Iowa Farm Bureau members are disappointed with Governor Chet Culver's decision on October 8 to order state government to make a 10% across-the-board spending cut for the fiscal year 2010 budget.
"Farm Bureau members are disappointed because they know this equals a $251 million property tax hike," says Iowa Farm Bureau president Craig Lang. "Although the governor said he will not burden Iowans with a tax hike to balance the budget, that's exactly what he's doing. A $251 million property tax hike now looms over the head of hardworking Iowans and there is no relief in sight."
Farm Bureau members will ask Governor Culver and state leaders to redesign the state's budgeting process during next year's legislative session. "We have to make the necessary changes to avoid the budget disruptions we are seeing today. The state's budget default process of leaning on property taxpayers has to stop. Homeowners, farmers and main street businesses simply can't afford a tax increase and a property tax increase is a tax increase," says Lang.
Farm Bureau urged Culver to call special session of legislature
On October 7 the state of Iowa's Revenue Estimating Conference lowered its estimate of state revenues by $415 million, illustrating a number of fiscal challenges ahead for Governor Culver in the 2010 budget. As a result, Farm Bureau urged the governor not to order across-the-board cuts, but instead to look at all options, including a special session of the Iowa legislature so elected leaders can collectively make the best decision to solve Iowa's budget issues.
"Across-the-board cuts reduce state spending, but unfortunately they increase property taxes on all Iowans," says Lang. "The funding of K-12 education is a partnership between state government and local property taxpayers, so when an across-the-board cut is ordered, the state's share is reduced, which means property taxpayers have to pick up the shortfall."
Fears an across-the-board budget cut will raise property taxes
An across-the-board cut of 10% to meet the decline in revenue could raise property taxes for Iowans by $251 million, he says. This is in addition to the increase taxpayers have already realized to pay for school, city and county government operations. "Because of recent property evaluations, we are already approaching an 8.5% property tax increase that will impact not only farmers, but homeowners and business owners," says Lang.
"Families struggling to make ends meet in this time of layoffs and foreclosures can't use 'across-the-board cuts' to balance their personal budgets; it's not like we can pay just 95% of our heating bills or 95% of our mortgage," says Lang. "Our families have to roll up their sleeves and make hard choices on where to cut to pay for our priorities. We expect our elected leaders to do the same."
Thus, Farm Bureau members will ask Governor Culver and state leaders to work together during the 2010 session "to redesign Iowa's budgeting process and make the necessary changes to avoid budget disruptions that are currently plaguing our state," he adds.