by Art Smith | Feb 4, 2013
The Des Moines Register’s editorial this morning provided a concise (for Democrats) explanation about why Iowans should not get their $800 million over-payment returned to them. Â It’s to be expected that now that there is extra revenue coming in, we see the Left drooling over the opportunity to spend our money.
It’s a wonder we managed to survive the past few years with so little money to spend.
But seriously, we did just fine. Â And that should be the point now. Â We’ve managed to do a great job of assessing where the government is spending money it doesn’t need to be spending, and cut some of it back (there’s more to cut, but we’ll leave that for another time). But even though we have one of the lowest unemployment rates in the country and a surplus in the Treasury, doesn’t mean it’s okay for the state government to keep the extra money from Iowans from last year.
We don’t operate our state from savings, we operate it from revenue. Â Well, except for when we borrow, but let’s not quibble over that today.
The Register puts a number of items up for spending that are long-term expenses… they aren’t a leaky roof, as they try to relate it, but they are the lawn, the car upkeep, the utility bills. Â They may even be things we should do and pay for, but if we are going to expand our expenses (which should be questioned regardless), the money for those things should come from current revenue, not savings. Â Otherwise, we are making the same mistake we’ve made time and again in the past by paying for ongoing expenses with one-time resources. Â It’s a foolish mistake. Â It’s like taking your year-end bonus and paying the light bill and getting an oil change. Â If your budget doesn’t allow you to pay for those things from your existing income, you are not in good financial shape to begin with.
If the I-JOBS program of Culver’s last 2 years in office had waited until this money was available, I could accept the idea of spending it on that kind of a project. Â But alas, we were far too impatient and had to instead saddle our next generation with keeping the gambling enterprises alive in order to pay for this program.
And the Register can’t help but show how they have bought into the ridiculous notion that government jobs bring value. Â The only kind of jobs that bring value to the economy are those that contribute to the Gross Domestic Product (GDP)… that is, jobs that actually generate income by creating products or services that people want to buy. Â Government jobs don’t do that, and instead are a drain on GDP.
We don’t really have a pressing one-time financial need in Iowa, aside perhaps for some infrastructure such as bridges and roads, that the state government needs to attend to, although I’m sure some think otherwise. Â There may be plenty of recurring expense needs that need attention (either to add or drop), but using this surplus to cover the lack of revenue for these items is foolish.
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I take a bit of exception to the idea that HF1 provide the people’s money back to them as a tax credit for 2013 taxes. Â I realize that the printing and mailing of checks is an expense, but the money needs to get to Iowans now, not a year from now. Â We’ve done it before, we can do it again. Â Mail out the checks.
Obviously, lawmakers want to keep the interest on that money, eh?
by | Jan 8, 2013
One of the top three priorities for the upcoming legislative session will be finally putting something on the books to bring Iowa’s commercial property tax rate in line with the rest of the nation. After much angling by both sides last year, ultimately no adjustments were made to the tax code.
Below you will find a very brief recap and analysis of the three plans that were on the table last year.  They are important to know since past will certainly be prologue in this debate. Both sides are essentially pushing the same proposed solutions as they did a year ago—and one way or another the law will reflect whichever side wins on the issue.
Governor Branstad’s Plan (House Study Bill 519)
This plan would reduce the taxable value of Commercial and Industrial property by 5% a year for 8 consecutive years. The taxable value for these properties is currently at 100%, so in 8 years the plan would allow the State to collect on 60% of the valuation instead of the current 100%.
- The cap for increasing valuations on Residential and Ag properties would be lowered from the current 4% a year to 2% a year.
- The first 3 years of the 5% reduction in valuation would be guaranteed, with the additional 5 years of the 5% reduction being subject to the value of commercial property rising in its assessed value.
- To offset the lower revenue being brought in by local governments the State would pay cities money every year. $50 million in year one, $100 million in year two, $150 million in year three. After the third year the amount would be raised an additional $30 million per year until it got to a $240 million backfill. This backfill would then remain on the State’s books every year going forward.
- The proposed money to local governments would be administered in different amounts based on how much a local government was affected by the revenue loss.
Analysis—This, much like the Governor’s education reform, would essentially be an increase in power and control at the State government level. The positive is that, in theory, the local governments would be forced to cut spending as the backfilled money that they receive is projected to be less than the revenue loss experienced by the local governments. In the prior incarnation of this plan the “administered based on need†language was not included, so it is quite possible that the backfill sent to the local governments would in fact not require them to actually cut their budgets—it really would just depend on how different the property valuations were from city to city.
The House Republican Plan (House Study Bill 500)
In many ways this plan has a lot of the same principals as the Governor’s plan. One major differences is that it implements in 14 years instead of 8 (interestingly the House’s prior proposal called for the 8 years that the Governor has now adopted).
- The biggest difference is that instead of paying local governments to offset the revenue loss, this plan would eliminate the 12.5% “2nd effort levy†(and I believe the $5.40 per $1,000 taxable valuation known as the “uniform levyâ€) and instead, by the year 2019, would have the State fund 100% of the per-pupil cost of K-12 education. Note: Right now the uniform levy is taken from property owners statewide and the State pays to take that amount up to 87.5% of each years determined per-pupil cost—the remaining 12.5% is paid by local property taxes taken from inside each district.
Analysis—There are smaller components to this that I did not investigate fully, but in many ways this approach is the same as the Governor’s in that it limits the local governments taxing authority. While the Governor’s plan would take general fund money and give it to the locals, the House plan just takes the responsibility of paying for things that the locals would otherwise have to spend on with local property tax funds (mainly education). Also, like the Governor’s plan, it would not fully offset the drop in local government revenues and theoretically would force local entities to cut the size of their budgets.
Though “local control” is usually a Republican battle cry, in this case it is largely a Democrat argument against the Republican plans. I happen to find the criticism valid—but for different reasons. The Democrats oppose the taking of local control because it would limit the amount that taxes can be raised, I see it more as limiting the decision making of local communities to pursue what their residents think is best (within the broader State law). One of the unresolved issues I have here is how the State paying all of the education funds would play out in terms of funding each school district. I believe the current formula allows a discrepancy range of a $175 per-student from district to district but, given the fact that the State would fund 100% of the burden, the questions exist—would this remain and how so?.
The Senate Plan (SF 522)
This bill passed the Senate last year 46-4. The only 4 to vote against it were Republicans Chelgren, Dix, Whitver, and Sorenson.
- It would tax the first $30,000 of commercial property at the same rate of residential property. This would result in an estimated $555 to $714 reduction for typical Commercial taxpayers (this small amount is one of the reasons that the four Republicans listed above voted against it).
- The plan would top out at a reduction of $6,856 (paltry when you consider that large retailers routinely pay over $500,000 a year in property taxes).
- The biggest distinction from the other plans is that the savings contained in the bill would not be concrete, but instead would be tied to the total revenue amount brought in by the State. Tax relief would only fully materialize as long as the States revenue increased.
- The plan basically offers a $50 million reduction in Commercial property taxes per year, as long as the States revenue increased 4% in that year.
Analysis—In many ways this last bullet point means that it is not really a significant cut in taxes or spending at all, and frankly it’s shocking that only four Republicans voted against it. It has some other provisions that make it, more or less, a way to stop the impending increase in property taxes faced by everyone. The positive here is that it does not affect the local government’s revenue stream or sovereignty (nor does it backfill anything with other State funds). The flip-side is that it does not allow for any reduction in government spending. It basically says that as long as the economy is good and values of property increase we will agree to give you a tax credit to soften the burden of your taxes rising along with the value of your Commercial property.
Stating the obvious here—this proposal is totally insufficient to deal with the size of the problem. What makes this plan ridiculous is that one of the major advantages in a tax reform plan is that businesses will know that lower rates are solidly in place for future spending and hiring. By having a bulk of the tax savings tied to the amount the State brings in in a given year, you are in essence not able to tell a business owner what his rate will be going forward—and clearly uncertainty is a killer for business owners
Overview & Summary
All these plans seems somewhat flawed and I don’t endorse any of them on their merit. Since Democrat votes are needed to pass something, if I had to I would support the House plan. My strong belief is that all three are unnecessarily over-complicated. More than anything they are just moving money around and telling local governments that they can’t raise taxes beyond a certain point—how much you want to bet that this doesn’t stop the same legislature from mandating that the same municipalities do more things every year?
Ultimately my skepticism comes from the fact that these proposals are all about people paying less taxes without putting forth a dollar of specific spending cuts…funny how that works.
![The Harsh Republican Reality of the Fiscal Cliff]()
by | Dec 10, 2012
I break from a majority of Republicans on the current fiscal cliff negotiations and believe the rate increases that Democrats are seeking should eventually be agreed to. More specifically I would support John Boehner signing on to taking the top bracket from 35% to 37-38% (short of the 39.6% Obama wants).
Of course the argument against doing so is the superior one—essentially that the Senate and the President want more money to spend while having not passed a budget in 3 years and having not yet put any real spending cuts or entitlement reforms on the table. But the two Parties have been at a stalemate over this issue for years and in my view the trump card is that last month they held the Senate, picked up seats in the House, and won the Presidency. To me the bottom line is that if a political party never agreed to anything they didn’t think was 100% ideologically or philosophically accurate we would never reach any compromise. This in fact is the definition of compromise, and in light of the election results anyone who thinks Republicans weren’t pushed into a position of forced compromise is fooling themselves.
The reasons for swallowing this bitter pill are multiple. First off, though often times the winner of an election pushes for the passing of legislation saying they ran on it when they really didn’t—that is not the case here. There is no question that President Obama ran on raising taxes on rich people and Mitt Romney ran on lowering rates and capping deductions. Secondly, over 60% of the American people in poll after poll say they want the wealthier among us to pay more taxes. Unfortunately, the alternative of refusing to budge on this issue in favor of tax increases on 98% of Americans is simply not good policy. All sides agree it would be devastating, not to mention it plays into all the awful stereotypes of Republicans and is politically fatal.
Not helpful here is that this whole discussion echoes the earlier scene at a Republican Primary debate where all 10 candidates on stage said they would not take a deal of $10 in spending cuts for $1 of revenue increases—the majority of non-hardliners in this country just flat out won’t deem a political party serious about solving a problem with this kind of position.
Just to be clear, the above is not at all to say I agree with raising any rates, but the facts are the facts. The Democrats have a far stronger hand here—and it’s certainly strong enough to yield this specific tax increase they desperately want.
Looking on the bright side, after suffering the defeat we just had nationally if the only direct price Republicans have to pay is to raise taxes by 2-3% on one bracket in order to get the Bush tax cuts made permanent (until we have a majority to do real reform), then I think one could argue that is not an obscenely high cost. The big part of making this an acceptable outcome is of course what will be given by the other side to reward this concession?
As of now clearly Democrats have not offered anything and are not acting in good faith. Since they don’t have to give on entitlement reform in this situation, essentially Democrats are going to have to agree to hundreds of billions in non-discretionary, non-defense spending cuts. My position is if Boehner gets this in exchange for the small bump in rates, that is an acceptable outcome. If he isn’t able to achieve that—then caving on this position is a major defeat.
The Media Fails Us Again
So far in this “negotiation” Republicans and John Boehner in particular have been getting killed for letting the whole debate revolve around a portion of revenue increase that would fund the government for about 8 days. This is such a great and obvious point, and frankly the shallowness of our national debates in general makes it hard to have much hope for the future of the Republic.
I fully agree with the criticism for Republican leadership losing the messaging war on one hand, but on the other I wonder what more they can do about it. Time and time again they speak of Washington not having a revenue problem but a spending problem, and they certainly are publicly making the case this would fund the government for only 8 days. The reality is that of all the power and influence the liberal media has over this country, perhaps the most lethal and subtle is their ability to decide what the focus of the debate is. For obvious reasons the President wants it to center on a rich vs. poor construct, and low and behold that is exactly what we have.
My Advice To Boehner
If I were advising Republicans I would suggest putting this debate in context by making an obvious point that I have not heard made yet. The absolute proof that we have a spending problem and not a revenue problem is that just to balance the budget in one fiscal year we would have to raise tax revenues by 40%. Yes that’s right, 40% more dollars into the treasury just to get to the point that we are not running a deficit every year—that is without paying down a penny of the $16 trillion in National Debt.
This of course is because in past years we have borrowed 40 cents of every dollar we spent (so far this year it is up to 46 cents of every dollar). The notion that tax rates would have to be raised on the entire country to a level generating 40% more money each fiscal year is so insane that just maybe it could break through the media machine and into view of the population.
The End Game
What’s so frustrating for Republicans, including myself, is how much sense these arguments make and that we can’t even get the Party that controls the majority of our government to even discuss the bigger more frightening picture.
That being said, the reason we have elections is so that each Party can make their case and the people can make their choice. Even though it’s not sound policy, given the fact that this choice has just been made, conceding a few percentage point increase for one tax bracket is not the end of the world.
In spite of all the venom being directed toward the Republican leadership in the House we need to be rooting for them to succeed—which in this case means getting the least destructive outcome in a tough situation.
The post The Harsh Republican Reality of the Fiscal Cliff appeared first on The Conservative Reader.
by | Sep 24, 2012
After talking to a number of Des Moines based candidates in the last few weeks, we head out to Northeastern Iowa to touch base with the Republican candidate for Iowa House District 64, Jim Givant.
The republican side of the ledger in this district was pretty chaotic leading up to the filing deadline, as incumbent Republican Dan Rasmussen opted not to run at the last minute. Oelwein Republican Jim Givant stepped up to the plate and set up a showdown with Democrat Oelwein City Council member Bruce Bearinger. After getting a late start, Givant now has the campaign on schedule and already has sent 4,000 mailers and has signs and banners on the way. For further info on his campaign and positions head to his website at www.givantforiowa.com.
House District 64 is composed of the Southern half of Fayette County and all but the Southeast corner of Buchanan County, with the biggest population centers by far being the cities of Oelwein and Independence.  HD 64 firmly qualifies as a swing district with a Democrat registration advantage of 1,355, and 8,553 Non-Party registered voters. A win by Mr. Givant in November would go a long way in strengthening the Republican majority in the Iowa House.
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#1. What is the feeling on the ground in your district concerning all the races on your ballot this November (presidential included), and give us a brief summary of how your campaign has been going so far?
It is going to be a tough race. Both Romney and Obama visited Iowa recently, both to large crowds of supporters. The current polls show Obama ahead by 2 percent but Iowa is listed as a tossup state. In my county/district local races will also be close. Republicans will need to get involved to turn this election around.
My campaign has had a slow start. I will be getting some signs out and building name recognition. I have a new website at www.givantforiowa.com . In the June primary I received 99.2 percent of the Republican vote which is a good sign. In my district there are a greater number of registered Democrats over Republicans.
#2. As you call on voters in your district, what are the two or three state-level issues that are concerning them the most?Â
A) Property Taxes – There have been many discussions about raising both business and personal property taxes. House speaker Kraig Paulsen stated, that with a 60-40 split in the house, we will need to pick up two seats in the senate to gain a majority to push though the tax reforms that are needed.
B)Â Education – I believe in honoring good teachers, providing them with a competitive salary and the tools they need to teach the students. To serve as an example for the rest. There is also much discussion of leaving the no child left behind mandates and putting more control of Iowa education at state and local levels.
C) Gas Taxes – These need to be regulated, when gas prices go up all prices for goods and services go up accordingly. This is one of the major issues that affect our economy.
#3. Assuming you win in November and enter the Iowa House, what are the three votes that you most look forward to casting and why?
A) Â DOMA – I believe in the bible that it states that marriage is between a man and a woman.
B)   Agriculture issues – Legislation to protect family farmers.
C) Education Reform – As stated previously.
by | Sep 21, 2012
Dave Edwards is the Republican candidate for Iowa Senate District 16, the vast majority of which covers Des Moines and then swings Southeast to include Pleasant Hill.
While there is no getting around the fact that this is a Democrat stronghold (they have double the number of registered voters), if any Republican can win this district it is most certainly Dave Edwards. What makes this race one of the most fascinating in the state this year is that Mr. Edwards is a blue collar, union member who is bringing the fight to Democrats on their turf. He is challenging an incumbent who has already been in the Iowa Senate for 18 years (and was in the Iowa House before that), and few would argue that this particular district is better off than it was two decades ago.
Besides knowing these neighborhoods well, I have seen Mr. Edwards speak on multiple occasions and can tell you first hand that his style and message will resonate. He has displayed courage both by stepping up to run, and by being willing to talk about illegal immigration, which is such an obvious problem that most are scared to talk about. Republicans who live in or near this district need to return the favor, and can do so by visiting his website (click here), and getting involved to any extent possible.
As you will see below, his answers are extremely thoughtful, spot-on, and the case he is making to traditional Democrats is very convincing. The age-old notions of the Republican Party that persist in this part of Des Moines certainly present a challenge, but there is no reason that a message of less government, fewer taxes, and more liberty can’t take root in districts like SD 16.
Simply put, Dave Edwards is the right candidate at the right time to be this messenger. Should he win, the more “buttoned-up” folks at the State House (including Republicans) would be wise to listen to him…but for now lets just hope the voters in his district are truly listening to him.
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1) Being a blue collar, union member Republican running in a heavily Democratic district makes you and your race one of the most unique in the state. Briefly tell us how your campaign is going, and if you are finding folks in your district receptive to the different political solutions you are offering? If so, which ones are resonating?
The campaign is going great. I have talked to literally thousands of people over the last year or so. In my job as a union laborer, I drive a truck all around the city during the day. I have the opportunity to interact with Republicans and Democrats alike. I have grown to understand that the issues we face, we face as Iowans, and not as Democrats or Republicans. The economic hardships that are facing the people of this state are affecting us all – not just one party or the other.
I am talking to all the voters in this district when we are door knocking. Naturally, when I knock on a democrat’s door, they are reluctant to talk to me when they find out I’m a republican. But as we talk, they begin to see that my message is not one of partisan politics. My goal is to be the voice of the working people of this state. I want to work to make Iowa a state where business can thrive and where our citizens can earn a living wage. The legislature shouldn’t be burdening the people of this state with more regulations, and definitely shouldn’t be adding any new taxes, when people can’t pay their bills or feed their families. These are messages that are resonating with the residents of my district.
2) As you are out door knocking and talking to voters, what are the top few issues weighing on the minds of the people in your district? And what are they saying they want done about them?
People in my district are definitely concerned about the economy and their job security. They want to be able to go to work every day, and at the end of the week, have something to show for it. My top priority as a senator will be to alleviate the tax burden on the working people and the businesses of this state.
Iowa is one of the 10 lowest-ranked states in Tax Foundation’s 2012 State Business Tax Climate Index. The ranking is arrived at by looking at all the taxes levied in a state. Iowa is known for high corporate tax rates, high property taxes, high individual income tax rates and high unemployment insurance tax rates – all of which are taken into account in arriving at this poor ranking. That is a very sad state of affairs. The fact that we need to offer tax incentives to get businesses to come to this state speaks volumes about Iowa’s tax climate. Let’s get rid of the incentives and lower Iowa’s total tax burden. If we improve the tax climate in Iowa, we create more jobs and people have more money to spend, thereby improving the quality of life for all Iowans.
Another issue on the minds of the people of my district is illegal immigration. They want the problem dealt with. I believe the existing immigration laws of this state and this nation should be enforced. The illegal workforce here is driving down wages, and placing an extraordinary burden on Iowa’s social safety net . Recently, I have been sharing my belief that the illegal immigrant population in this state is being held in bondage. They are forced to take low-wage jobs with unscrupulous employers who don’t care about the safety of their workers. Because of their low wages, they are forced to live in low-rent housing under sub-standard living conditions and because of their immigration status, they feel they do not have the freedom to report these conditions .This issue is pitting the working class citizens of this state against the immigrant population. But the real problem here is the government’s failure to enforce its own laws.
3) Assuming you are victorious in November and get sworn into the Iowa Senate, what are the three votes that you most look forward to casting, and why?
I have vowed to introduce a bill on day one of the session that will outlaw traffic enforcement cameras. We have got to put a stop to government intrusion into areas where it doesn’t belong, starting with traffic cameras. These cameras are an infringement of privacy and violate due-process laws. The citizens of this state have shown overwhelmingly that they are against these cameras. The fact is, they don’t improve safety. They are being used as a revenue source for municipalities.
Another vote I am looking forward to casting is one in favor of across-the-board property tax reform. This will be a good starting point towards making Iowa more attractive for business and giving our economy a much-needed jump-start.
Lastly, when the republicans gain control of the senate this fall, I really look forward to the opportunity to vote for a new senate majority leader to replace Michael Gronstal!
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The Des Moines Register’s editorial this morning provided a concise (for Democrats) explanation about why Iowans should not get their $800 million over-payment returned to them. Â It’s to be expected that now that there is extra revenue coming in, we see the Left drooling over the opportunity to spend our money.
