Iowa taxpayers have sticker shock; debates must address issue

By Ed Wallace ----

It is time for Terry Branstad and Chet Culver to utilize the remaining debates to discuss what really plagues Iowans.

This autumn, as thousands of Iowa businesses and homeowners begin opening up their property tax statements, they will be reminded of Iowa's increasing reliance on property taxes. It reminds us that we need to revisit the one issue that plagues Iowa's ability to grow small businesses and encourage entrepreneurial startups. Sticker shock has arrived and hardworking Iowans can't keep paying the bill.

As we head through the season of soaring political rhetoric, empty promises by elected officials, and television commercials that discuss complex issues in 30-second snippets, Iowa must begin to chip away at the inability to address our overreliance on property taxes and focus on what exactly property taxes are paying for. Clearly, a more thoughtful dialogue needs to emerge during the Oct. 7 and Oct. 21 gubenatorial debates.

Most Iowans agree that property taxes are to pay for services directly related to schools, fire protection, public safety, debt service and road maintenance. Local government must be held accountable to the taxpayer for the amount and use of property tax revenue. Once taxpayers know exactly what basic services are provided in the overall tax system, they can then decide through voter participation if other services should be added or funded.

As a state, we must control property taxes through minimal shifting between classes of property taxpayers. Local governments need to eliminate additional services or expenditures that aren't clearly outlined. They need to share with other local governments to reduce their costs, and if additional programs and expenditures are needed, then they should be added by a vote of the people.

Executive branch leadership is needed now more than ever. The Legislature underfunded the homestead tax credit by 35 percent and the ag land tax credit by 18.6 percent last year. Commercial and residential taxpayers need predictability as Iowa weathers this current fiscal storm.

The sticker shock of the I-JOBS bonding program seems to be the one area where many rural taxpayers begin to wonder if Des Moines is listening. Two Iowa Department of Management reports have been ambiguous, at best, on the computation method used to demonstrate job growth. However, it is universally agreed that the repayment of the I-JOBS debt and interest will cost at least $55 million per year for the next three years and an undeterminable amount for over 20 more years. There is even question as to whether the academic revenue bonds for the University of Iowa rebuilding is being properly counted as I-JOBS debt.

Taxpayers in our great state are ready for a clearer picture of the state's finances and what taxpayer dollars are paying for. The gubernatorial dialogue of this month must focus on policy and solutions and help Iowa taxpayers understand why they are paying the bill.

Ed Wallace is the president of the nonpartisan Iowa Taxpayers Association, comprised of 160 companies in and around Iowa. Comments: ewallace@

iowataxpayers.org