By Sen. Shawn Hamerlinck
Special to the Herald
March 10, 2009 10:40 am
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Notice, simply complaining about poor decision making processes at the Capitol is easy and often politicians are able to sustain lengthy careers by mastering that art. Offering realistic solutions to stave off a similar economic downturn which is plaguing Kansas and California is many times more challenging. Understand, in the current fiscal year the state of Iowa does not have a revenue problem. We have a spending problem. Because of the 18 month differential in the taxing and spending structure the country’s economic turmoil will not hit Iowa until the 2011 budget. The decisions we make in this session will determine the severity and duration of Iowa’s participation in a national recession.
Rather than depleting cash reserves for one time expenditures the legislature must employ recessionary tolerant practices which spark job growth and local investment. If our problems are derived from overspending then our first step should be to control expenditures and minimize waste in our current departments. Senate File 102, which I cosponsored was voted on today in the House.
This piece of legislation establishes a searchable budget database Web site for the public to access the details of the expenditure of state tax revenues and a searchable tax rate database for the public to access the details of each tax rate for all taxing districts in the state.
In an effort to encourage families to remain in Iowa and grow the tax base, I offered Senate File 325 which has been assigned a subcommittee. This is a bill for an act increasing the amount of pension income that is exempted from the individual income tax and including a retroactive applicability date provision.
Iowa currently taxes pension funds after a recipient receives $8,000. Illinois’s tax on pension kicks in at nearly four times this amount and South Dakota doesn’t tax pensions. This results in seniors claiming residency in our border states to avoid the high cost of living in Iowa.
With a bit of a push I am also hoping my Military Veterans Income Tax Exemption, National Guard Income Tax Exemption and bill requiring departments to Zero-Based Budget will find a favorable subcommittee. I am hoping each of these small steps of encouraging families to remain in Iowa and forcing government to be responsible with your tax dollars will prepare Iowa for the full effect of the national economic downturn.
Also, we received preliminary data on the state’s share of the federal stimulus dollars given to the states through American Recovery and Reinvestment Act. Of the $787 billion appropriated by congress, Iowa will receive roughly $2.1 billion. With a current $69 million gap in the FY2009 budget and a nearly $750 million gap in the FY2010 budget projected, it is likely some of this money will be used to backfill revenue shortfalls. Though making up budget shortfalls is a positive move toward supporting many of our well deserved programs it is not a wise fiscal management practice. To budget and become solely dependent upon one time money actually extends the size of the gap once the one-time funds run out in 2011. For example, if we backfill allowable growth and teacher pay with one-time infused funds, what will we pay teachers with when the funds are gone?
One time funds are most appropriately used for one-time expenditures and not for funding ongoing expenses. More importantly, the state legislature is required under the Iowa Constitution to approve all state appropriations even it is only a pass through for federal dollars to find their way to local communities. The legislature must be cognoscente during all votes that this is not “free money.”
These are tax dollars and technically, they are tax dollars citizens will pay in the future as this money doesn’t really exist yet.
For a list of bills that were debated and passed in the Senate this week, please visit the Iowa General Assembly Web Page: http://www.legis.state.ia.us/index.html. You are welcome to e-mail me with questions about any vote I have taken and any questions you may have on the federal stimulus package.
Thank you again for allowing me to represent you in Des Moines!
Shawn Hamerlinck represents the 42nd District of Iowa as state senator, which covers a portion of the area.
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