REP. VAN FOSSEN FIGHTS FOR SCHOOL PROPERTY TAX  RELIEF

The following is a press release from Wednesday.

(DES MOINES) – Last night (Tuesday) during the debate on allowable growth, Rep. Jamie Van Fossen offered an amendment which would have granted Iowa taxpayers $31 million in school property tax relief.

Van Fossen and 45 colleagues of the House authored Amendment H-1047 to the state’s K-12 allowable growth bill, Senate File 109.  The amendment would have increased state funding for schools by $108 million and given $31 million in school property tax relief.

The opportunity to debate the amendment failed on a party-line vote with 53 Democrats, including Elesha Gayman, voting against the measure.  Democrats broke a major campaign promise.

“Legislators continually talk about property tax relief, but when it comes to taking action and making real progress for Iowa taxpayers, 53 Democrats walk away,” said Rep. Van Fossen.

After defeating the property tax relief amendment by a vote of 46-53 on a procedural vote, the House unanimously approved the $108 million or 4% increase in school funding for the 2008-2009 school year.

AUDITOR: FISCAL CRISIS LOOMS IF SPENDING LEFT UNCHECKED

Recently, State Auditor David Vaudt released his latest review of the state’s finances.  The bottom line of the review is that spending must be put back in line with revenue or the state will end up in a fiscal crisis.

The first issue that the Auditor raises is a lack of clarity in General Fund spending.  He states that while the General Fund balance sheet shows spending only went from $4.886 billion to $5.028 billion from FY 01 to FY 06, the actual spending went from $4.973 billion to $5.425 billion.  This is due to spending being shifted from the General Fund to other funding sources, including the Senior Living Trust Fund (SLTF).

The Auditor’s next issue is how budgets have been balanced.  For instance, using the surplus to fund the property tax credits is okay when there are budget surpluses but will spell disaster if there is a downturn and there is no surplus.  The Auditor is concerned about the lack of a long term focus on the budget.   

The Auditor states that over the past seven fiscal years, $1.3 billion has been shifted to fund General Fund programs but is not required to be repaid.  Rep. Sands has filed a bill which would require a portion of the surplus be used to repay all funds that were borrowed with the exception of the two that have already been addressed by the Legislature – the SLTF and the Tobacco Endowment.

The next issue that the Auditor is critical of is that the 99 percent expenditure limitation does not apply to supplemental appropriations and is therefore not a true spending limitation.  Rep. Sands has filed a bill to require the 99 percent expenditure limitation to apply throughout the entire fiscal year.

The Auditor gave his recommendations on what should be done to improve the budgeting process:

1. Align revenues and expenditures in same fiscal year.
2. Eliminate reliance on one-time and limited-time resources for on-going expenditures.
3. Incorporate a longer-range focus into the budgeting process.
4. Enhance clarity of the budget - set forth the “true total General Fund expenditures”.
5. Consider adoption of a two-year budget.
6. Develop a long-range plan (3 to 5 years) – set specific financial goals and establish timelines.
7. Implement a real spending limitation - 99% or 98%.
8. Set a timeline and repayment schedule for the monies borrowed from other funds and accounts.

The Auditor does give House Republicans credit for the strides that were made in the past few years -- refilling the reserves to 10 percent, repaying the SLTF, and using fewer SLTF dollars for Medicaid.

The Auditor will be releasing his review of the Governor’s budget recommendations in the coming weeks.  No doubt he will share the concern of House Republicans that the Governor and majority party are spending at a rate that just cannot be sustained in the future.

 HF 14-  A bill for an act increasing the taxes imposed on cigarettes and tobacco products and providing for deposit of the increased revenue generated in the senior living trust fund, and providing an applicability date and an effective date. 

HF 180-  A bill for an act increasing the taxes imposed on cigarettes and providing for appropriation of the revenue generated to the medical assistance program and for tobacco control and prevention, and providing an effective date.

HF 293-  A bill for an act relating to the state earned income tax credit by making the tax credit refundable and including effective and retroactive applicability date provisions. 

HF 297-  A bill for an act providing that any increase in the tax on cigarettes and tobacco products be deposited into the healthy Iowans tobacco trust. 

HF 306-  A bill for an act providing a tax credit under the individual income tax, corporate income tax, franchise tax, or insurance premiums tax for continuation of salary, wages, or health benefit coverage for employees that are members of the national guard or military reserve and are ordered to active duty, and for payment of certain replacement worker costs, and including effective and retroactive applicability date provisions. 

HF 318-  A bill for an act providing volunteer fire fighters and emergency medical services personnel with an individual income tax credit and providing effective and retroactive applicability dates.

HF 322-  A bill for an act relating to a tax credit for pollution-control and recycling property connected to property used for the care and feeding of livestock, and providing for the Act's applicability. 

 HF 326-  A bill for an act requiring combined corporate tax returns for unitary businesses and including a retroactive applicability date provision.

HF 346-  A bill for an act increasing the taxes imposed on cigarettes and tobacco products and providing for deposit of the increased revenue generated in the healthy Iowans tobacco trust, and providing an effective date.

HF 348-  A bill for an act providing for a business property tax credit for property taxes due, making appropriations, and including effective and applicability date provisions.

Bills passed out of committee this week: