Iowa Freedom Agenda Update

Taxes

Iowa Governor Tom Vilsack proposed a variety of tax increases in his Condition of the State address on January 13th. This includes a cigarette tax increase of 60 cents a pack, which would raise the total to 96 cents and cost Iowans $108 million dollars. (AP 2/23/04) He also proposed adding sales taxes to seventeen different services including accounting and engineering, creating another $208 million burden. Leaders in the Republican controlled state legislature will allow debates about these tax increases, but many including Senate Majority Leader Stewart Iverson say that they will vote against them. This debate is intertwined with the Republican education plan, which would give schools a 2 percent per pupil funding increase instead of the six percent that Vilsack has proposed. The governor has promised to veto the legislature’s education proposal. (Des Moines Register, 2/20/04)

Tuesday, February 24th, a bill passed out of the Iowa House Ways and Means Committee fourteen to ten that would increase property taxes on gambling institutions. Fiscal conservatives pointed out that this would be the largest property tax increase in state history. This bill will cost $202 million initially and will take $51 million annually from gambling institutions. (AP 2/24/04)

Also on the 24th, Republican legislators put forth a plan to give tax credits to those who invest in long term health care. People would get a tax credit equal to what they pay in premiums up to fifty percent or $500. (AP 2/24/04) The proposal was intended to encourage Iowans to plan for their retirement. Democratic critics in the legislature said that this plan would not help those that could not afford to pay for insurance now.