Iowa House, Senate focus on separate issues

DES MOINES - Partisans in the Iowa House and Senate continued to move on two divergent paths Thursday, with Republicans focused on tax relief and Democrats on bolstering state aid to schools, with no sign of common ground emerging.

Representatives voted 82-14 to approve a bill that would conform Iowa's income tax code with federally enacted changes so that businesses, teachers, elderly and low-income Iowans would pay about $96 million less in taxes on their 2015 incomes.

‘An investment in Iowa'

'This is an investment in Iowa across the board. As we invest in education, we must also be prepared to invest in Iowans,” said Rep. Zach Nunn, R-Bondurant, the bill's floor manager.

'To pull the rug out from under Iowans who have made business investments in our state at the last minute is truly devastating to some of our local economies, whether that be educators, small businesses and family farmers,” he added.

The tax relief would lower the state's fiscal 2016 revenue to about $6.95 billion after a state panel in December shaved about $130 million from expected tax collections to reflect current economic factors.

State spending for the current year is set at $7.174 billion, so House Republicans want to lower the budget's projected positive ending balance to cover the tax coupling impact.

Rep. Sharon Steckman, D-Mason City, noted the House GOP approach was different from that of Gov. Terry Branstad, who did not seek retroactive coupling for the 2015 tax year and proposed a limited $49 million tax coupling plan for the 2016 tax year. She said the governor took that course 'because he does not think it's fiscally sound and neither do I.”

'Would I like to vote yes? Yes, I would,” Steckman said. 'But I'm not going to because I want to make sure that our kids have the education they deserve and we spend our money wisely on that.”

Senate Majority Leader Mike Gronstal, D-Council Bluffs, said his majority caucus would consider what the House passed, but he expressed doubt about moving ahead with a concept at variance with the governor, given that a similar course of action last session for education funding ended with a veto.

'I don't like doing things that I know will get a certain veto. That doesn't seem to me to make a lot of sense,” Gronstal said.

Working on Education

Legislative Democrats were pushing for a 4 percent increase in state aid to K-12 schools for fiscal 2017 when a House-Senate conference committee held its first meeting Thursday aimed at breaking an impasse early in the session. House Republicans favor a 2 percent increase.

Senate Democrats also passed out of subcommittee Thursday legislation that would give schools a 4 percent increase for fiscal 2018 and pledged to abide by the state's forward-funding law to set the funding level for schools within the session's first 30 days.

'We're going to keep fighting to get what we can,” Gronstal said.

House Speaker Linda Upmeyer said she hoped lawmakers would move quickly to resolve the K-12 funding and tax coupling issues so schools and Iowans preparing their taxes would have certainty.

'I think we have to come to consensus at some point, and we can do it sooner or we can do it later, and there's no reason not to do it sooner,” she said.