As we approach the scheduled final day of the legislative session (Tuesday) it is unfortunate we are not even close to gaveling out for the session. The budget targets are being delayed due to the House and Senate majority party disputing over their proposed tax plans. The House majority party did a press release for their amended tax plan Wednesday, before showing it to the full House. The minority party would really have liked to play a part in the development of the tax plan that would help hardworking Iowans but were left out of the discussions.
The House majority tax plan would raise the sales tax on some online purchases as well as other services. This would help our local brick and mortar businesses by being on a more level playing field. The proposed tax cuts consist of changing the standard deductions and modifying the state tax brackets as well as other changes. The challenges facing the House majority party is that the Senate majority is not on the same page with them, which is leading to confusion and uncertainty with what the final tax plan will look like. Once both chambers of the majority begin working together we hope to see a clearer picture. Hopefully, that will be soon.
I, like many others, want to see my taxes reduced but understand we must balance the budget. This current tax plan does not balance the state budget and will likely make matters worse. We are still facing a $144 million state “credit card” debt on top of recent de-appropriations totaling $150 million over the last fiscal year. We must start being fiscally responsible and ensure we are providing Iowans with the quality services they deserve. The issues with lack of mental health resources, failures of privatized Medicaid, underfunding K-12 and higher education along with many other shortfalls must be addressed.
HF 2481 passed the Iowa House this week on a bipartisan basis. This bill concerns the SAVE (Secure an Advanced Vision for Education) extension of a 1 percent sales tax that provides a revenue stream for school infrastructure and property tax relief. The current SAVE is scheduled to expire in 2029. School districts have been anxious the past couple of years because an extension beyond that date was needed to ensure that schools keep the ability to publicly bond for future infrastructure improvements. Under HF 2481, the sunset of SAVE would be Jan. 1, 2050. It’s important to be sure that local school districts continue to be able to bond for improvements for construction, repair, demolition work, land purchases and other physical plant needs. The 1 cent sales tax reduces the reliance on property tax levies to fund school infrastructure. It’s estimated that more than $16 billion will be generated with the extension of SAVE. The bill now goes to the Senate where a similar bill is in the Ways and Means Committee.
The money generated by SAVE also helps groups of local school districts develop Career Academies. These facilities have specialized Career Technical Education (CTE) training. An amendment to HF 2481 adds the creation of a Career Academy Fund in the state treasury. The Department of Education may accept federal funds, gifts, grants and other private contributions to go into the fund. The Department of Education will administer the grants, which would pay for infrastructure and equipment for Career Academies. In fiscal year 2019, the SAVE fund would transfer $1 million to the Career Academy Fund.
Contact Breckenridge at 515-281-3221 or wes.breckenridge@legis.iowa.gov