Tax issues, bottle bill drive legislative forum

Wednesday, March 15, 2017

The mid-day legislative forum Saturday drew questions from a standing-room only crowd in Spirit Lake.

U.S. Rep. Steve King, state Sen. David Johnson and state Reps. Megan Jones and John Wills participated in the Iowa Great Lakes Chamber-sponsored event. Chamber CEO Jeff Thee invited people to submitted written questions as they signed in. The questions were asked of the legislators in the order they were submitted. Thee also advised the audience that no questions would be asked from the audience and each legislator would be given three minutes to reply.

The first question came from Summer James of Spirit Lake. She asked if the Iowa Legislature would be lowering her property taxes. Wills and Jones readily commented.

"We are currently going over our tax credit portion of the budget," Jones said. "We are giving out $440 million in tax credits at the present time and need to research each one to see if it is a necessary and beneficial credit. Some, such as adoption credits and veterans credits, work. Some do not."

Jim Kessler of Lake Park said he receives a $2,500 military tax credit and would like to see that increased to $5,000.

"I also receive the $2,500 tax credit as a veteran," Wills acknowledged. "There are statistics that show the credit does generate more money for the state than it costs us so I think that credit has merit. We do need tax reform since our neighbor South Dakota is one of the most moved-to states in the country and they have no income tax. We need to be looking at tax reform to allow businesses to move to Iowa."

Senator Johnson added, "There are currently meetings going on that are not open to the public so we don't know what will happen. However I don't expect a tax reform bill this year."

Congressman King weighed in, saying, "The 20 percent border tax concerns me. I think there is a lot to be done to get a tax reform bill."

The Iowa Recreational Trust Fund was passed at the ballot box seven years ago as a constitutional amendment but has yet to be funded. Jane Shuttleworth of Okoboji was the spokesperson for a group in the audience wanting to know when the fund would start receiving tax dollars.

Wills responded: "No formula was set up in the amendment establishing the fund…it was an allocation," Wills said. "We voted to set up a trust fund 10 years ago but not a a funding formula."

Sen. Johnson, a strong proponent of the fund, disagreed. Wills questioned him saying: "I'll just ask the Senator, so did we vote on a formula when we voted in 2010? Did we vote on a specific formula that is now constitutional?"

Johnson replied, "Well, you can't do that constitutionally." Wills continued, "OK, so it's not in the constitution." The allocation in the amendment called for three-eighths of a cent portion of taxes collected to go into the trust fund.

Johnson: "The question to you, sir, was would you vote for the three-eighths of a cent without changing the allocation?" Wills told Johnson he felt he had answered the question, feeling a formula needed to be set up in order to vote for it. Johnson quickly disagreed. "It's already there." Wills predicted, "It's not going to pass the way the formula is now."

Jones delved further into the topic.

"Representative Wills and I voted to pass a bill last week that would reduce income taxes in the lower tax brackets and fund the trust fund at three-eighths of a cent," she said.

A big question on the minds of the forum attendees involved the bottle bill. Jones, who resides on a farm with no recycling available to her, emphasized the need to phase out the bottle bill.

"We need to eliminate the 5 cent tax on bottles and cans," she said. "I want to see the proposed bill levy a one-cent deposit on distributors to pay back the original loan."

The state representative called a second component to the bill.

"I want a .0015 tax on retailers who sell the products and that money to go into a litter fund, so communities and organizations could obtain grants to build recycling locations," she said.

She was not optimistic about the bill.

"The current bottle bill works in large cities with 100 percent participation and large volumes; but in rural areas of Iowa there are no benefits and no recycling centers to take the bottles and cans."

Wills agreed with Jones saying: "This is going to be a hard bill to pass with the resistance the large cities will give."

The closing statements ended with King.

"It was good to be here and hear you," the congressman said. "You did your homework and I am glad to hear your thoughts."

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