MASON CITY – The Legislature was in full swing during its second week of the 2013 session. Although we had a short week in observance of Martin Luther King, Jr. Day, it was still a very busy and productive week around the Capitol.
We wasted no time in proposing legislation on behalf of Iowa’s hardworking taxpayers. You may recall that when we came into the Majority in January 2011, the state of Iowa had a $900 million budget gap, we were relying heavily on one-time funding to pay for ongoing expenses, and the state’s reserve funds were not filled to their required levels.
Since 2011, we have worked tirelessly to restore fiscal order to state government. Because we stuck to our core principles of commonsense budgeting, which included not spending more than the state takes in, not using one-time funds for ongoing expenses, and not intentionally underfunding our obligations simply to fix the problem down the road, the state has gone from a $900 million spending gap to having an ending balance of $688 million in Fiscal Year 2012.
Our budgets are balanced and we are properly funding the priorities of Iowans. The success of responsible budgeting combined with the improving Iowa economy has resulted in excess revenue. That revenue exceeds what the state needs to operate, which makes it an overpayment by the taxpayers of Iowa. While some can’t wait to use this money to grow government, the proper place for these dollars is back in the pockets of Iowans.
Last week, with the taxpayers of Iowa in mind, we filed the first three bills of the 2013 legislative session. These bills are just the beginning of the work we plan to do to move Iowa forward this session. The bills are aimed at sending tax dollars back to the pockets of Iowa taxpayers.
House File 1 removes the current $60 million annual cap on the Taxpayers’ Trust Fund and then transfers the state’s entire ending balance into the fund. Most importantly, it directs funds from the Iowa Taxpayers’ Trust Fund back to Iowans as a credit that can be claimed when you file your income taxes.
As part of our plan to provide property tax relief to all classes of property, House File 2 increases the state aid portion of the school foundation formula from 87.5 percent to 100 percent. This will lower local property tax rates for all classes of property. According to the Legislative Services Agency, House File 2 would provide $411 million in property tax relief in Fiscal Year 2013.
House File 3 provides options to Iowans when paying their income taxes. Iowans would be able to choose between the current system for paying income taxes or a 4.5% percent flat tax with zero deductions. This legislation would allow Iowans to choose which option makes the most sense for them at that time.
We are serious about giving Iowans more of their hard-earned money back. We will continue to look for more opportunities for Iowa taxpayers to have a seat at the table and move Iowa’s economy forward.