Ad-Express and Daily Iowegian, Centerville, IA

March 26, 2013

RIZ and taxes

By Larry Sheets, R-Moulton Iowa House District No. 80 Representative
Daily Iowegian

CENTERVILLE — You win some, you lose some and some are just delayed. Last Tuesday the House Leadership decided not to allow the Rural Improvement Zone legislation to be debated on the floor this session.  

In brief, the bill allowed your Board of Supervisors (your most local representatives) to decide every seven years on the RIZ continuation. Without these restrictions, I believe the current law violates the concept of “No taxation without representation.”

I was further disappointed because I truly believed it would have passed both House and Senate.  RIZ bill “to be continued…”

Since the first week of the 2013 session, the House has been working on ways to leave more money in Iowans’ pocketbooks. The House recognizes now is the time for serious, meaningful tax relief. While we’re still focused on property tax relief and other reductions in taxes, House File 478, reducing Iowans’ income taxes, passed last week as amended, 53-46.

House File 478: Gives Iowans a choice when paying their income taxes, either the current system or a 4.5 percent flat tax with zero deductions or credits. Raises the filing threshold so that the first $6,235 (or $12,450 for married couple) would not be taxed.   Makes Iowa’s tax system simpler, flatter, and fairer.

The nonpartisan Legislative Services Agency predicts that House File 478 would reduce the overall tax burden on Iowans by $400 million. The greatest number of taxpayers benefiting from this flat tax option falls in the $30,000 to $40,000 bracket. For all filers, those who elect this option would save about $800 on average.

An amendment to HF 478 sets in place a permanent mechanism to return any overpayment of taxes back to Iowans. Once the legislature and the governor set budget priorities and reserve funds are full, the taxpayer trust fund collects anything leftover.  This bill sends any leftover money back to the taxpayer through a credit on their tax forms. This isn’t a rebate but instead reduces your tax liability.  Now it’s up to the Senate to pass it.

Gov. Terry Branstad recently unveiled the Healthy Iowa Plan as an alternative to an expanded Medicaid program. The Healthy Iowa Plan would ensure coverage for all Iowans living under the poverty line.  

Coverage: The Healthy Iowa Plan replaces the expiring IowaCare program that currently provides coverage on a limited basis to about 67,000 low-income Iowans. Roughly 89,000 uninsured Iowans earning below 100 percent Federal Poverty Line gain access to care.

Personal Responsibility Measures: The program requires participants to contribute to the program on a sliding scale based on their income.  Participant contributions could be as little as $5 per month.

Cost: The program draws on federal dollars for its financing.  In the first year, the program would cost an estimated $162 million.  

For the plan to proceed, the governor has to get a Medicaid waiver from Washington, D.C. The legislature will also be tasked with passing a Healthy Iowa Plan policy bill through the House and Senate before the end of the 2013 session.

Don’t hesitate to contact Sheets with questions or concerns at larry.sheets@legis.iowa.gov or (641) 895-6153.