Iowa Senate advances measure requiring two-thirds majority to change income tax rates
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Iowa Senate advances measure requiring two-thirds majority to change income tax rates

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DES MOINES -- Iowa voters could get the chance to amend the state constitution with a requirement that any legislation seeking to change or repeal state income tax rates would need a two-thirds affirmative majority of both houses of the General Assembly to become law.

Members of the Senate Ways and Means Committee, on an 11-5 party-line vote Wednesday, approved a resolution that would put the supermajority requirement on the ballot by 2022 if the measure is passed in exactly the same form by the current Legislature and the subsequent 89th General Assembly seated after next year’s election.

“Iowans will have an opportunity to put a limitation on government spending,” said Sen. Jim Carlin, R-Sioux City, in pushing for Senate Joint Resolution 16.

“We are putting the squeeze on middle-income people to the point where they literally don’t have any disposable income at all,” Carlin told Senate colleagues. “This is just a step that Iowans can take to say let’s put some brakes on the spending and put some of this decision-making power where it belongs — with the people who actually pay the bills.”

Sen. Herman Quirmbach, D-Ames, one of five Democrats who opposed the resolution, said majority Republicans were selectively applying the standard to income taxes but not to more regressive tax policies, such as the state sales tax.

“If we’re going to restrict taxes, we really ought to do it across the board,” Quirmbach said.

Quirmbach said the provisions of SJR 16 run counter to democratic principles, noting that “this would give a minority a veto on significant fiscal legislation.”

The resolution, which was forwarded to the full Senate, was one of several tax policy bills that moved through the subcommittee and committee process Wednesday.

Sales tax extension

The Senate panel also voted 15-1 to approve House File 546, which would extend by 20 years to 2051 the 1-cent sales tax to support school infrastructure. Republicans amended the House version to provide more property tax relief associated with the measure.

Originally passed in 2008, the Secure an Advanced Vision for Education Extension, or SAVE, will expire in 2029 without legislative action.

The 20-year time frame of the original law coincided with the typical 20-year property tax-backed school bond. Since then, it has been used for improvements to school safety, STEM programs, art and science labs, fine arts facilities, air conditioning that has decreases days lost to extreme temperatures and to reduce property taxes, its advocates say.

Because SAVE is set to expire in 2029, school boards say they already are feeling the impact of a shortened bonding stream. Extending SAVE now would allow districts to take advantage of low interest rates.

Also Wednesday, a Senate Ways and Means subcommittee approved a property-tax measure that would apply a “soft cap” on annual revenue growth to cities and counties by 2 percent with an added “hard cap” yearly increase of 3 percent that elected officials could tap with a supermajority vote.

Voters could petition for a reverse referendum to challenge property tax decisions under Senate Study Bill 1260.

Sen. Randy Feenstra, R-Hull, chairman of the Senate Ways and Means Committee, said the bill was designed to rein in local property tax bills while providing exemptions to exclude some budget areas from the limitations and avoid thwarting high-growth communities.

Representatives of taxpayer, business and other groups spoke in favor of the bill’s “speed bumps,” while several mayors urged legislators to “push the pause button” for more study.

“I believe that this bill puts a straitjacket on local governments,” said subcommittee member Sen. Pam Jochum, D-Dubuque.

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