Legislature debates Iowa Values Fund
June 2, 2003
Republicans from the House of Representatives and Senate met in closed meetings last weekend to discuss issues outside of the special sessions, aggravating some Democrats.
The special session began Thursday in Des Moines, debating issues not resolved during the regular session.
Sen. Jeff Lamberti, R-Ankeny, said the House and Senate are more likely than not to come to an agreement on all four issues this week.
Members of the Senate reached an agreement concerning the economic stimulus package around 1:30 a.m. Friday. The House dismissed for the weekend around 9:30 p.m. Thursday.
Gov. Tom Vilsack originally proposed the package to promote economic growth by providing more than 50,000 jobs in biotechnology and other growing industries in Iowa.
House members are scheduled to reconvene at 3 p.m. Tuesday to debate Senate proposals, while the Senate is scheduled to meet at 9 a.m. Wednesday.
Sen. Herman Quirmbach, D-Ames, said the Republican leadership of the House and Senate couldn’t reach an agreement on a number of issues during the day and were left to work out their differences over the weekend behind closed doors, leaving Democrats in the dust.
Republicans are the majority in the Senate with 29 seats, while the Democrats hold only 21 seats. They hold the majority in the House as well.
“The conferences should be open. I’m not real thrilled with that,” Quirmbach said.
Lamberti disagreed.
“I don’t see a role for the Democrats here, when they only agree on one thing,” Lamberti said.
He said Democrats have only been able to agree on the Iowa Values Fund, a proposal to spur economic growth in Iowa.
Lamberti gave credit to Gov. Vilsack for negotiating and working with Republicans to try to reach an agreement over the last few days.
The main bill the Senate considered Thursday had many parts.
It included property tax reform, income tax reform, regulatory reform and the Iowa Values Fund, all rolled into one, Quirmbach said.
He said Senate Democrats were in agreement with bipartisan support from the House on the $810 million values fund, but Republican senators would not agree to it.
Gov. Vilsack proposed a $500 million economic growth plan in January. The Senate didn’t agree with the House plan to spend $810 million and reduced spending to $503 million, according to the Des Moines Register.
The final amount of money to be budgeted to the fund will probably be agreed upon this week.
Iowa will receive $180 million in federal tax relief, $80 million of which will go to Medicaid, Quirmbach said.
Lamberti said Republicans want to use the remaining $100 million to jump-start the Iowa Values Fund. However, Quirmbach said the funding is shaky.
“The Senate Democrats wanted to use $60 million to pass onto the cities and counties,” he said.
Iowa’s cities and counties are facing a $60 million budget cut this year, forcing them to lay off hundreds of police officers and fire fighters, Quirmbach said. He said the federal tax relief money should go to the states.
Lamberti said the Republicans believe an income tax reduction will help the economy grow, not the Iowa Values Fund.
Democrats can’t offer any evidence that $500 million will help improve the economy, he said.
“If you put money into the hands of the people [through income tax reduction], they will help the economy grow,” Lamberti said.
Republicans want to restructure the income tax system by implementing a $309 million tax cut over the next four years, he said.
Revenues to the state are actually positive, not negative, during the first two years. “We’ll see a net increase of $75 million,” Lamberti said.
Quirmbach argued this cut from the income tax bill would almost guarantee double-digit increases in tuition next year and job losses at Iowa State, other public universities and the Iowa Department of Transportation.
Quirmbach also mentioned $61 million of the $309 million tax cut would go back to the federal government as federal tax.
“Iowa taxpayers will only get $240 million in state tax relief,” he said.
Members of the state legislature also have differing views on property tax reform.
Quirmbach said it’s “cockamamie.”
Currently, property owners are only taxed on 50 percent of their property’s value. With this reform, by 2006 property owners will be paying double that amount, 100 percent, on the value of their property, Quirmbach said.
Lamberti said this is a multi-year project that won’t go into full effect for two to three years. He said an implementation committee will be put into place to test the changes in a few counties before any state-wide changes are made.
“We know this bill is not going to solve all of the problems,” Lamberti said.
He also said the average homeowner won’t see an increase in property tax with this bill because the aggregate levy rate — the amount of money citizens are taxed by their city, county or school — would decrease, thereby keeping the tax rate around 50 percent.
The House and Senate Republicans are in agreement on the property tax reform and are only discussing the issue of regulatory reform, Lamberti said.
Regulatory reform deals with issues like worker’s compensation. The reform would save Iowa businesses $8.5 million in worker’s compensation claims, Lamberti said.
Quirmbach said despite conflicts between parties, the special session’s focus is not on legislators.
“The important thing is to make progress for the people of Iowa,” Quirmbach said.
— The Des Moines Register contributed to this article.