On August 10, 2010, the United States House of Representatives approved legislation to increase taxes on U.S. multinational companies by $9.7 billion, in order to help finance a $26 billion spending package that will soon pour dollars into state coffers to be used for Medicaid programs and teacher salaries. Cash strapped states, the National Education Association and the American Federation of Teachers lobbied heavily for the funding. Shortly after Senate passage last week, the House voted to approve H.R. 1586 by a vote of 247-161, the bill was subsequently signed into law that day by President Obama.

Read on for a breakdown of the bill…

Yesterday, Gov. Culver admitted that throughout his term as governor he has made mistakes.

“I appreciate Gov. Culver’s willingness to admit mistakes, we’ve all made some,” said House Republican Leader Kraig Paulsen (R-Hiawatha). “But he’s yet to acknowledge one of his biggest mistakes, increasing Iowans property taxes.”

Paulsen notes that the governor knowingly spent too much money in fiscal year 2010 which lead him to recklessly make a 10 percent across the board cut. Due to that mistake, property taxpayers were forced to pick up the tab to the tune of a $526.9 million increase.

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Yesterday Gov. Chet Culver committed the property taxpayer to another round of tax increases. He promised a 4 percent increase for fiscal year 2012 in allowable growth, the state aid provided to Iowa’s schools. According to the non-partisan Legislative Services Agency, Culver’s pledge would be roughly a $338 million increase in school spending authority. At a minimum, current law says $40 million would fall on the property tax payer.

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As many states struggle with unbalanced budgets, state lawmakers throughout the country are looking for ways to raise revenue rather than reduce wasteful government spending. One idea that several states are considering is imposing hefty taxes on soda, teas, sports drinks and other beverages. In the past year alone, 17 states and several cities have proposed taxing soft drinks.

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Iowans who filed their 2009 tax returns by mailing in the paper form have noticed something different this year, it’s been a month since the filing deadline and they have yet to receive their refund. Accordingly, many taxpayers have contacted the Department of Revenue to obtain confirmation their tax return has at least been received and that their refund is in the mail. Unfortunately, unless the return has been manually entered into the system, there is not a way to receive such confirmation. As you can imagine it is causing heartburn in households around the state.

Concerned Iowans are turning to their state legislators with several questions. “Since my return has not been officially received by the Department will I be penalized?” The answer: No, as long as your tax return is postmarked by April 30, 2010 you will not be penalized. And, “where is my refund?” The answer: It’s on it’s way, but it’s been delayed.

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From Republican Leader Kraig Paulsen:

State Auditor David Vaudt recently completed an audit of next year’s budget passed by the Democrat majority and now being signed by Governor Culver. This budget will take effect on July 1, 2010. After studying the budget and spending, the auditor is coming to some of the same conclusions that House Republicans made during the session: the budget spent too much, saved too little and raised property taxes.

In his report the auditor has five major concerns with the budget.

Click to read the concerns…

Iowa school districts have a $40 million special education deficit.

Here’s why the issue needs a closer look:

• Iowa’s school aid formula already generates $380 million in state aid and property taxes to pay for special education. The $40 million deficit that automatically raises property taxes is what districts spent above and beyond the $380 million.
• Up until 2008, the deficit hovered around $20 million. In 2008 it jumped to $31 million and in 2009 to $40 million.

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As the House adjourned the 2nd session of the 83rd General Assembly, the House Republican Research Staff put together an end of session wrap-up of notable bills in all committees.

2010 End of Session Wrap-up

The Des Moines Register this weekend featured an article on an interesting idea that will help jump start Iowa’s economy:

It contributes little to the state budget. No tax would attract business.

Former Mason City Mayor Roger Bang called recently with a “what-if” question about Iowa’s corporate income tax.

Eliminating that tax is something Des Moines accountant Joe Kristan and others have been pushing behind the scenes in recent months, but with little headway.

I told Bang there was zero chance of the Legislature eliminating the tax this year, so most people don’t care what would happen. He agreed, but said people should start thinking about it anyway.

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To kick off the 2010 legislative session, House Democrats sent a message to Iowa taxpayers: the effort to eliminate your ability to deduct your federal taxes paid from your state income tax liability is on the table. In other words, a massive income tax increase is looming.

On January 27, 2010, the House Ways and Means Committee met for the first time of the 2010 legislative session. The meeting was short and to the point. Several bills were assigned to subcommittee, including House File 807 the highly controversial bill to eliminate federal deductibility, and then the meeting adjourned.

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