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HOUSE BILL WILL BOOST ETHANOL,
SOY DIESEL
The
Iowa House passed a series of incentives this week to boost ethanol usage in
Iowa.
The bill,
House File 2754, establishes a partnership between consumers, retailers and
farmers in Iowa to increase the consumption of renewable fuels and decrease the
reliance on foreign oil.
Approximately 8 percent of the fuel currently used in Iowa is renewable, and
the House bill hopes to increase that percentage to 25 percent by the year 2025.
Iowa is the largest producer of ethanol, with 27 ethanol plants up-and-running
by the end of this year. Currently, 80 percent of Iowa drivers use 10 percent
ethanol blend.
The House hopes to increase the use of cars and trucks that can run on an 85
percent blend, or “flex-fuel” vehicles, as they are commonly known. However,
less than 30 retailers in Iowa sell the E85 blend.
Contained within a separate bill,
House File 2759, was $6 million in funding for retailers to begin installing
E85 pumps. A number of tax credits to increase renewable fuel usage were also
included within the bill.
REVENUE ESTIMATING CONFRENCE
INCREASES ESTIMATE, NEW REVENUE NOT NEEDED TO FUND PRIORITIES
On
Friday, March 24, the Revenue Estimating Conference (REC) met and increased the
General Fund revenue estimates for FY 06 and FY 07. The strength of the economy
and corresponding increase in tax collections should not be used as an excuse to
increase the amount of new general fund expenditures.
The December REC estimate for FY 06 was 1.5 percent, which left approximately
$120 million in the ending balance to fund the property tax credits. The REC
upped the revenue estimate for gross receipts to 2.1 percent, not including
another $30.4 million in TouchPlay revenue. The estimate also includes $54.6
million from the federal government due to the Intergovernmental Transfers (IGT)
program, but that money is just passed through the General Fund and does not
increase the amount of net General Fund revenue.
The total increase in net revenue for FY 06 is $90 million more than the
December REC estimate. This will allow the property tax credits to be funded at
last year’s level of $160 million without having to make a transfer from the
Cash Reserve Fund (CRF). (There is a slight increase to the military service
tax credit, due to a bill which was approved by the House extending the deadline
for those who file for the credit.)
The remaining ending balance after the tax credits are funded is split evenly
with $23 million going into the Senior Living Trust Fund (SLTF) and $23 million
deposited into the CRF, filling the CRF to 7.5 percent. There is $24 million
currently in the Economic Emergency Fund (EEF), which leaves it $106 million
short of being full at 2.5 percent. However, if actual revenue exceeds the REC
estimate, one-half of that surplus will flow into the EEF because of the CRF
being filled to 7.5 percent. Since revenue is running above the revised
estimate, there is a very good chance that revenue will exceed the new estimate.
House Republicans believe that the shared priorities of the Legislature and
Governor can be funded within the $280 million in increased spending allowed by
the December REC estimate.
There is plenty of room within the House GOP budget to rearrange the budget pie
to fund the priorities of teacher performance pay, empowerment zones for early
childhood, higher education and salaries for our correctional officers and
social workers. We look forward to sitting down with the Senate and Governor to
identify their priorities and where they would cut in order to fund them.
The bottom line is that the increase in the REC estimates supports the House
GOP budget plan that funds our priorities of education, health care and public
safety while at the same time repaying funds borrowed in past years without
increasing the amount of new General Fund expenditures.
HOUSE WAYS and MEANS COMMITTEE
APPROVES PROPERTY TAX REFORM
On Wednesday, March 22nd,
the House Ways and Means Committee approved
House Study Bill 766, now
House File 2771.
House File 2771 is similar to
House File 847, which was approved in 2005.
This bill is comprised of six major components:|
1.)Ties together the assessment limitation of residential, agricultural,
commercial and industrial property by limiting the percent increase of all
classes to the class of property that has the lowest percent increase under the
allowable 4% limit.
2.)Requires a vote of city council or board of supervisors to occur on increases
in property tax revenues.
3.)States that property related services are funded first if the
city or county has a reduced revenue capacity
4.)Requires a city to implement the statutory transition
for the imposition of city taxes against property to be
annexed if the property is included in a voluntary
annexation application without the consent of the landowner |
5.)Changes the number of signatures required to protest a budget
from at least 100 to at least ¼ of 1 percent of
those voting for the office of governor at the
last general election. This cannot be less
than 10 nor more than 100.
6.)Eliminates County Compensation Boards
The key piece in
House File 2771, is the tying of the assessment limitation for
all classes of property. Currently, commercial and industrial
property owners are taxed on nearly 100% of their assessed
valuation, while residential property owners pay taxes on
approximately 48% of the assessed value.
By tying all classes of property together, the rapid growth of
property taxes on commercial and industrial property is slowed.
This only impacts new growth and new valuations; not
new construction.
House File 2771 would not cause an automatic commercial rollback
to the residential level of 48%. The proposed legislation only
impacts future growth. The rollback can only go down if
there is growth – there must be growth first. This will not erode
the current tax base of local governments, nor will it impact the
current level of revenues collected.
How would
House File 2771 affect taxpayers?
-Homeowners: All factors remain the same for residential property.
Homeowners would not see a property tax increase from this bill
because residential property does not lose the assessment limitation
that it is currently under.
-Agricultural Property: All factors remain unchanged for
agricultural property.
-Commercial and Industrial: Slows the rapid increases on commercial
and industrial property taxes. All classes of property
assessments will move together, either up or down, and no one class
of property will have to carry more of the burden.
VAN FOSSEN
OUTLINES PRIORITIES FOR RE-ELECTION
(DAVENPORT) – Rep.
Jamie Van Fossen, R-Davenport, announced today that he will seek
re-election to the Iowa House of Representatives in Davenport’s
House District 81. Van Fossen, who was first elected in 1996, says
he will continue to be a taxpayer advocate, with job creation and
health care reform as top priorities.
“I will continue fighting for Iowa taxpayers, continuing to make
property tax reform my number one priority,” said Van Fossen, who
chairs the powerful Ways and Means tax-writing committee. “We passed
significant tax reform legislation the past two years, but it saw a
dead-end in the evenly divided Senate. That logjam needs fixed
before our tax system itself can be improved.”
Not to be overlooked in the equation, he continued, is the adverse
affect of Iowa’s high property taxes toward growth and development.
“Too often, property taxes are not at the forefront of economic
development discussions,” he said. “Iowa businesses pay the third
highest property taxes in the country, and Iowa residents pay the 16th
highest. That’s hardly rolling out the welcome mat for anyone
considering a move here.”
Van Fossen steered a bill through the House this year that would
eliminate taxes on pensions and Social Security, something he needs
the Davenport area desperately needs.
“How many of our seniors need to hop over the river before we act?”
said Van Fossen, noting that the bill is mired in the Senate. “This
bill passed with more than 80 votes in the House and if it isn’t
signed into law this year, I will bring it up again and again until
it is. This is too great of a priority to give up on, and I will
stand my ground.”
Additionally, Van Fossen supports pending legislation that will
allow small business owners to pool their resources and drive down
health care costs.
“As costs of health care premiums have escalated, small businesses
cannot keep up,” said Van Fossen. “By allowing employers to group
together their resources, health insurance costs will decrease and
more working families can attain coverage. I believe businesses,
better than government, can offer a health care plan that Iowans
need.”
Van Fossen says Iowa needs to see the global marketplace as an
opportunity, or risk falling behind.
“The global economy is here, and with its great rewards comes even
greater challenges,” he continued. “The number one thing we can do
to compete is to challenge our students in the classroom. Foreign
countries are rapidly progressing in math and the sciences, and Iowa
must remain in the lead by offering a tough and rigorous curriculum
for Iowa’s students.”
Van Fossen cited a number of education reform bills that passed
through the House this year that would give increased accountability
to parents and taxpayers, ensuring their full partnership in a
student’s educational experience.
“Those are the biggest stakeholders,” said Van Fossen. “They should
be fully involved in the process and curriculum.”
Van Fossen made his re-election plans official at the River Music
Experience Thursday night. The General Election is November 7.
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