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A BUDGET DEAL IS
REACHED!
BIG VICTORY FOR
IOWANS
2006 SESSION ENDS
A deal has been reached! This is a
BIG victory for House Republicans. Mainly it is a BIG victory for Iowans.
Everything we laid on the table last
week, in concert with our Senate colleagues, a tax plan that accelerated the
retirement income tax exclusion to go to $24,000/$32,000 by 2009. We stretched
social security elimination out to 8 years. In short, our cumulative income tax
cut of $118 million.
The House adjourned Thursday, May 4th
– exactly 12:30AM. We ended on the 115th session day fifteen
days into overtime.
Most Iowans were made aware of the
budget deal reached Thursday April 27th, the deal was on an overall
budget number only. Several smaller policy issues had to be settled by the
Governor and the Legislature prior to adjournment. Those issues were settled on
the run as the Legislature worked late into the night on Tuesday and Wednesday
in order to complete its business for the year. The Governor now has 30 days to
sign or veto all the legislation sent to him; he is expected to sign most of it.
The highlights for the Legislature’s
work this year include the following:
- $5.3 billion budget
- Extensive education
reforms and Increased Teacher Pay of $35 Million per year over the next
three years (Moving Iowa’s Rank from 41st up to 32nd
and adding an average of $3,000 per teacher)
- Senior Tax Cut – Phases
out Social Security taxes over 8 years. Raises the income tax exemption
from $9,000 single (S) and $13,500 married (M) to $24,000 (S) and $32,000
(M)
- $15 million for preschool
programs
- $17-18 million for water
quality
- TouchPlay machine ban
- Major Ethanol Bill -
Creates fuel quality standards, ensures that 25% of gasoline sold in the
state by 2020 is renewable and expands access to E-85.
- Putting the required 7.5%
into the state’s Cash Reserve Fund and repaying $50 million to the state’s
Senior Living Trust Fund
With an evenly divided Senate and the
House at a 51-49 Republican majority, I view the 2006 session of the 81st
General Assembly a huge success for Iowa.
When the session began in January, most
people predicted the Legislature would only enact a simple budget, and get out
of town for the campaign season. I would say Iowans will find a lot more was
completed with positive results for the states future generations.
SOCIAL SECURITY
ELIMINATION / 65 AND OLDER INCOME TAX CUT PASSES TO END SESSION
The Crown jewel of our work this year
is the elimination of the tax on Social Security benefits and age 65 (and older)
filing threshold increase!
On Tuesday May 2nd the House
passed
SF 2408 which changes the income tax filing threshold for all Iowa
taxpayers 65-years old (or older) with incomes at or below $18,000 (single
filers) or $24,000 (all other filers) for tax years 2007 and 2008. For tax year
2009 and all subsequent tax years, the income filing threshold will be $24,000
(single filers) or $32,000 (all other filers). (Currently, the income filing
threshold is $9,000 – single filers; and $13,500 – all other filers).
The legislation also eliminates the
income tax on Social Security benefits over an eight-year period. Iowa joins
more than 30 other states that do not tax Social Security benefits. The
phase-out is as follows:
Beginning January 1, 2007, exempts 32%
of taxable Social Security benefits from Iowa income tax.
-January 1, 2008, exempts 32% of taxable
Social Security benefits from Iowa income tax
-January 1, 2009, exempts 43% of taxable
Social Security benefits from Iowa income tax.
-January 1, 2010, exempts 55% of taxable
Social Security benefits from Iowa income tax
-January 1, 2011, exempts 67% of taxable
Social Security benefits from Iowa income tax.
-January 1, 2012, exempts 77% of taxable
Social Security benefits from Iowa income tax
-January 1, 2013, exempts 89% of taxable
Social Security benefits from Iowa income tax.
And finally January 1, 2014 (and each
year thereafter), exempts 100% of taxable Social Security benefits from Iowa
income tax
OPPORTUNITY SCHOLARSHIPS ON THE WAY TO THE GOVERNORS DESK
Another key piece of legislation Opportunity
Scholarships passed this week,
SF 2409 creates School Tuition Organization Tax Credit.
SF 2409 establishes a 65% personal income tax credit for voluntary
contributions to a school tuition organization (STO). The tax credit is claimed
using a tax credit certificate issued by the STO.
For a taxpayer to claim the STO tax credit: a tax credit certificate must be
issued by the STO to which the taxpayer contributed. The tax credit certificate
must be attached to the taxpayer’s tax return and must include the taxpayer’s
name, address, tax identification number, the amount of the contribution, the
amount of the credit, and any other information required by the Iowa Department
of Revenue (IDR).
IDR will authorize an STO to issue tax credit certificates for contributions
made to the STO. Each STO must register with the IDR and include proof of
tax-exempt 501(c)3 status and a list of the schools that the STO serves. Once
an STO has registered with the IDR, the STO does not need to reregister unless
the schools it serves changes.
Annually, each school that is served by an STO must submit to the IDR the
certified enrollment (as of the third Friday of September) and the STO that
represents that school. Each school can only be represented by one STO.
Defines “tuition grant” as “a grant to students to cover all or part of the
tuition at a qualified nonpublic school.”
The total amount of tax credits allowed is limited to $2.5 million in Fiscal
Year 2007 and $5 million in FY 2008 and beyond. |
GREAT SESSION FOR VETERANS
For the first time, the Iowa House has a
standing committee to address veteran’s issues. This
provides veterans with the equal footing they deserve.
The House Republicans proposed, and the legislature followed
through with, three new FTE’s and $190,000 to pay for those
FTEs for the Department of Veterans Affairs. The FTEs are for two
Service Officers and for the Veterans Cemetery director. This is
above the Governor’s level. (HF
2734)
The House Republicans proposed $3.7 million for the National
Guard Educational Assistance Program. This is the same
funding level as last year. (HF
2527)
The legislature passed a bill that establishes an Injured
Veterans Loan Program and appropriated $1.0 million to
the program. The policy bill establishes language that allocates
money to veterans that have been injured within a combat zone. For
every month of medical stay or rehabilitation, the veteran receives
$2,500 up to $10,000. (SF
2312 and
HF 2080)
The legislature passed a bill and the Governor signed that would
put an additional $2.0 million in to the Veterans Homebuyer
Program. This program was started last year, and an early
session supplemental appropriation made sure the program would
continue without skipping a beat. (HF
2080)
House Republicans have proposed and the legislature passed a bill
that fully funds the Veterans Trust Fund by
appropriating money this year from the general fund so that there is
$5.0 million in the trust fund in FY07 and then establishes out year
appropriations of $5.0 million per year until the fund is fully
funded at $50 million. (HF
2797)
House Republicans have proposed and the legislature passed a bill
that establishes a County Veterans Grant Program. The
program would provide up to $10,000 to counties to assist them with
their county veterans programs. The program would require counties
to submit a plan for how they plan to utilize the grant to improve
services for veterans, put up dollar-for-dollar match, and submit a
follow up report stating the impact of the grant on increasing
services to veterans. (HF
2797)
The legislature passed a bill that
provides financial assistance to children that had a parent die
while serving on active duty. Each child upon application may
receive up to $5,500 per year to defray educational expenses. The
bill also appropriates a total of $27,500 from the general fund to
pay for the program. (HF
2792)
The legislature passed and the governor signed a bill that does
not allow individuals causing a disturbance within 500 feet of a
funeral, including an hour before and an hour after the funeral
occurs. (HF
2365)
The legislature passed a bill proposed by House Republicans that
reduces the amount of money required to be in the Veterans Trust
Fund between FY 07 and FY 10 in order to spend the interest.
Between FY 07 and FY 10, only $5.0 million needs to be in the fund
to spend the interest. (HF
2708)
The legislature passed a bill that allows a veteran that was
injured in the line of duty or a POW to receive a reduced priced
Hunting OR Fishing license or a Hunting and Fishing license for
$5.00. Under current law, these same individuals were not allowed
to receive just a hunting license or just a fishing license; if they
did receive Hunting and Fishing license they had to pay $30.00. (HF
2444)
The legislature passed a bill that protects veteran’s
commemorative property. The bill relates to the sale, trade, or
transfer of veterans commemorative property. The bill gives the
Department of Veterans Affairs the responsibility for authorizing
the sale, trade of transfer of this property. It also places
certain parameters around that sale, trade, or transfer. This will
ensure that veterans’ commemorative property is protected. (SF
2333)
VAN FOSSEN A KEY FIGURE IN
INVESTIGATEING SALARY SCANDAL
IN CASE YOU MISSED IT- THIS PRESS
RELEASE WENT OUT LAST WEEK
(DES MOINES) – State Rep. Jaime Van
Fossen, R-Davenport, seen here in a recent legislative Oversight
Committee meeting, has taken a leading role in the investigation of
the Central Iowa Employment Training Consortium (CIETC).
CIETC is an organization that utilizes
federal and state money to oversee the “Promise Jobs,” WIA and
welfare-to-work programs. They are responsible for placing
under-worked and out-of-work Iowans into a stable job.
At issue are the salaries and bonuses
of three CIETC executives, one of which totaled $360,000 in a single
year. All salaries are paid for with public money.
Van Fossen says an amount, more than
triple what the governor earns each year, is unacceptable.
“This organization has the
responsibility of being a good steward of tax dollars, and I intend
to explore why such a gross malfeasance occurred,” said Van Fossen.
“I will champion the taxpayer over a few high-powered Polk County
officials. This issue is simply too important.”
Van Fossen, as a part of the bi-partisan Oversight Committee, has
questioned the salaries of the executives, who have since been
fired. He also is responsible for calling other employees and board
members to appear before the committee.
“It’s unfortunate that we are in this position of investigating
what the Labor Department called the third worst scandal they have
ever seen,” said Van Fossen. “I was elected to serve and protect
the taxpayer, and that is exactly what I intend to continue doing.”
The Oversight Committee is expected to meet throughout the summer
as it continues its investigation into the scandal.
Ways & Means
Update
Bills introduced in committee this week:
HSB 780-
An Act relating to individual income tax relief by providing for
senior taxpayer income tax exclusion and the phasing out of
the income tax on social security benefits and including
effective and applicability date provisions.
HSB 781-
An Act allowing individual income tax credits for contributions made
to certain school tuition organizations and including effective and
retroactive applicability date provisions.
SF 2399-
An Act relating to renewable energy including the renewable energy
tax credit and the wind energy production tax credit and including
an effective date.
Bills passed out of committee
this week:
HSB 780-
An Act relating to individual income tax relief by providing for
senior taxpayer income tax exclusion and the phasing out of
the income tax on social security benefits and including
effective and applicability date provisions.
HSB 781-
An Act allowing individual income tax credits for contributions made
to certain school tuition organizations and including effective and
retroactive applicability date provisions.
SF 2399-
An Act relating to renewable energy including the renewable energy
tax credit and the wind energy production tax credit and including
an effective date.
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