ITR: Adjournment hopes dashed

Income TaxBy Iowans for Tax Relief


There was substantial hope that the Legislative session would adjourn last week.  As we reported in the previous Watchdog, there were rumors of an education funding compromise and it appeared Legislators might be able to finish what was left of the budget work and go home on Friday.  However, early in the week it became clear the Legislature would not be adjourning soon.

There are many reasons adjournment fell through last week, despite many Legislators’ readiness to wrap up the session.  One issue that can arise at this point has to do with leadership negotiations.  Most of the work being completed at this time is done by leadership of each chamber to negotiate a final budget number and any other large compromises on key pieces of legislation.  Once leadership has come to an agreement, they each must present the proposal to the members of their chamber from their party, also known as their caucus.  Getting the caucus to agree to vote for the compromise proposal is sometimes easier said than done and can hold up the process.

Also contributing to the stall was Governor Branstad’s request that Legislators create a two-year plan for education funding to prevent running into the same roadblocks next year.  Creating a two-year budget for education is a positive goal that gives Legislators better guidance in how to budget, but it also slows down the negotiations crucial to adjourning.

When the Legislature will adjourn is still a big unknown.  It could happen within the next few days, but it is also possible that budget work will drag on for several more weeks.


Major Pro-Taxpayer Bills Ignored

This session has seen little progress in major pro-taxpayer legislation.  There is no lack of bills but there is a big lack of attention.  The past several Legislative sessions have seen big wins for taxpayers including property tax relief, creation of the Taxpayer’s Trust Fund, and movement toward eliminating the income tax on retirement income.  This year, however, Legislators have neglected much major pro-taxpayer legislation.

Iowans for Tax Relief appreciates the many Legislators who brought forward good ideas for substantial tax relief and reform.  We know many hours of hard work were put into drafting helpful pro-taxpayer bills.  ITR is disappointed that both Houses ignored most of this good work and did not even seriously consider most of these pro-taxpayer proposals.

There are still opportunities for pro-taxpayer legislation to be passed this session.  HF 124 is a bill that would allow Iowans to continue to make contributions to educational savings plans (529 plans) for a given year until April 15 of the following year.  This is the current practice for retirement savings plans.  It should be common sense to treat educational savings plans the same way.  The House of Representatives passed this bill on a 94-1 vote.   It has passed a Senate Ways and Means Subcommittee, and is currently waiting to be debated by the full Senate.

Another pro-taxpayer bill is HF 631.  This bill would create tax-exempt, first-time homebuyer savings accounts in Iowa.  The House passed it by a 91-7 vote.  It is now sitting in a Senate Ways and Means Subcommittee.

It is a shame that there has been no significant tax reform or relief in this long Legislative session.   While HF 124 and HF 631 are helpful for taxpayers, they are small steps.  Taxpayers deserve more from their elected officials.  Passing a responsible budget that spends less than the state takes in is an important goal, but Legislators need to make the taxpayers a higher priority next year!