Session Week 2
Fax: 319-355-9954

GOP Moves On Tax Cut

Republican lawmakers checked another item off their campaign-promise list Tuesday by moving toward eliminating the tax on Social Security benefits.

The House Ways and Means Committee voted 18-7 Tuesday to phase out the tax over the next three years.  When fully implemented, the plan will cost the state $52 million to $54 million a year.

Rep. Patrick Shey, R-Cedar Rapids, argued that Iowa must do what it can to retain the stability and wisdom of its elders.

“Iowa has one of the oldest aging populations,” he said.  “It’s our policy, which is particularly noticeable on the borders of the state, that drives our seniors elsewhere.”                     Des Moines Register

Promises Made, Promises Kept: Ways & Means Approves Social Security and Heating Tax Cuts

In order to provide some relief to Iowans, this past Tuesday the House Ways and Means Committee passed House File 1 out of Committee.  This bill helps to eliminate some of the taxes on the heating bills of Iowans.  Republicans are eliminating the sales tax for residential gas/propane/heating oil customers for a two-month period.  The bill will eliminate the sales tax for the gas bills due after March 1 and April 1, which will contain the heating costs for the months of February and March.  This bill only affects residential customers, which is a classification used by utility companies and is not based on a property tax designation.  The fiscal impact of this is estimated at $10.3 million.  However, this can be looked at as a more revenue neutral proposal because the sales tax on these heating sources is based on price, thus the state is receiving a windfall due to this huge increase in cost.  Local option sales tax is also exempted from this bill because local option taxes coincide with sales tax collections.

$25,000 for singles.  Iowa did not couple that change. Therefore, we continued to tax only 50% of the benefits above the threshold.  HF 2 eliminates the tax on Social Security benefits over a three-year period.

The Governor’s Budget Appears . . .

The Governor proposed NO tax relief in his FY 2002 budget.  Republicans campaigned on tax relief and that promise was ratified by Iowa voters in November.  Which is why we passed HF 2 out of committee.  We want to end the unfair tax on Social Security benefits.

The Governor also campaigned on property tax relief, but there is none to be found in his budget.

We appreciate that Governor Vilsack has listened to us the last two years when we objected to moving tuition replacement from the budget.  But again this year, some of his shifts, like robbing $14 million from the Road Fund, are unacceptable.  He prefers laptops for bureaucrats over good roads for Iowans to drive on.

We appreciate that he offered some degree of cuts, but we believe the cuts should be from the Government Budget.  His cuts are to health care and nursing home reimbursement rates paid by the state, items approved just last year that are essential to providing quality care to lesser privileged Iowans.

 Ways & Means Update

Bills assigned in the Ways & Means Committee this week:

HF 48- An act relating to he exemption from the sales and use taxes of heat for use in residential-type dwellings and for fuel used to provide heat for residential-type dwellings.

Bills passed out of the Ways and Means Committee this week:

HF 1- An act relating to the exemption during a certain period from the sales and use taxes of the gross receipts from the sale, furnishing, or service of metered gas and fuel used for heating of residential type dwellings and providing an effective date.

HF 2- An act phasing out the tax on Social Security benefits under the state individual income tax and including a retroactive applicability date provision.

   Week in Review Archives

2001

01-12-01

2000

04-28-00
04-21-00
04-14-00
04-07-00
03-31-00
03-24-00
03-17-00
03-10-00
03-03-00
02-25-00