|
Tax Cuts for Seniors (passed)
Legislators cut income taxes for Iowa seniors
even though the rationale used to justify the cuts—an exodus
of Iowa seniors who were leaving the state in order to avoid
Iowa income taxes—has been proven false in study after study.
 Seniors
already pay lower taxes because half of their Social Security
income is exempt, as well as the first $12,000 of pension income
for couples (or $6,000 for singles).
The way senior citizens pay state income taxes
will begin to change dramatically next January.
Beginning in 2007, an Iowan age 65 or over and his/her
spouse will pay no income tax if their modified adjusted gross
income as a couple is $24,000 or less ($18,000 or less for
individuals). Beginning
in January 2009, those tax-exempt thresholds will rise to
$32,000 (couples) and $24,000 (individuals).
Modified adjusted gross income includes all income
normally considered Iowa Net Income, plus the exempt portions of
pension and Social Security income.
Under the new Iowa law, a full exemption will be phased
in for Social Security income over eight years.
The senior tax cuts have several problems:
· The
cost of the tax cut is estimated to be $118 million.
That’s money that won’t be available for teacher pay,
money for the state universities, OSHA inspectors, cleaning up
our lakes and rivers, health care for seniors who have to go to
nursing homes and the like.
· The
tax cut is inequitable. For
example, take a 65-year old couple with $36,000 in Social
Security income, $12,000 in pension income plus $7,000 in other
income, for a total of $55,000.
After standard deductions and credits, they would pay no
state income tax. By
contrast, a younger working couple earning $55,000 would pay
$2,148 in state income tax (based on 2004 tax tables).
· This
tax cut ignores the principle that taxes should be based on
one’s ability to pay by eliminating taxes on Social Security
for all seniors, regardless of income or wealth.
Many seniors are more able to afford to pay taxes than
their cash-strapped children, who are paying on a mortgage and a
car and have families to support.
They recognize that their tax dollars can help fund a
good education for their grandchildren and would rather pay
taxes than have their grandchildren in overcrowded classrooms
taught by inadequately paid teachers.
Forty-six Senators and eighty-nine
Representatives voted for the senior tax cuts.
Sadly, election-year politics trumped the principles of a
fair and progressive tax system.
Tax Cuts for Special
Interests (passed)
A list of tax cuts passed in 2006 includes:
beginning farmer income tax deduction, confinement equipment
sales tax exemption, income tax deduction for contributions to
private school scholarship foundations, income tax exemption for
certain targeted jobs, income tax exemption for renewable
energy, sales tax
exemption for dog breeders (vetoed
by Governor Vilsack), income
tax exemption on wind energy projects, sales tax exemption on
solar energy equipment, sales tax exemption on rare coins and
precious metals. Also,
tax breaks related to boat repair services on the Missouri
river, car wash equipment, concrete mixing plants, soy-based
transformer fluid, airport property leased to aeronautical
services, and warehouses located in enterprise zones.
The total cost of these cuts plus the
retirement tax cuts, when fully implemented, is estimated to be
as much as $200 million annually.
Each of these tax cuts violate one or more of the three
principles of Federation tax policy, fairness, equity and
adequacy.
Teacher Pay & Preschool (passed)
 After
years of wage stagnation resulting from stingy state funding,
Iowa’s average teacher pay level currently ranks 41st in the
nation. In an
attempt to reverse this trend the 2006 legislature passed a
multi-year program putting $35 million into teacher salaries for
the upcoming school year, $70 million for the following year,
and $105 million in the third year of the plan.
These increases are predicted to raise average teacher
pay in Iowa to 32nd in the nation.
Legislators also increased funding for preschool programs
and daycare programs. The
2006 education legislation includes directives creating a pilot
project for a performance-based pay system for K-12 teachers and
increased graduation standards for students.
Minimum Wage Increase (failed)
Once again, Republican leaders in the Iowa Legislature
blocked efforts to increase Iowa's minimum wage.
An increase would likely have passed by wide bipartisan
margins if Republican leaders would allow an open debate on the
issue followed by an up-or-down vote.
They refused to do so.
To date, eighteen states have increased their minimum
wage higher than that set by the federal government ($5.15 per
hour) and six states are in the process of gathering signatures
to place a minimum wage increase on the ballot this fall.
The actions (inactions) of Republican legislative leaders
clearly show that Democratic control of the Legislature is
necessary in order for an increase in the minimum wage to become
law.
Lower Wage Thresholds (failed)
Efforts to lower wage thresholds required for economic development projects
funded with Iowa Values Fund monies failed.
Those projects currently require wages (including
benefits) to be at least 130 percent of the county average wage.
The proposal would have changed the wage threshold to 130
percent of the average county starting
wage, a huge decrease. The
measure passed the House, but died in the Senate.
IPERS (passed)
A bright spot in this year’s legislative
session was a bill that will help to eliminate the unfunded
liabilities in the Iowa Public Employee Retirement System (IPERS).
This move will keep the system sound for future retirees.
The need for an increase in the IPERS
contribution rate has been recognized for some time.
The 2005 IPERS Financial Report put unfunded liabilities
in the retirement system at $2.289 billion.
The unfunded liabilities are the result of several
factors: an aging membership that is living longer; 3 years of
low investment returns; previously enacted benefit enhancements;
and a contribution rate that had not increased since 1979.
The legislature increased the amounts that
both public employers and public workers pay into the system,
but maintained the employer share at 60% and the employee share
at 40%.
The overwhelming votes to pass the bill, 46 -
0 in the Senate and 97 - 0 in the House, obscure the fierce
controversy that has accompanied the IPERS debate over the last
few years. Republicans
held up the measure, proposing to raise the employee share and
cut the employer share of the pension contributions.
They also favored a defined-contribution plan for new
employees as an alternative to the defined benefit plan that has
been the mainstay for public sector retirees.
A major effort led by public employee unions
and the Federation, with support by other union lobbyists and
members was instrumental in the passage of this legislation.
Workforce
Center Funding (passed)
Republican-proposed cuts for funding to the
Department of Workforce Development were ultimately reduced from
$4 million to $1million in the end-of-session budget
negotiations. Even
with the smaller cut, fifteen
Iowa Workforce Development (IWD) centers will close.
The Workforce Centers closing are in Chariton, Clarion,
Corning, Forest City, Grinnell, Guthrie Center, Independence,
Jefferson, Knoxville, Le Mars, Missouri Valley, Monticello,
Pocahontas, Sheldon, and Vinton.
According to the IWD, “Many of our customers will find
it necessary to travel to surrounding counties for workforce
services.” Fifty-four
IWD offices remain open.
Car Title Loans (failed)
 Even though the Iowa Senate voted 47 - 3 to
place a 21% cap on the interest charged by car title lenders in
Iowa, Republicans in the Iowa House refused to even allow the
bill to come up for debate.
The car title lending “industry” sprang up
in Iowa and other states as a result of the elimination of usury
laws which were repealed in most states to accommodate credit
card companies. The
exploitive interest rates charged by car title lenders—often
as much as 365 percent—and the resulting forfeiture of
vehicles prompted a large majority of legislators to support
reform of the industry. Many
point to the tens of thousands of dollars given to a political
committee with ties to Republican House Speaker Christopher
Rants as the key reason that the legislation died in the House.
Election
Law (failed)
 A
measure requiring a photo ID when casting a ballot and a
photocopy of an ID when casting an absentee ballot, passed the
House but was not considered by the Senate.
Iowa’s elections system, which employs local people as
election officials who are monitored by partisan poll-watchers,
has proven effective and has resulted in honest elections.
Adding a photo ID requirement for all voters is just
another hurdle that attempts to deny otherwise qualified voters
the opportunity to vote.
A
common-sense measure requiring electronic voting machines used
in Iowa to produce verifiable paper records failed to pass the
Republican-controlled House.
Whistleblower
Protection (failed)
The
Iowa House, on a 42 - 49 vote, refused to add
comprehensive whistleblower protection to the government
accountability bill passed late in the session.
The measure is needed to prevent retaliation against
state workers who disclose information regarding violations of
professional standards or unsafe practices.
A Senate amendment to add meaningful whistleblower
protection for health-care workers also was defeated on a 25 -
25 party-line vote.
Attacks on Workers (failed)
Guilty until proven innocent!
This undemocratic assumption would have applied to
prospective employees when the results of their drug or alcohol
tests were “inconclusive.”
There are many reasons the results of such a test might
not be able to be determined.
It is unfair to assume that the worker is somehow
responsible and must suffer the consequences.
The House passed this ill-conceived bill by a vote of
58-41, but the Senate wisely let it die.
Business efforts to gut Iowa’s Workers’
Compensation law failed to gain traction in the House, let alone
the Senate. A
Republican proposal would have required work activity to be the
“predominant factor causing the injury.”
Legal action to determine the “predominant” cause of
an injury would be endless, expensive, and would ultimately deny
benefits to many injured workers.
Many workers suffering from cumulative trauma injuries,
such as carpal tunnel syndrome, would likely have their claims
denied if the measure passed.
|
