From Senator Amanda Ragan –
A perfect credit rating and strong budget make Iowa one of the best run states in the country. As your state senator, I am committed to keeping Iowa’s finances in good shape.
I am proud of the bipartisan efforts of the Legislature to balance the state budget without raising taxes and set aside money for a rainy day. We use caution when determining how much to spend by looking at recent revenue estimates from a nonpartisan panel of experts and budgeting in a conservative manner.
With this approach, Iowa is expected to have a budget surplus of about $735 million when this fiscal year ends on June 30, 2015. We also have $696 million in our Cash Reserves and Economic Emergency funds, the largest amount in state history. These rainy day funds, equal to about 10 percent of our state budget, are among the strongest in the country, according to the Tax Foundation.
State Auditor Mary Mosiman noted Iowa’s strong fiscal condition in her review this summer of state finances. Auditor Mosiman stated: “Not only has the spending gap been reduced to $171 million, but we now have a surplus of almost $750 million, in addition to our reserve funds which are full. The fiscal discipline of the last few years is paying off, and we need to ensure it continues.”
Iowa consistently earns the best-possible credit rating from Standard and Poor’s, which means the state has an “extremely strong capacity to meet financial commitments” in full and on time. This strong credit rating, in addition to our well-managed budget and low debt, put Iowa among the top three best-run states in the nation, according to 24/7 Wall Street.
LOCAL BUSINESSES GET A TAX CUT THIS MONTH
Iowa’s fiscal responsibility has allowed us to cut property taxes and still end the fiscal year with a budget surplus. Senate File 295, approved in 2013, included the largest property tax cut in Iowa history. Iowa homeowners, farmers and businesses will save nearly $3.9 billion in property taxes over the next 10 years. A key goal of the bipartisan legislation is encouraging new jobs and business growth by reducing taxes on commercial properties, which have been taxed at about twice the rate of residential properties.
The commercial property tax cut will have its first impact by reducing property tax bills this month. Every business gets a tax break, with a bottom-up approach that targets help to our small and Main Street businesses which are Iowa’s biggest job creators. When fully phased in, two-thirds of Iowa commercial properties will have their taxes reduced to the same rate as residential properties.
Local businesses will see big savings. In Butler County, 544 business owners will see a total cut of $301,944 in their property taxes. In Cerro Gordo County, 1,020 business owners will get a total cut of $691,749 in their property taxes. More than 500 Franklin County business owners will save $291,534.
This commercial property tax cut helps Iowa’s small businesses more than giant, out-of-state corporations. In addition, we made sure local services will not suffer by having the state reimburse local governments for the entire amount of the commercial property tax cut.
To receive this tax credit, businesses must file a one-time application. More information is available through your local assessor or the Iowa Department of Revenue at www.tax.iowa.gov/2013-property-tax-reform.
