From The Desk Of State Representative Guy Vander Linden – January 19, 2012

Guy Vander Linden

Jobs, Savings and Certainty

• The best way to help Iowa’s employers to begin hiring people and investing in their businesses is to do two things: address taxes and keep control of government spending.
• Property tax reform provides savings for individuals and businesses and it provides certainty for those same people as the plan for their futures.
• Controlling government spending by spending less than the government receives demonstrates a commitment to commonsense budgeting and economic health that employers deserve. The threat of higher taxes stops employers from hiring and investing.
• Iowa families and Iowa employers are struggling with this burden as it is impeding job growth and the economic health of our communities
• Any property tax reform plan approved by the Legislature must make sure everyone benefits; homeowners and business owners, and that everyone is playing by the rules.
• Democrats’ insistence on protecting local government revenues continues to be the major stumbling block in achieving a level genuine property tax relief. In fact, the plan approved by the Senate Democrats last year leads to an increase in residential property taxes. We can do better than picking one set of winners in this effort.
• Doing nothing is not an option. The rollback has turned into the roll-up and the burden on homeowners is growing at a substantially faster rate than their incomes. We must address this. The consequence of doing nothing is a huge potential tax increase on all Iowans. The benefit of achieving genuine reform is jobs, savings and certainty.
• Our goal is to have a property tax system and state budget that contributes rather than taking away from economic, family and community health. Iowans deserve quality jobs that will develop into careers. They deserve the peace of mind to plan for their futures.
• Iowa’s employers need a commitment from the Legislature to keep government spending under control; spending more than the state receives sets up individuals and employers for tax increases. They need the certainty that this will not happen.

Property Tax Reform & Relief

• House Republicans are committed to giving the taxpayers of Iowa more of their hard-earned money back. House Republicans will deliver significant relief and genuine reform to all classes of Iowa’s property tax payers.
• Over the last ten years, school rates have increased 60 percent, county rates have increased 64 percent and city rates have gone up 74 percent. Over the same time period, Iowans’ personal income only grew by 46 percent. These out-of-control tax hikes are not sustainable.
• If we do nothing, Iowa taxpayers are looking at a $2.3 billion property tax increase over the next 10 years, with the majority of that falling to homeowners.
• Many legislators speak of reducing property taxes as a campaign slogan but when they get to Des Moines they settle for nibbles around the edges of the bigger problem. This task is not easy but we must break with the past and develop bold and significant solutions.
• Property tax reform affects Iowa’s economy and putting people back to work. Our uncompetitive property tax system is a burden on job creators and prohibits businesses of all sizes from expanding, hiring or even settling on Iowa.
• ALL Iowans deserve relief in their tax bill. Additionally, we must not shift the burden to any class of property.

Myth of the $1 Billion Surplus

• The so-called “surplus” is actually:

– $600 million in one-time cash reserve funds needed to help the state cash flow.
– $250 million in one-time ending balance from this year (FY 12).
– $200 million in on-going revenue growth for next year (FY 13).

• The state budget is really about $12 billion. $6 billion appropriated by the state and $6 billion received from the federal government.
• State law requires that 10% of the budget be set aside in cash reserves and not spent on ongoing operations. This means the $600 million is off-limits for existing and new spending.
• The Legislature can legally spend the $250 million in one-time ending balance money from this year. However, this is a reckless and short-sighted budgeting practice because it builds $250 million of spending the following year with no one-time money to pay for the new spending.
• While the Legislature can spend up to 99% of the projected revenue, it is not required to spend at the level. The economy, federal debt, and anticipated federal cuts that will impact the $6 billion in federal funds receive by the state require commonsense and discipline.

National Guard Tuition Aid

• The Senate approved $1.3 million additional dollars for Iowa National Guard tuition aid for members attending Iowa colleges and universities as thousands of troops have returned home from Iraq and Afghanistan.
• Before spending this money, Republicans want to be certain $1.3 million is the correct amount and that this new expense fits within the budget already approved by Republicans and Democrats and signed by the Governor.
• Iowa National Guard members can be confident that this issue is a priority for House Republicans.