Returning the Overpayment

With the second week of session underway, bills have begun moving through the process. Each bill that is filed is sent to a House committee where the committee chair assigns it to a subcommittee. Typically each subcommittee has three Representatives. If the subcommittee approves the bill, it is eligible to be considered by the full committee. If it passes the full committee, it becomes eligible to be debated on the House floor.

The first week of session, House Republicans wasted little time in getting to work on behalf of Iowa taxpayers. We filed three bills directly aimed at putting tax dollars back to the pockets of Iowa taxpayers.

In 2011, House Republicans created the Taxpayers Trust Fund. This fund gathers a portion of the ending balance and sets it aside to be returned to taxpayers. The Taxpayer Trust Fund received $60 million from the Fiscal Year 2012 ending balance and under current law, should receive another $60 million after Fiscal Year 2013.

House File 1 –Removes the current cap on the Taxpayers’ Trust Fund and transfers the entire $800 million ending balance to be transferred to the fund. Additionally, it provides for an Iowa Taxpayers’ Trust Fund tax credit, taking the overpayment of taxes and sending it back to Iowans.

Over the past two years we have worked tirelessly to restore fiscal discipline in the state budget. Our budgets are balanced and are properly funding the priorities of Iowans. The success of responsible budgeting combined with the improving Iowa economy has resulted in excess revenue. That revenue exceeds what the state needs to operate, which makes it an overpayment by the taxpayers of Iowa. While some can’t wait to use this money to grow government, the proper place for these dollars is back in the pockets of Iowans.

You can see in the chart below the dramatic differences illustrated in the state budget over the past several years.

Budget Graph

The other bills aimed at protecting taxpayers that were filed last week are:

House File 2—Provides property tax relief to all classes of property by increasing the state aid portion of the school foundation formula from 87.5 percent to 100 percent over a five year period. On average, this is a $2.70 per 1000 of valuation reduction in property taxes.

House File 3—Gives Iowans an option when paying their income taxes, either the current system or a 4.5 percent flat tax with zero deductions.

Republicans are serious about returning the overpayment of tax dollars to Iowans, offering meaningful and long term tax relief and fostering growth in Iowa’s economy. We will continue to find additional ways to return the overpayment of tax dollars back to Iowans.

I appreciated the feedback I received from many of you last week regarding your top priorities for the 2013 session. Please continue to contact me to share your concerns and thoughts. You can reach my office at (515) 281-3521 or by email at kraig.paulsen@legis.state.ia.us

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