Hite Capitol Update: April 11, 2019

Rep. Dustin Hite (R-District 79)

Rep. Dustin Hite (R-District 79)

by Rep Dustin Hite

With just under a month left of session, everyone is in budget mode at the Statehouse. This means we are proposing and debating many appropriations and ways and means bills because these are the bills that set the budget for the upcoming fiscal year. I believe we have done a good job passing adequate and responsible spending while at the same time ensuring we are not gutting the taxpayer with increased taxation.

Some of the more prominent spending bills that passed this week dealt with the Rebuild Iowa Infrastructure Fund, Administration and Regulation budget, and the Health and Human Services Budget.

The Rebuild Iowa Infrastructure Fund (RIFF) budget invests $24 million in major and routine maintenance for state building and facilities, $5 million for the Broadband Grant Program to increase access to high-speed internet in rural Iowa, and $200 million to improve infrastructure at state facilities and Regent Universities. This funding will ensure we have safe state facilities that we can be proud of.

For the Administration and Regulation Budget, we passed a budget funds the services Iowans have come to expect from their state government. This includes $18 million for IPERS administration to provide retirement benefits to hundreds or thousands of Iowans, $4.7 million for safe health facilities to ensure through inspections of hospitals, and $2 million to update the Department of Revenue’s systems to ensure security for taxpayers.

Along with spending bills, the legislature also advanced some important tax legislation this week. One of the most high-profile bills is actually one that I was the subcommittee chair for and will be the floor manager of when it comes up on the House floor. House Study Bill 165 is a property tax reform bill, and it passed out of the Ways and Means Committee earlier this week. There has been a great deal of confusion and concern around this bill, so I would like to take some time to lay out what this bill does and does not to solve some of the questions you may have.

This bill creates a mechanism to deal with many of the unexpected costs that cities and counties encounter. Under current law, cities are capped at $8.10/$1,000 of valuation, and counties are capped at $3.50/$1,000 of valuation for their general fund and $3.95/$1,000 of valuation for their rural fund. These are hard caps that local governments are not allowed to exceed with the exception of certain supplemental levies. What this bill does is remove these hard caps and put all the general levies and unvoted on levies into one big pot. Then, cities and counties are free to growth this pot how they see fit. This bills also put in a requirement that any increase over 2% requires the public to be notified, and thereafter, the council or supervisors would have to pass a simple resolution to increase the total tax revenue beyond 2% of the previous year. Please keep in mind that any new growth—such as new construction, additions & improvements, expanded boundaries, and properties coming permanently out of TIFF—would not be within this soft cap. Instead, it would be added to the total budget so that we are not restricting the growth of local communities. Any resolution to go over the 2% would be subject to a REVERSE referendum. To trigger this reverse referendum, a petition with the signatures of a number equal to 20% of the people who voted in the last presidential election, a maximum of 2,000 and minimum 10, must be submitted to the city clerk or county auditor within a time period of 20 days. If no petition is submitted, the city or county can press forward. If a petition is submitted, then the council or supervisors have two choices. They can press forward which then would trigger an election of the public on whether or not to approve the increase, or they can go back to down to an amount of 2% increase or less. Please keep in mind that, as I said earlier, any new growth is outside of this soft cap.

This bill has been through many changes to address the needs and concerns that we have heard. First, the original metric for a growth rate, the median family income in the Midwest region, was too erratic to use. It did not allow communities to plan their future budgets. Therefore, we replaced that with a constant percentage (that can be exceeded by the council or supervisors). Second, we heard that a December 31 deadline to have this decided was too early because valuations were not out until January. Therefore, we changed the deadline to January 31. Third, we heard that the deadline to certify a budget, March 15, would be hard to make if an election had to happen. Therefore, we now include an automatic extension if the city or county had to go to an election. Fourth, the original bill did not include any increase over the 2% in the calculation of next year’s growth. This could put a city or county in a situation where they have approved 3% every year for 10 years, and if they go to an election, the public would actually be approving growth of 10% over the base. We changed that so that any increase approved by the council or supervisors, and the people if required, would be built into next year’s base.

Finally, we have received a lot of communication that this affects IPERS and pensions because they are now under the $8.10 cap. As I said before, this bill removes the hard cap, so there is no longer an $8.10 cap. Originally, this was put in the general fund and the general fund would be increased by that amount. IPERS and pensions would not squeeze out other spending. However, my Republican colleagues and I have been absolutely clear that we are not going to mess with IPERS. As written, this bill will not affect IPERS or anybody’s ability to receive IPERS benefits. As Republicans, we are doubling down on that commitment to our public employees and retirees, and I am working on an amendment that he will be offering on the floor which would remove IPERS and other pensions from the general fund, and place them in a separate, uncapped and unvoted on levy like the current system. This is to make absolutely clear to everyone that we value our public servants and want to relieve any concern they may have. They have earned their retirement and they will get it.

The reason we are doing this bill is that we heard from citizens concerned about the increase in their property taxes when their income was not increasing to cover those costs. These citizens would go to their county and city officials to complain, but were told “we didn’t raise your taxes, your valuation just increased.” It is the assessor’s job to assess property taxes, and elected officials’ job to set property taxes. This bill provides transparency because elected officials will need to actually vote to increase taxes. Remember, they are not limited by 2% increases, they just have to take that vote to go over. In addition, this bill provides more local control and allows city and county officials more flexibility than the current system, to address concerns as they arise. We have a few members in our caucus who served on local governments, and they certainly appreciate the flexibility that this would provide cities and counties. This bill is all about local control while still being accountable to the citizens of Iowa.

Finally, I would like to highlight an individual that visited me at the Statehouse. Nyan Baker of Knoxville made a trip to Des Moines to tour the Capitol, meet legislatures, and even see the Supreme Court building. I encourage anyone coming to the Statehouse to reach out to me at dustin.hite@legis.iowa.gov.

Posted by on Apr 12 2019. Filed under Local News, Politics. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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