HOUSE APPROVES
FEDERAL REBATE EXEMPTION-
VAN FOSSEN PENSION TAX AMENDMENT FAILS
Thursday, February 28th,
the House unanimously approved
House File 2417, which was sponsored by all 100 members of the House.
House File 2417 exempts the 2008 federal income tax rebate, as enacted
by federal Recovery Rebates and
Economic Stimulus for the American People Act of 2008,
Pub. L. No. 110-185.
I offered the following amendment to
phase out the Pension tax on Iowa pensioners.
H-8052 by Van Fossen. This amendment phases out the state income tax on
pension income. The phase-out is as follows:
-Beginning January 1, 2009, exempts
an additional 20% of pension income from Iowa income tax.
-Beginning January 1, 2010, exempts
an additional 40% of pension income from Iowa income tax.
-Beginning January 1, 2011, exempts
an additional 60% of pension income from Iowa income tax.
-Beginning January 1, 2012, exempts
an additional 80% of pension income from Iowa income tax.
-Beginning January 1, 2013 (and each
year thereafter), exempts 100% of pension income from Iowa income tax.
My amendment
H-8052 failed on a party line vote 54 Democrats voting NO and 46
Republicans voting YES for pension tax relief. To view how your
Representative voted see the House Journal
here.
House File 2417 is necessary because under Iowa individual income tax,
taxpayers can deduct federal income taxes paid during the tax year, which is
adjusted by any federal income tax refund that the taxpayer received. So,
if a bill is not approved that exempts the federal rebate, Iowans would end
up with a nearly $64 million tax liability, just on the rebates.
Information on the Federal
Rebates
Beginning in May, the United States
Treasury will begin sending rebate payments to individuals. The rebate
payments will continue to go out through the late spring and summer.
HOUSE REPUBLICANS WANT FULL DISCLOSURE AND BIPARTISANSHIP IN BUDGETING
Two weeks ago majority party
Democrats released joint budget targets for roughly one-half of the state
budget. However, they have refused to release the entire budget including
the target for supplemental appropriations, standing appropriations and all
of the revenue adjustments and tax increases.
According to the schedule released
by Democrats, budget bills were supposed to be approved by the subcommittees
by the end of this week. Because of the majority party’s refusal to allow
Iowans to see the whole budget picture and the fact that Republicans have
yet to actually see most of the budget bills, House Republicans will oppose
all budget subcommittee bills.
The targets for this piece of the
budget represent an increase of $95 million over FY 08. Surprisingly, four
of the seven budget subcommittee targets appear to be below estimated FY
08. Without a full disclosure of their budget plan, it is unclear if these
reductions are actual reductions or simply the results shifts within the
overall budget. Had the majority party released the entire balance sheet
and acted in a bipartisan fashion there would have been the opportunity for
House Republicans to support some of these budget bills.
The Revenue Estimating Conference (REC)
meets on Friday, April 4, to review and revise the current revenue
estimates. Revenue through Tuesday was 12 percent above FY 07,
significantly above the REC estimate of 6.9 percent. If revenue continues
to run such a high level, the REC could increase the FY 08 estimate. That
would allow the majority party to spend more via supplemental
appropriations, which would not require the notwithstanding of the
expenditure limitation.
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