Republicans Move Property Tax Relief

March 21 st, 2013 Inside This Issue: Republicans Move Property Tax Relief 1 House Moves Ahead of Senate in Budget Process 2 Education Reform Plan Already Underway in Some Districts 3 House Passes Responsible Education Budget 3 House Republicans move Lasting and Real Property Tax Reform Forward 6 Closing Thoughts 7 Rep. Baltimore is shown with Elisabeth Archer, Intern from the University of Iowa College of Law for the Chairman of the Iowa House of Representatives Judiciary Committee Republicans Move Property Tax Relief The House GOP bill, as amended, provides roughly $150 million in genuine tax relief in fiscal year 2015, provides tax relief to all classes of property and prevents any shift to residential property taxpayers. The relief is permanent and provides certainty for business so long-term planning can occur. Once fully implemented, the plan saves the property taxpayers of Iowa over $600 million dollars. Iowa Seniors, who have played by the rules their entire lives, should not be facing the proposition of losing their homes to rising property taxes during their retirements. That is not fair to them and it is irresponsible for the Legislature to allow that to happen. The overall financial and economic health of a community and its residents is at risk if property taxes and left unaddressed and allowed to increase. The goal of House Republicans is to work with the Governor and with Democrats to construct a plan that is significant, permanent and reliable. It is troubling that Democrats continue to dig in and fortify the same positions which proved unworkable over the last two years. Sharply partisan attacks against Republicans may score points with the extreme left-wing fringe of the Democrat Party but do nothing to deliver property tax relief to the hardworking taxpayers of Iowa. 1

Republicans remain determined and continue to put as many tax relief ideas on the table as possible in the hopes that one will break the log jam in the Senate and be acceptable to Democrats. House Moves Ahead of Senate in Budget Process As the Legislature moves toward the end of the session s tenth week, action to build the state s budget moved into a higher gear as the House considered the first budget bills of the year on the House Floor. On Wednesday, the House considered three budget bills - House Files 602, 603, and 604. HF 602 is the appropriations bill for the Department of Transportation, authorizing spending from the Road Use Tax Fund and other funding sources for roads and transportation in the state. The Administration & Regulation budget bill (HF 603) provides the funding for statewide elected officials and other administrative agencies of the state. The Education budget in House File 604 provides funding for the state Department of Education, early childhood efforts through Early Childhood Iowa, and resources for post-secondary education through the Regents, Community Colleges, and the College Student Aid Commission. For Fiscal Year 2015, each of these budgets appropriates 85% of the FY 2014 amount. The other two budget bills that the House is scheduled to start are the Federal Block Grant bill and the Infrastructure (RIIF) bill. The House Appropriations Committee has released the Block Grant bill proposal as House Study Bill 221. Since the bill appropriates federal funds given to the state, the Legislature is required to have a public hearing on the bill. That hearing will be at noon on Monday, March 25 in the Supreme Court chamber. The Senate has agreed to start the Agriculture & Natural Resources, Economic Development, Health & Human Services, Justice Systems, and Judicial Branch budget bills. The Senate subcommittees have moved out the Agriculture & Natural Resources budget bill and the Economic Development budget. The full Senate Appropriations Committee may consider these bills at their meeting on Thursday meeting. In anticipation of Senate action on the budget bills they are starting, the House budget subcommittees covering those areas have been working on their proposals. Work on the Agriculture & Natural Resources, Economic Development, Justice Systems, and Judicial Branch proposals are expected to be completed by the end of this week. Budget Bill Status Chart Budget Bill Administration & Regulation Agriculture & Natural Resources Economic Development Education Federal Block Grants Health & Human Services Justice Systems Judicial Branch Status House File 603 House Floor Senate Study Bill 1245 Senate Appropriations Senate Study Bill 1246 Senate Appropriations House File 604 House Floor House Study Bill 221 - House Appropriations Senate HHS Budget Subcommittee Senate Justice Systems Budget Subcommittee Senate Justice Systems Budget Subcommittee 2

RIIF (Infrastructure) Standing Appropriations Transportation House Transportation, Infrastructure, and Capitals Budget Subcommittee Senate Appropriations Committee House File 602 - House Floor Education Reform Plan Already Underway in Some Districts Two school districts recently voted to implement teacher leadership and compensation structures based on the National Institute for Excellence in Teaching s (NIET) System for Teacher and Student Advancement (TAP), which creates mentor and master teacher roles that provide more support for classroom teachers to help them improve instructional strategies. The TAP program was the basis for the Governor s education reform bill which was passed in amended form by the House in February. Before finalizing the plan, which is tailored to meet local needs, NIET requires that teachers in each school building vote on whether to approve it. The two districts, Central Decatur and Saydel, voted overwhelmingly to adopt the program. In Central Decatur, 87 percent of teachers voted yes. In Saydel, 94 percent of teachers voted yes. Last September, the districts and NIET won a grant from the U. S. Department of Education s 2012 Teacher Incentive Fund to put the teacher leadership and compensation structure in place. The districts have been in the planning stage since then. The goal of the project is to build on the expertise and growth potential of teachers in each school, providing them with support in boosting student achievement and meeting higher academic goals. This will be done by creating mentor and master teacher roles that provide more support for classroom teachers to help them improve instructional strategies. These teacher leaders work with administrators to align professional support with school academic goals and with the needs of each student. As part of the project, the districts will make it possible for teachers who specialize in science, technology, engineering and math to seek more training at local universities. Helping principals become more effective also is a focus of the project. The grant provides $2.3 million for the first two years, with the possibility of nearly $9.6 million total over five years depending upon annual congressional appropriations. Quotes from the superintendent noted the teachers in the district were eager to better utilize the expertise of top teachers to improve instruction and raise student achievement The grant won by Central Decatur and Saydel was one of 35 grants announced last fall by the U.S. Department of Education to improve teacher pay structures, reward great teachers and principals, and provide greater professional opportunities to teachers in high-poverty schools. For more information: http://www.ed.gov/news/press-releases/us-department-education-boosts-district-led-efforts-recognizeand-reward-great-t House Passes Responsible Education Budget Bill The House this week passed a responsible education budget bill that fits within the House s budgeting principles of spending less than the state collects, not using one-time money to fund on-going needs, not balancing the budget by intentionally underfunding programs, and returning unused tax dollars to Iowa s 3

taxpayers. Within those principles the budget targets are created and budget subcommittees begin their work fitting the state s spending in those numbers. House File 604, the FY14/15 Education Appropriations Bill, appropriates $894.9 million in FY14 and $816.4 million in FY15 (85% of FY14) in General Fund dollars for the Department for the Blind, the College Student Aid Commission, the Department of Education, Community Colleges, Vocational Rehabilitation, Iowa Public Television, and the Board of Regents in Fiscal Year 2014. This is an increase of $33.9 million over FY 2013. Among the notable changes from FY13: The Department for the Blind will see a $200,000 increase for the Department for the Blind. This is a step towards restoring the devastating cuts the department endured as a result of the unsustainable budget approved by Democrats resulting in the across the board cut in 2010. This increase will help them maintain services they currently provide. Programs under the College Student Aid Commission see increases that help meet commitments to help fund student tuitions. A $300,000 increase to the National Guard Education Assistance Program was recommended to fund the level needed for returning troops seeking further education. A $1 million increase to the Iowa Tuition Grant helps all students who applied reach the current maximum $4,000 cap. And a new appropriation of $2 million for New Rural Primary Care Loan Repayment will help establish physicians in rural areas that need them. The Department of Education line items see increases for the State Library of $500,000 to help extend library services to Iowans and $5 million to fund a portion of HF 215, this year s Education Reform proposal (the remaining $5.2 million will be in the Standings Bill later in the session). Community Colleges see a general aid increase of $10 million to help keep tuitions down for students while providing much needed workforce training programs. Vocational Rehabilitation will see a $150,000 increase to continue providing services to get Iowans back to work. Additionally, Iowa Public Television receives a $474,000 to continue providing quality programming to all Iowans. The Board of Regents receives a $16 million increase as the legislature does its part to meet the Regents proposal for freezing tuition for students next year. The BOR requested a 2.6% increase to meet that obligation with $5.6 million for the University of Iowa, $4.4 million for Iowa State University, and $6.1 million for the University of Northern Iowa, the legislature delivered. UNI s appropriation also includes an additional $4 million as a request by the Regents to help UNI recover from previous reductions that hit that university harder than the other two. The bill now moves to the Senate for further consideration. While the Senate has released their budget targets, they have yet to release their line-by-line budget detail or move a single budget out of subcommittee. The Senate Democrats are starting the discussion at $964.2 million, which is $70 million over the House s numbers, $50 million over the Governor s proposal, and a $103.2 million increase over FY13. Clearly further discussions are needed before a final budget is presented to the Governor for a signature, but the House will continue to maintain its budget principles as we move forward. 4

Protecting the Privacy of Iowans This week the Iowa House overwhelmingly passed legislation designed to protect the privacy of all Iowans. House File 535 makes the names, addresses and other identifiable information of weapons permit holders private and prevents the release of this information to the general public. House File 535 passed with a vote of 95-3. Additionally, this legislation increased the penalty for those conducting illegal straw purchases of weapons. Under current law, permits to acquire a weapon and permits to conceal and carry a weapon are issued by the Sheriff in each county. Each Sheriff has discretion to determine how permit holders information is published. Some counties have lists available online for anyone to search through, while other counties only release names if they are requested. Either way, permit holders cannot expect to keep their names out of the public view. Several newspapers around the state publish the names of permit holders on a regular basis. Iowans have expressed concerns that publishing these names allow anyone to know who does and who doesn t have a weapon, this puts everyone at risk. When a newspaper in New York published an interactive map with names and addresses of permit holders in the area, several homes on the list were burglarized and weapons were taken from the homes. House File 535 prohibits permit holders names from being released to the general public, however the bill does allows law enforcement to have access for investigative purposes. Sheriff s offices and the Department of Public Safety can release statistical information on the number of permits issued and those rejected, but no personal information may be shared. Personal information not requested by law enforcement may only be released through a court order or with the permission of the individual. Allowing law enforcement access to this information helps keep investigations moving while still ensuring the data is kept private. Additionally, this bill strengthens punishment for those who conduct a straw purchase. A straw purchase is conducted when a person who can legally possess a firearm, purchases one for someone who cannot legally possess a firearm or when someone who cannot legally possess a firearm lies to another about their status in order to obtain a weapon. Under federal law this is illegal and under state law lying on the purchase form is a criminal offense, however, neither federal law or state law are doing enough to stop these straw purchases. Under this legislation, persons involved in a straw purchase can be charged with a class D felony, which has a potential fine between $750 and $7,500 and up to 5 years in prison. The bipartisan work on House File 535 shows how important this bill is for all Iowans. Protecting the privacy of permit holders also protects the privacy of those who choose not to have a firearm. Increasing the penalties on Straw Purchases will provide peace officers in Iowa the tools they need to crack down on these illegal purchases and keep firearms in the hands of law abiding Iowans. House Republicans move Lasting and Real Property Tax Reform Forward Since regaining the majority in the Iowa House, Republicans have shown remarkable persistence in the effort to bring Iowa taxpayers back to the table in the discussion on property taxes. HSB 150 which is a combination of Governor Branstad s property tax plan and a House Republican amendment, was approved the Ways & Means Committee. The House GOP amendment includes a portion of HF 2 that increases the amount of state aid from 87.5% to 95% in the school aid foundation formula. The major portions of the bill include the following: 5

Rollback Contains a 20% rollback of taxable value on commercial, 5% per year over 4 years Would hold TIF districts harmless Provides close to $660 million in property tax relief once fully implemented Assessment Limitation Assessment growth limitation moves from 4% to 2% on ag and residential immediately, while the ag & residential tie remains in effect. After the 20% commercial rollback is fully implemented, three classes of property (Ag, Residential, and Commercial) are tied together with a 2% assessment growth limitation. Industrial would mirror commercial and have the same rollback as commercial. Backfill To protect local government from the loss of revenue, a standing unlimited appropriation is created to backfill that loss. The backfill appropriation would be exempt from future across the board cuts Increases the School Aid Foundation support Increases the school foundation funding level from the current level of 87.5% to 95% over 4 years Provides close to $320 million in property tax relief once fully implemented This bill as amended provides roughly $150 million in genuine tax relief in fiscal year 2015, provides tax relief to all classes of property and prevents any shift to residential property taxpayers. The relief is permanent and provides certainty for business so long-term planning can occur. Once fully implemented, the plan saves the property taxpayers of Iowa over $600 million dollars. Iowa Seniors, who have played by the rules their entire lives, should not be facing the proposition of losing their homes to rising property taxes during their retirements. That is not fair to them and it is irresponsible for the Legislature to allow that to happen. The overall financial and economic health of a community and its residents is at risk if property taxes and left unaddressed and allowed to increase. The goal of House Republicans is to work with the Governor and with Democrats to construct a plan that is significant, permanent and reliable. It is troubling that Democrats continue to dig in and fortify the same positions which proved unworkable over the last two years. Sharply partisan attacks against Republicans may score points with the extreme left-wing fringe of the Democrat Party but do nothing to deliver property tax relief to the hardworking taxpayers of Iowa. Republicans remain determined and will continue to put as many tax relief ideas on the table as possible in the hopes that one will break the log jam in the Senate and be acceptable to Democrats. 6

Closing Thoughts Things are continuing to run smoothly as we work hard on your behalf in the Iowa House. With House Floor debates in full swing, you can find the daily chamber schedule of when we will be discussing bills here: https://www.legis.iowa.gov/schedules/meetingslistchamber.aspx?chamber=h&reqtype=s%2csub%2c A%2cI As always, please contact me with any questions or concerns you might have! Have a great weekend! Contact Information At the Capitol: Home: Telephone: (515) 281-3211 Telephone: (515) 709-0325 E-mail: chip.baltimore@legis.state.ia.us E-mail: chip@chipbaltimore.com 7