Session Week 7
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Property Tax Growth Limitation

House Study Bill 666 has been introduced to the Committee on local Government.  The bill will eventually come to the Ways & Means Committee.

Major Goals accomplished by this proposal:
Provide a mechanism to deliver state or local property tax relief to taxpayers.
When state property tax replacement is provided, i.e. mental health cost, replacement dollars will benefit taxpayers.  Creates a system to insure that local option sales taxes designated for property tax relief will benefit property taxpayers as promised.
Establishes additional flexibility for local governments to reduce large ending balances.  Creates a new ability for local governments to utilize an "unspent balance" or unlevied taxing authority to deal with unexpected expenses.  Borrows this concept from school aid formula.  Ending balances for country governments hae grown by over 50% since 1995.  This new concept will encourage a reduction in these unnecessarily large cash reserves.

Creates better predictability and stability for the property tax system.
Eliminates large swings in taxation due to uncontrollable valuation changes.  Rollback, Ag productivity, the current 4% limit, and the ag and residential tie currently cause unpredictable changes in calculations.  This proposal minimizes the impact from valuation changes.  Maintains the current shares of taxes for all classes of property.  No shifting of tax burdens.  Allows city or county budgets to grow based on inflation and new construction.  A revenue limit makes more sense than current rate and value limits.

Reduces incentives to creatively avoid current rate limitations.
Provides new revenue even for cities or counties where growth is not occurring, or where current levy limits have been maximized.  Allows local governments to choose the revenue needed within the limit.  Limits that need to use TIF as a way to create new revenue within cities.  Protects county residents from shifts in taxation caused when expenditures are moved between budget funds.

• Applies to city and county budgets.
• Establishes a base level of spending calculated from actual history.
• Adjusted annually for cumulative inflation, cumulative new construction, and cumulative change in geographic area.
• Removes current rate limitations.  Replaces these with a total revenue limit.
• Limits can be exceeded by voter approval.
• Current valuation limitations remain in place, preventing shifts in taxation between classes of property.

Proposal Enhances Senior Living

Iowa's seniors will have a better quality of life and more options to live independently under a plan passed this week by Republican legislative leaders.  The Senior Living Plan will help keep people home as long as possible by offering more home health care, adult day care, and assisted living care to Iowa's elderly population.  Currently, the main option available to Iowa's elderly is placement in a nursing home.
The focus on the plan is to enhance the quality of life and the choices available to Iowa's growing elderly population.  Currently, Iowa places twice as much of its long term care resources into nursing homes than it does into home health and other forms of care.  In fact, there are few options that support independent senior living.  The Republican proposal would strive to convert many of Iowa's 8,000 unused nursing home beds into assisted living apartments for seniors that don't need full-service medical care.
Legislators anticipate that upon implementation of the Senior Living Plan, Iowans should begin to see reductions in the cost of long term care and more choices in the level of care provided.  Republicans view this as a "win - win" scenario; program quality is enhanced while cost goes down.

Ways & Means Update

There was no action on Bills in the Ways and Means Committee due to the legislative funnel.