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March 30th, 2010

Farm Bureau: Property Taxpayers Stuck with the Bill

president_craig_langIowa decision makers spent most of the 2010 general session focusing on patchwork solutions to balance the state budget, such as spending one-time funds on on-going programs and shifting state funding obligations to local governments. These temporary solutions will result in tax increases for property owners and do nothing to fix a broken budgeting process that will haunt Iowans in the future, according to Iowa Farm Bureau Federation (IFBF).

“Unfortunately, the 2010 legislature and the Governor didn’t do much to address our state’s long-term financial health,” says IFBF President Craig Lang. “They used short-sighted budgeting practices to balance this year’s budget. As a result, property taxpayers will continue to suffer. Iowans have seen a 60 percent increase in property taxes paid over the past decade. Decisions made over the past three years – such as not fully funding school aid and property tax credits and making across-the-board budget cuts – have the potential to increase property taxes by another half billion dollars, without even considering ‘typical’ increases created by growth in levy rates and the tax base.”

“Throughout the session Farm Bureau members asked lawmakers to stop basing our budget on estimates,” says Lang. “Iowa families don’t base their household budgets on what they hope to earn. They use past earning history and future projections to determine what they’re able to afford. Farm Bureau members expect their lawmakers to do the same.”

“We also need to protect state priority areas, like K-12 education, by ensuring that rainy day funds are in place and only used in times of declining revenue. We must end the practice of spending one-time funds on on-going programs, and we have to protect property taxpayers by excluding education from across-the-board budget cuts initiated by a governor.”

Farm Bureau members were also disappointed that leaders failed to pass a bill clarifying that agriculture is to be exempt from state inspections on new electrical installations, such as installations in grain bins or out-buildings. After the Iowa legislature passed a law in 2007 dealing with electrical licensing and inspections for commercial, industrial and residential properties, the governor-appointed Electrical Examining Board wrote rules for the law that include agriculture.

“This is another prime example of government creating problems by trying to address nonexistent ones,” says Lang. “There has never been a rash of fires or other safety issues associated with minor electrical inspections on farms, but now farmers could have to deal with the costly headache of waiting to fix a grain bin in the middle of harvest or turn on new fans needed to cool livestock in the heat of summer. The law defies common sense. It also defies our law-making process. The state legislature is charged with creating law, not appointed boards.”

Farm Bureau members were able to discourage several new taxes and unnecessary regulatory requirements that would have been harmful to farmers. They also helped assure that a tax credit program for young farmers remained fully funded, at $6 million, when some lawmakers had proposed to halve the program’s funding. Still, Lang and other Farm Bureau members are disappointed that legislators spoiled an opportunity to reform budgeting practices that have proven costly to Iowa families.

“These are difficult times for Iowans. They don’t need more burdens placed on them,” says Lang. “Real reform is needed, and our members will continue to push for sound budgeting practices that protect property taxpayers around the state.”

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