Baxter and Guth legislative updates

Terry Baxter

House Happenings, January 24-28

As we wrap up week three in the legislature, the pace is picking up quickly.  Legislatures are getting co-sponsors for bills and subcommittees are being scheduled. 

I am working hard on three bills. One is a simplified version of the commutation bill I drafted last year that stalled out.  It had great public support but was too big of a lift. This year’s bill simply makes the case that the legislature sees merit in looking at commutations for some of our adult lifers who have served over 35 years and have undergone verifiable change.  The recidivism rate of adult lifers across the nation in states that have a pathway to commutation is nearly zero.  This is especially true if they have a sustained faith based experience.  I believe in both justice and mercy. 

I am also working on a few bills in natural resources at the request of constituents. One would allow tungsten shot in .410 shotguns to be used for turkey harvest.  Tungsten has twice the weight and density of lead and has been proven extremely effective in a .410 for both goose and turkey harvest in several states without the recoil associated with 3 1/2 inch 12 gauge magnum.  It is a great alternative for youth and seniors.

Another bill relates to non-resident land owners who want to deer hunt their own property.  Currently they have to apply to the lottery like every other non-resident.  Sportsman groups do not want non-residents buying up our Iowa hunting land and closing access to residents and they want good herd management practices. We also have a number of retired Iowa farmers who come back to farm, but are now residents of other states.  They can no longer hunt their own property without being part of the state wide lottery. This bill requires ten years of ownership before non-resident owners can get an annual non-resident license to hunt their own property and they can participate in the state wide lottery if they choose.  It also has provisions for granting  access to resident hunters, participating in herd management initiatives and water quality programs.  It is an attempt to address all sides of this issue.

One major discussion among House Republicans relates to our state budget.  We want to be responsible with our surplus, do some form of tax relief and address SSA in a timely fashion.  We are looking ten years into the future and recognizing that in four years the federal government’s commitment to help fund state Medicaid expires.  We need to be conservative and responsible.  Let me highlight what we view as a good plan moving forward that both grants needed tax relief and funds our obligations.

House Republican Plan

• Iowa House Republicans want a tax plan that is simple, responsible and cuts taxes for all Iowans.
• The Biden Economy is hurting Iowa families and we need to deliver relief now.
• Iowa House Republicans released our own tax plan on Thursday that closely resembles the Governor’s tax cut plan.
• Our plan is similar to the Governor’s plan by
  • lowering taxes for all Iowans so everyone pays a flat tax rate of 4%.
  • making retirement income exempt for all Iowans and creating a new income exemption option for retired farmers.
• Our plan does not include a tax cut for corporations, keeping the focus on individual Iowans who need relief most right now. 
• Our bill also includes an outline on how to use the Taxpayer Relief Fund to offset the tax cut and keep the budget balanced.
• Our tax plan will not raise taxes for any Iowan.

Making Retirement Income Tax Free

• A big part of our tax plan is making all retirement income in Iowa tax free. This piece is in the Iowa House’s tax plan, the Senate Republicans’ tax plan and the Governor’s tax plan.
• How retirement income is taxed in each state can have a big impact on where folks choose to retire and make their primary state of residence.
• We see many Iowans move or change their primary residence to states like Florida, Texas or even Illinois that do not tax retirement income.
• If we can keep those folks in Iowa once they retire, that means they continue to contribute to the economy here in Iowa and to not-for-profits and to their local community.

I believe this is a good plan that is very responsible.

The View From Here by Senator Dennis Guth

Week three of the 2022 legislative session was very busy for me. There were plenty of subcommittees which gave us a first look at many ideas.

As chair of an appropriations subcommittee, I help oversee the budgets of 14 departments and some smaller agencies and boards. I spent the beginning of the week in back-to-back meetings with department heads. The governor had already given us her take on how much each budget should get, so I am striving to justify each increase so the taxpayer’s money is used most effectively. The only increases across these 14 departments goes to the inspection of nursing homes and increased utilities cost for government buildings. Nursing home inspections fell far behind during Covid, and this extra funding should help get inspections caught up. The governor has set a lean budget hoping to implement a decrease in taxes.

The biggest issue for the Senate this week was the release of the Senate Republicans tax relief package. Our goal was to look carefully at the governor’s proposals and see if they will work long term or if we can justify even more cuts. Looking at personal income tax, currently the top rate is 8.53 percent and this applies to earnings over $78,000. Many other states don’t trigger their top rate until much higher income is hit, many over $100,000. That means that many middle-income Iowans pay some of the highest state income tax in the country. Our tax bill will be phased in over a number of years with a goal of achieving one rate for everyone at 3.6 percent. That will place us at the 4th lowest rate in the country when are now we are at the 8th highest rate.

Some have suggested that a flat tax hits the poor the hardest. When you consider that the standard deduction allows a family to make $22,000 before any tax is paid, that is not so. Iowa’s corporate tax rate is also currently one of the highest in the country. In order to compete with other states, we have offered many tax credits and exemptions to entice a company to come to Iowa. This means other companies must pay more. We are working to reduce the tax rate for all businesses by diminishing special treatment for some.

We also propose eliminating taxes on retirement income and expanding the military pay exemption to full-time National Guard members. Farmers will be exempted from taxes on cash rent or crop share when they retire. Our desire is to keep more of our retirees in Iowa, rather than seeing them flee to other states (such as Illinois) that don’t tax pension income.

As I make decisions over the use of taxpayer money, I am reminded of a famous quote of Benjamin Franklin’s, “A penny saved is a penny earned.” As always, it is a pleasure and an honor to serve you. Please do not hesitate to call my cell or visit me at the Capitol about any issues or concerns.