TIF allows cities to add to their overall tax base by borrowing against the future increase in valuation that comes from redevelopment. While this has been a very useful tool for many cities (including in our area), we also have to consider whether there should be limits placed on the amount of debt a city can accumulate under TIF, and also if there needs to be a limit on the length of time TIF debt obligations should remain outstanding.
For example, the City of Coralville carries well over $200 million in TIF debt, amounting to about $12,000 per citizen. Also, the city is not scheduled to repay the TIF debt for another 30 years. Another downturn in the economy could put a tremendous burden on the city’s finances.
We also need to consider whether or not cities should use publicly funded projects to compete directly with private business and also question if cities should use TIF to poach existing businesses from nearby communities. Coralville has been using its own Iowa River Landing Project to proactively take tenants away from other places, most notably Coral Ridge and Sycamore malls.
Both the House and Senate Ways and Means Committees are working on bills to reform our current laws on TIF. The results of our hearing will be shared with the House Ways and Means Committee, to help them put together new guidelines for TIF that allow cities to keep this tool, while also adding safeguards for taxpayers.
Although this can be a difficult and controversial issue to deal with, I believe that we will be able to find common ground to make the system better. The media did a fair job of reporting our hearing, and here are a couple of good articles that provide additional background:
Des Moines Register – Citizens group urges restrictions to TIF law
Also, I highly recommend the following study from Peter Fisher of the Iowa Policy Project to anyone who has a particular interest in TIF:
Iowa Policy Project – A Case Study of Johnson County
The House Public Safety Committee was fortunate last week to have representatives visit from the Regional Child Protection Center at Blank Children’s Hospital. This clinic provides examination and assessment of abused children and works closely with law enforcement and the court system to help protect abused and neglected children.
In 2010, Iowa had 12,595 children confirmed as being abused. Over 50% of these victims of child abuse were under 6 years old. Iowa’s Child Protection Centers operate under a nationally recommended, multi-disciplinary model incorporating the Department of Human Services, law enforcement officials, county attorneys, victim advocates and medical and mental health professionals.
The folks at the Regional Child Protection Center do a tremendous job with these children who are exposed to heart-breaking abuse. Treating and caring for victims of child abuse should be a priority for state government.
At the request of the Governor, Department of Transportation (DOT) Director Paul Trombino released the finding of a study to find cost savings within the department. The report identified 13 efficiencies with total savings projected at $50 million. The goal of the report was to find efficiencies in order to free up more money in the Road Use Tax Fund for the improvement of the public roadway system.
Some of the program efficiencies include an assessment of rest area and weigh station investments ($1.5 million annually), a reduction in roadside vegetation improvements ($1 million annually), and the selling of unnecessary right of way parcels ($1 million in one-time). Other savings include a one-time $11 million through the implementation of an asset management tool, which would help the DOT make better decisions on how and when to upgrade and maintain their physical assets. Similarly, the department found $10 million in savings annually that envisions the implementation of new budgetary management policies focused on post-letting project costs. The goal would be to deliver projects ahead of schedule and under budget.
Some of these efficiencies will require legislative action, or action by the Transportation Commission. Some will simply require cooperation at the county or local level. A full copy of the report released this week—which includes details on the efficiencies, and whether or not the efficiency requires legislative action—can be found here:
I commend the DOT for their efforts to find efficiencies in state government. This is what every department and every agency should be submitting to Iowans, a plan to save taxpayer money while preserving core services.
This week, the House Ways and Means Committee began work on much needed property tax reform. Year after year, escalating property taxes are hurting Iowans’ pocketbooks, and without legislative action, even larger increases on the horizon.
Over the last ten years, school rates have increased 60 percent, county rates have increased 64 percent and city rates have gone up 74 percent. While over the same time period, Iowans’ personal income has only increased by 46 percent.
If we do nothing, the hardworking taxpayers of Iowa are staring down the barrel of a $2.3 billion property tax increase over the next 10 years, with the majority of that falling to homeowners.
Overly burdensome commercial and industrial property taxes negatively impact Iowa’s economy and serve as an impediment to getting Iowans back to work. Our uncompetitive and unpredictable property tax system places a burden on job creators and restricts the ability of businesses to expand, hire or relocate to Iowa.
As the legislature considers several different tax proposals, I am committed to relief that is provided across all tax classifications, including residential. Furthermore, we must create a predictable system, so that taxpayers can plan on their future obligations. Finally, we need to make sure that our plan includes ways to limit future growth.
One interesting component of the most recent House Republican proposal is to have the state pick up a greater share of local school aid. This reduction in how much local school districts need to levy would free up those funds for property tax relief. What remains to be determined is if this proposal would provide as much relief in our community as it does statewide.
Iowa’s current property tax system is incredibly complicated, and unfortunately so are any solutions. It is going to take a lot of work by all interested parties to find an equitable solution.
The bottom line is that just like all of us have tightened the family budget and learned to do less with more, so should all levels of government. I welcome any ideas you might have on to help us craft meaningful property tax relief.
Attached is a letter I have sent to Senator Grassley, Senator Harkin and Representative Boswell to voice my opposition to the Protect IP act (SOPA/PIPA). This legislation would give broad, unchecked power to the Justice Department to shut down websites without due process for the smallest of infractions. This type of law censoring the Internet would be a better fit for China than here in the United States of America.
With the ceremonial speeches and formalities out of the way, it is time for the legislature to get down to work. We were able to get the budgeting process started right away this year, with Governor Branstad delivering his proposed budget in the first week, something very rarely seen at the Capitol.
Governor Branstad’s proposed budget meets my top criteria in that it complies with Iowa’s expenditure limitation. Unlike prior budgets that spent far more than the state collects in revenue, this budget does not contain the budget gimmicks we have seen in the past.
The increases that are included in the Governor’s proposed budget are focused on what I consider to be essential functions of government. The FY2013 budget contains additional money for Medicaid, education, mental health services, and prisons. As we move through the budget process, I will be looking for ways to cover these essential services in a fiscally responsible manner.
You have my ongoing promise that I will not support any spending beyond what the state collects in revenue. We will fully fund the priority obligations of government while we seek cost savings to make state government smaller and smarter.
All of our work this year must be considered through the lens of what is good for Iowa’s economic recovery and our future growth. It is my belief that the best way to put Iowans back to work is to advance policies that create an environment that gets government out of the way and encourages employers to create jobs right here in Iowa.
I will be advocating for legislation that provides the certainty that job-creators require and the opportunity for careers that Iowans deserve. What I will not support is more government “stimulus”, or another I-JOBS plan that grows government and borrows even more from our children.
Iowa’s employers must have a commitment from their government to keep spending under control so they can plan for the future and know for certain that a tax increase for them is not on the horizon to pay for bigger, more bloated government.
On the third day of session, Chief Justice of the Iowa Supreme Court, Mark Cady, presented the 2012 State of the Judiciary. The tone of Justice Cady’s speech was markedly different than last year’s address, and I believe his comments were well received by the legislature. The Chief Justice focused on the common interests between the Justice System and the other two branches of Government, particularly with regarding to fiscal stewardship and economic growth.
Justice Cady’s remarks began by addressing the ways the court system can help to build a better economy. According to Justice Cady, the most successful and wealthiest nations have a court system that applies the rules of law fairly and impartially. When all are treated fairly, companies are more confident and willing to invest in a state, according to the United States Chamber of Commerce.
Since Justice Cady became Chief Justice, Iowa Courts have made attempts to open up the court system to the public. The Iowa Supreme Court has traveled to Cedar Rapids, Mason City and Carroll to hear cases in more accessible settings. Justices have traveled to schools to speak with children and adults about the goals of the court system. Additionally, the Supreme Court has installed cameras in their courtroom so people from all over Iowa and the world can watch oral arguments wherever they may be. I commend the Court for their work to bring new transparency to their work.
Chief Justice Cady concluded his speech by addressing the issue of funding for Iowa Courts. Citing a reduction in staff and an increase in cases, the Chief Justice remarked that the court system could be undermined if cuts continue. For the coming fiscal year, the Courts have requested an increase of $9.2 million from last year.
As a practicing attorney, I understand the critical role that the courts play in our society. There are many ways in which our court system impacts children, families, homeowners, businesses and ultimately all taxpayers. Although there are very limited funds available to increase any government spending, I do believe that we need to make sure that our courts have the resources they need to effectively serve the people of Iowa.