Branstad the Republican is in league with Senate Democrats, dumping on taxpayers (he has even tried to outdo them).
These recent legislative updates from Iowan’s for Tax Relief (ITR) indicate (by our interpretation) that Governor Branstad is a big-spending, big- government Republican. His aggressive support for wind and ethanol mandates and increasing the gas tax precede this. ITR explains the situation. Bold emphasis is ours, not ITR.
Monday, February 15, 2016 Session Week 5 Completed
Late last week House Republicans released their budget targets for Fiscal Year 2017, proposing total general fund spending of $7.320 billion which is approximately a 2.00% increase over last year. The House budget proposal is lower than the initial budget proposals of Senate Democrats ($7.408 billion,3.26% increase) and Governor Branstad ($7.412 billion, 3.30% increase).
Each of the budget proposals would grow state government at a faster pace than the household budgets of most Iowans. Social Security recipients received no increase in 2016. Inflation (CPI-U) was up only0.7% in 2015. Personal income of Iowans increased just 1.3% between September 2014 and September 2015. Why should the state’s budget grow at a faster pace than each of those economic measurements?
While Iowa law prudently limits general fund expenditures to 99% of ongoing revenue, the forecasted revenue growth for the state, as provided by the Revenue Estimating Conference, continues to decrease. This is no surprise given the trend of declining prices for grain and farmland in an economy that is dependent on agriculture. The state also has built-in spending increases that must be funded for education, Medicaid, and commercial property tax backfill to cities before decisions can be made on supplemental state aid for K-12 education. Given the funding mandates and slowing economy that Iowa is facing, our Legislators must keep taxpayers and the future in mind before agreeing to spending increases that Iowans cannot afford.
No Movement on Coupling
Even as taxpayers and tax preparers remain in limbo on whether the State of Iowa will couple with federal tax provisions, Governor Branstad and the Iowa Senate have given no indication that they will side with the Iowa House of Representatives and conform Iowa tax law with federal tax law. It is interesting to note that the general fund budget targets of Governor Branstad and the Senate are both over $90 million more than what the House has proposed. That difference is very close to the estimated$96 million that coupling would save Iowa taxpayers. It is a shame that the Governor and Senate are funding their spending priorities by removing an important and dependable taxpayer protection that also doubles as an economic stimulant. Action must be taken immediately to advance the coupling legislation already passed by the Iowa House. Once tax season has passed, it will be too late.
Please contact your State Senator and Governor Branstad now and tell them to pass the coupling bill immediately. You can contact the Governor’s office at 515-281-5211 and the Senate switchboard at 515 -281-3371
Final Coupling Update?
It appears that Iowa taxpayers are going to have a key and consistent taxpayer protection denied them this year, as the Democrat-controlled Iowa Senate appears unwilling to take up the coupling bill already passed by the House of Representatives. This means that small business owners will miss out on the $500,000 Section 179 expensing option and other tax filers will miss out on numerous additional tax extenders that Congress passed for the tax year 2015. In total Iowans will lose $96 million in taxpayer savings. The Senate and Governor Branstad have both indicated that they cannot afford to fund their desired spending increases and allow Iowa taxpayers to receive the same consistent protections that they have received in recent years.
Many tax software programs assumed Iowa would continue their historical trend of conforming to the year-end changes passed by Congress. Please devote extra attention to computing your deductions if you are preparing your own tax returns or consult with your professional tax preparers to ensure that your return will be correct given Iowa’s diversion from past practices.
Thanks Gov.
