes are taught by more than 1,200 volunteer instructors, all giving up weekends or weeknights to cover the 10 hours of instruction. There is a big demand for classes and more instructors are needed.
More information is available from the DNR website (www.iowadnr.gov) or local conservation officers.
Longer Driver’s Licenses—Shorter Lines
This week the House Transportation Committee unanimously passed two pieces of legislation that will make renewing a driver’s license in Iowa a lot less time consuming. The first bill, House Study Bill 56, expands the Department of Transportation’s authorization to renew driver’s licenses to include electronic license renewal pursuant to rules adopted by the Department. Current law requires a renewal applicant to pass either a vision test, or file a vision report. Under House Study Bill 56, if an applicant is renewing electronically—he/she can do so without the vision test or report.
The second piece of legislation is House Study Bill 92. This bill extends the validity of driver’s licenses from five years to eight years for drivers between the ages of 17 years, 11 months and 70 years. The fee for the driver’s license does not change because the current law fee is based upon years of validity. The bill also changes the fee for a non-operator’s identification card from five dollars to eight dollars and changes the period of validity from five years to eight years. It also removes a provision that gave non-expiring, non-operator identification cards to anyone age 70 or over.
With these two pieces of legislation—Iowa driver’s license holders will be able to renew less often and without waiting in line at a driver’s license station. Both bills will require rules to implement procedures. The legislation now moves to the House floor for further consideration.
Flat Income Tax Proposal Benefits Middle Income Iowans
House File 3, which creates an alternative flat tax equal to 4.5%, passed the House Ways and Means Committee on a party line vote this week. Iowa’s current income tax system has nine brackets and allows filers numerous deductions. This bill creates an alternative system, a simple flat tax with zero deductions, giving taxpayers a choice between the old or new system.
The 4.5% flat tax proposal includes a standard deduction of $6,235 for a single person or $12,470 for a married couple filing jointly. Taxpayers are allowed to elect each tax year to use the current individual income tax structure or this alternative flat tax.
The nonpartisan Legislative Service Agency (LSA), predicts that close to 39% of all income tax filers would chose this option, with the tax burden reduced on Iowans by close to $400 million dollars. Overall, LSA predicts that the beneficiaries would be concentrated in both the middle-income and higher-income households.
Among age groups, taxpayers aged 45-54 would have the highest share experiencing a low tax liability, followed by households aged 35-44. An estimated 42% of Iowa residents would experience a lower tax liability.
Among income levels, from $30,000 of income to $500,000 of income 43% to 64% of filers would experience a lower tax burden by choosing this alternative 4.5% flat tax. Overall, for all filers, those who elected this option would save on average $819 dollars.
House File 3 will now move to the House Floor for further consideration.
Recap of Week Eight
This week was the first funnel week of session. All bills have until Friday to pass out of committee. If a bill doesn’t make it out of committee, it’s no longer eligible for passage this session. There will be second funnel the week of April fifth. A bill will have to pass out of one chamber and the committee of the other in order to remain alive for the session. Appropriation and Ways & Means are the only committees that are funnel proof.
On Wednesday Morning Sen. Zumbach and I met with local hog producers Dale and Shirley Manternach, Dan and Sarah Gudenkauf, Dave Kronlage and a representative from Farmland Foods. We discussed unloading costs for dead or slow moving hogs getting off trailers at packing plants. Currently, hogs can be euthanized if they aren’t moving fast enough. If hogs were allowed to rest and then be unloaded, farmers wouldn’t have to bear the cost of lost revenue and removal fees.
HF 163 was passed out of the Environmental Protection committee this week. The bill defines the height of a reconstructed dam. It will allow the dam for Lake Delhi to be rebuilt at the previous level. The DNR is currently requiring it to be higher. The bill will be eligible for debate on the floor as early as next week.
I met with Joe Yedlik and John and Kathy Harms at the Capitol this week. They were here representing Jones County with the Association of Iowa Fairs.
I will be on 600 WMT Friday at 4 pm with Bob Bruce. Next Saturday, the 16th, I will be at the Maquoketa Valley REC Forum in Anamosa. It runs 9 to 10:30 am in the basement of the Maquoketa Valley REC office and is open to the public.
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.iowa.gov or by phone at (515) 281-7330.
Sincerely,
Rep. Lee Hein
Lee Hein 