The 85th Iowa General Assembly was gaveled into session January 14. Budget issues and property taxes are top items on the agenda as legislators begin the 2013 session. Farmers and agricultural organizations will be watching carefully to make sure they don't get caught in the crossfire of commercial property tax reform. Governor Branstad and many state lawmakers agree that commercial property taxes are too high in Iowa and they want to lower them. But there is strong disagreement over the best way to reduce commercial property taxes without harming local governments or raising property taxes on residential or ag property.
"We don't want to see a shift in property taxes that would end up putting a heavier burden on farmers," says Matt Steinfeldt, state policy advisor for the Iowa Farm Bureau Federation. Ag leaders are concerned the change might eliminate or alter the present productivity formula used to calculate taxes on agricultural land.
With increases in production and the recent jump in rural land values, ag property taxes are going to gradually rise anyway. Some lawmakers suggest that the state might choose to slowly phase in a program that would shift more of the weight of funding for education and schools to the state government, so education could be funded by something other than local property taxes. "We'll first have to see what the lawmakers decide on the commercial property tax piece of the puzzle," says Steinfeldt.
Budget surplus, water quality, fuel tax and improving the state's roads and bridges
What other issues will the Iowa legislature likely deal with in 2013? The state this year has a budget surplus because tax revenues have been high, thanks in part to a strong ag economy. Lawmakers will debate how to spend the money. Some state government departments and agencies that have been underfunded in recent years are asking for increases. Also, some of the budget surplus could be used to fund one-time expenditures or it could be used to help pay for fixing the commercial property tax situation. Of course, everyone wants a part of the surplus.~~~PAGE_BREAK_HERE~~~
The Iowa Farm Bureau Federation will focus on protecting property tax payers in 2013. The state's largest farm organization sees property tax reform, water quality and infrastructure improvements to the state's roads and bridges as important areas of concern in the 2013 legislative session.
Iowa's unprecedented property tax growth impacts all residents of the state
Farm Bureau members say Iowa's unprecedented property tax growth impacts all Iowans. "Property taxes have increased by over $2 billion since the year 2000, an increase of over 75%," says Craig Hill, IFBF president. "Farm Bureau members believe the primary objective of property tax reform should be to reduce the property tax burden on all classes of property. As lawmakers address issues such as commercial property tax reform, Iowans need to be assured that any reform affecting one class of property would not bring a shift to other classes of property. In addition, reasonable property tax growth limitations are needed so property tax collections do not continue to outpace the economy and family wages."
Controlling growth of property taxes is just one of several priorities named by IFBF. Members also support using the state's one-time ending fund balance, which will total hundreds of millions of dollars on one-time expenditures such as property tax relief or infrastructure, as opposed to being used for ongoing expenses.
Calling for increase in state fuel tax to bring additional revenue to fix roads and bridges
"We're at the point where more and more local governments are turning to bonding as an alternative source of revenue to pay for deteriorating rural roads. Last year alone, rural property owners paid over $140 million in property taxes to their local roads and bridges," says Hill. IFBF policy calls for an increase in the fuel tax to bring additional revenue for road improvements. "Iowa's fuel tax hasn't been increased since 1989 and would insure that users of the roads, including out-of-state motorists, are paying directly for the infrastructure repairs. A user fee is definitely the most equitable and fair method of funding," he adds.~~~PAGE_BREAK_HERE~~~
Another ongoing priority for IFBF is conservation and water quality. The recently-unveiled Iowa Nutrient Reduction Strategy is a science-based plan, which helps farmers and watershed stakeholders reduce or better control nutrient runoff and pollution. Developed by the Iowa Department of Agriculture and Land Stewardship, the Iowa Department of Natural Resources and Iowa State University researchers, the plan offers many options to improve targeted, voluntary watershed improvements.
More conservation cost-share funding needed to help meet goals of Iowa's new nutrient reduction plan
Under the plan, IDALS will work with farmers to maintain agricultural productivity, protect natural resources and reduce nutrient losses, and the Iowa DNR would work with major cities and industries to reduce nutrient discharges into Iowa's waters. "This technology-based, solutions approach will be more effective than a one-size-fits-all type of program that would result from regulations," says Hill. Farm Bureau members will also work to secure adequate funding from the state legislature to meet the demand of conservation programs.
Farm Bureau will advocate for the Iowa Legislature to continue its long-term commitment for agriculture research at ISU, Hill adds. "We support a proposed $7.5 million appropriation for bioscience research and development at ISU, which will leverage federal and private research investments and create more collaborative opportunities involving university researchers, private companies and local farmers and businesses."
Regulatory reform is also a continued IFBF legislative priority, since unwarranted or excessive regulations add unnecessary costs to farming, which impact food costs for all, Hill says. IFBF policy calls for limiting the rule-making authority of state agencies, appointed boards and commissions.