School sales tax plan moves forward
11:48 AM
By Dan Gearino Journal Des Moines Bureau | Posted: Tuesday, February 05, 2008
DES MOINES n Business leaders stood firmly against a proposed rewrite of the local option sales tax for schools on Tuesday, while rural lawmakers and school officials stood just as firmly in favor of the measure.
The proposal -- which would make the 1-cent tax permanent and statewide -- was recommended by a five-member subcommittee. The next stop is the House Education Committee, where debate could begin as soon as next week.
There was little doubt the subcommittee would give a quick thumbs-up. Three of the five members are co-sponsors of the bill: Reps. Roger Wendt, D-Sioux City, Royd Chambers, R-Sheldon, and Jeff Kaufmann, R-Wilton.
John Gilliland, a vice president for the Iowa Association of Business and Industry, was one of a succession of lobbyists who testified.
"At the end of the day, the fact is there are new taxes," he said about why his group opposes the bill.
All 99 counties have adopted the county-based version of the tax, known as the school infrastructure local option tax, or SILO. Right now, counties get to keep most of the proceeds from local sales.
The statewide version of the tax would reduce the regional differences in the payment levels for schools. The state would gather the projected $400 million and distribute it to schools based on an enrollment formula. They money could be used for school construction or to reduce property taxes.
When critics talk about new taxes, they are referring to details like the 1-cent increase in the use tax for car sales. The use tax isn't part of the county-based tax, so this would be a net increase of about $53 million. Unlike the $400 million for schools, the proceeds from the use tax would go to road funding.
The Iowa Chamber Alliance, a coalition of 16 chambers of commerce, hasn't taken a formal stand on the bill. But the group's lobbyist, David Roederer, said he has a long list of concerns.
His group supported the original version of the tax in 1998, a decision that was based on the fact that the tax was locally controlled and had to be renewed. The current proposal would take away both elements.
"One of the things we told people was that it was going to expire in 10 years and that people would have the option at that point to continue with it or not," Roederer said.
Supporters of the measure focused on the potential for tax savings.
"This is a property tax reduction," said Margaret Buckton, a lobbyist for the Iowa Association of School Boards.
Under the proposal, local school officials could designate part of the state money for property tax cuts. The Iowa Farm Bureau supports the bill largely because of possible property tax savings in rural areas.
Republican supporters of the measure also highlighted the property tax savings.
"For my citizens, out of their pocketbook, this is a net tax decrease," Kaufmann said.
The bill has a long way to go. It must pass the House Education Committee. Then, because it deals with taxes, it must pass the House Ways and Means Committee. If the measure makes it to the House floor and passes, it must go through a parallel process in the Senate.
The last stop would be Gov. Chet Culver's desk. Culver has said he supports the bill in principle.
"I'm very open on that issue to try to arrive at consensus," he said Tuesday.
The proposal -- which would make the 1-cent tax permanent and statewide -- was recommended by a five-member subcommittee. The next stop is the House Education Committee, where debate could begin as soon as next week.
There was little doubt the subcommittee would give a quick thumbs-up. Three of the five members are co-sponsors of the bill: Reps. Roger Wendt, D-Sioux City, Royd Chambers, R-Sheldon, and Jeff Kaufmann, R-Wilton.
John Gilliland, a vice president for the Iowa Association of Business and Industry, was one of a succession of lobbyists who testified.
"At the end of the day, the fact is there are new taxes," he said about why his group opposes the bill.
All 99 counties have adopted the county-based version of the tax, known as the school infrastructure local option tax, or SILO. Right now, counties get to keep most of the proceeds from local sales.
The statewide version of the tax would reduce the regional differences in the payment levels for schools. The state would gather the projected $400 million and distribute it to schools based on an enrollment formula. They money could be used for school construction or to reduce property taxes.
When critics talk about new taxes, they are referring to details like the 1-cent increase in the use tax for car sales. The use tax isn't part of the county-based tax, so this would be a net increase of about $53 million. Unlike the $400 million for schools, the proceeds from the use tax would go to road funding.
The Iowa Chamber Alliance, a coalition of 16 chambers of commerce, hasn't taken a formal stand on the bill. But the group's lobbyist, David Roederer, said he has a long list of concerns.
His group supported the original version of the tax in 1998, a decision that was based on the fact that the tax was locally controlled and had to be renewed. The current proposal would take away both elements.
"One of the things we told people was that it was going to expire in 10 years and that people would have the option at that point to continue with it or not," Roederer said.
Supporters of the measure focused on the potential for tax savings.
"This is a property tax reduction," said Margaret Buckton, a lobbyist for the Iowa Association of School Boards.
Under the proposal, local school officials could designate part of the state money for property tax cuts. The Iowa Farm Bureau supports the bill largely because of possible property tax savings in rural areas.
Republican supporters of the measure also highlighted the property tax savings.
"For my citizens, out of their pocketbook, this is a net tax decrease," Kaufmann said.
The bill has a long way to go. It must pass the House Education Committee. Then, because it deals with taxes, it must pass the House Ways and Means Committee. If the measure makes it to the House floor and passes, it must go through a parallel process in the Senate.
The last stop would be Gov. Chet Culver's desk. Culver has said he supports the bill in principle.
"I'm very open on that issue to try to arrive at consensus," he said Tuesday.
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Steve wrote on Feb 5, 2008 1:04 PM: