Work Begins on Iowa Constitutional Amendment Limiting Size of State Budget

Subcommittee meetings have begun on HJR 2, the constitutional amendments to limit state spending to 99 percent on on-going revenue.  HJR 5 would place two amendments on the ballot for Iowa voters regarding the Legislature’s power to tax and spend.

The first amendment limits the size of the annual state budget to 99 percent of the Revenue Estimating Conference’s December estimate of ongoing revenue.  Any ending balance puts into the Taxpayers Trust Fund, so they can be returned to Iowans.  The amendment also requires any bonding approved by the Legislature to receive a two-third’s vote of both houses.

The second amendment requires the Legislature to approve any tax increase by a 60 percent vote of each house.  Passing the amendment makes it harder for the Legislature to raise taxes or issue bonds, and it prevents the Legislature from “notwithstanding” current law so they can spend more money than the state has.

Adoption of these amendments brings fiscal discipline to state government and helps protect the family budget.

Income tax reform

Currently nine states have no income state tax; Alaska, Florida, Nevada, South Dakota, Texas, Washington, New Hampshire, Wyoming and Tennessee. Now other states are moving ahead with tax reforms of their own.

Nebraska Governor Dave Heineman has proposed eliminating the income tax for the Cornhusker state, while Oklahoma and Kansas have lowered income tax rates the last two years, with the stated goal of eliminating them altogether.

A recent analysis by economist Art Laffer for the American Legislative Exchange Council finds that from 2002-2012, 62% of the three million net new jobs in America were created in the nine states listed above without an income tax. Six of those states (TX, FL, SD, TN, NV & WY) also happen to be Right to Work states as well. No income tax states also show more stable revenue growth versus the wild swings some coastal states exhibit. 

Iowa has to compete with other states for new business.  We must remain in a position to attract new jobs for Iowa citizens.  The proposal to change the Iowa tax code to allow a 4.5% flat tax option is a step forward for Iowa to attract new jobs.

Finally, I would like to invite you to attend the following Saturday legislative updates:

• February 2, 2013, 9 a.m., Neveln Center, 406 S.W. School St.

• February 23, 2013, 8 a.m., Café Diem, 2005 S. Ankeny Blvd.

• March 9, 2013, 9 a.m., Neveln Center, 406 S.W. School St.

• March 23, 2013, 8 a.m., Café Diem, 2005 S. Ankeny Blvd.

• April 6, 2013, 9 a.m., Neveln Center, 406 S.W. School St.

• April 27, 2013, 8 a.m., Café Diem, 2005 S. Ankeny Blvd.

Your input on these and other issues are important to me.  Please keep your opinions coming.