During a news conference Thursday morning, House and Senate Republican leaders announced their support for House File 1, a bill that would remove the cap on the $60 million Taxpayer Trust Fund, and create a Taxpayer Trust and Tax Credit Fund. If adopted, the result would be that Iowa taxpayers would receive a tax credit equal to the amount of money in the new fund, determined by dividing same by the number of eligible individual taxpayers. Today, at their news conference, it was estimated that this could approximate $750 per eligible taxpayer.
This all sounds like a neat idea, but hopefully common sense will prevail and allow the legislature to use the “surplus” not by boldly endorsing a tax credit, but rather use the available funds to 1) protect Iowans from property tax increases resulting from boosting basic state aid for Iowa school districts by 4 percent; 2), increasing the Earned Income Tax Credit, which is a pro-family and pro-economic growth tax cut; and 3), cutting property taxes for all Iowa businesses, with a special emphasis on small businesses.
All this comes about because we learned on Wednesday from the Legislative Fiscal Bureau that the state coffers have approximately $850 million in addition to the $500 million contained in the Economic Emergency Fund and the Rainy Day Fund. This was quite a surprise to everyone in the legislature, and probably even the governor’s office.
Personally, I have never been a fan of extra revenue being returned to the taxpayers in the form of a check, or by a credit on the income tax form. I’ve experience this twice before, once on the state level during the Ray administration, and again by the feds just a few years ago. Far, far better that the excess funds be available to meet the absolute needs of the greatest number of our citizens.
Certainly, an example of that is my previously mentioned support for education funding. Our path to a high-wage Iowa future depends on the quality of our local schools. Our children need the skills to take on available jobs, and we must assure new and expanding businesses that our state is committed to education and job training that will build the strongest possible workforce.
Add to this the necessity of providing relief to property tax payers, including residential, commercial and agriculture. With the realization that the state had more in the bank than was imagined, we have an extraordinary means by which the pragmatic use of a portion of the funds could be a great step towards improving Iowa’s economy, schools and tax system.
Rest assured, there will be many opinions on how best to return the money to the citizens of Iowa.
Should you desire, contact me at Box 1271, Newton, 50208, or email me at firstname.lastname@example.org