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Budget managers were anxiously awaiting word today on how big of a funding cut they will have to absorb over the coming months to bring state spending in line with recession-ravaged revenues.

“It’s going to be terrible,” said Sen. Jack Hatch, D-Des Moines, co-chair of the House-Senate health and human services budget subcommittee. He expects Gov. Chet Culver will order an across-the-board spending cut ranging from 3 percent to 5 percent through June 30 to offset flagging tax collections.

“I think there’s an expectation that there is a cut coming,” said Brad Hudson of the Iowa State Education Association, the state’s largest teachers’ union. “The anxiety is how low or how high it is going to be. Everybody knows it’s coming, we’re just waiting to see what the number is.”

Hudson said many K-12 school districts have reserve funds and spending authority to make mid-year adjustments to weather the economic downturn and minimize the reliance on property taxes to backfill lost state aid.

When Iowa lawmakers were considering creation of an income tax credit for filmmakers in 2007, they passed a major amendment without knowing it would increase the state’s cost by tens of millions of dollars annually.

The amendment – allowing filmmakers to sell their unused tax credits – was approved by the House Economic Growth Committee by a voice vote with little discussion and no objections from either Republicans or Democrats.

Before the amendment was adopted, the nonpartisan Legislative Services Agency estimated in a memo to lawmakers that the credit would cost less than $800,000 in revenue losses this fiscal year, which ends June 30. After the amendment was adopted, no new estimate was prepared.

An estimate in March by the Iowa Department of Revenue and Finance placed this year’s revenue loss far above $800,000 – at $26.3 million.

A report in August from the Department of Revenue predicts the tax credits will cost the state $77.4 million this year.

Tags: iowa film, tax

Thousands of people participated in a “tea party” tax protest at the Capitol today, an event that took place 300 cities across the nation.

“My name is Doug Burnett and, frankly, I’m mad as hell,” said the Sherman Hill resident who started Burnett Reality about nine years ago and helped organize Wednesday’s protest at the Capitol.

Lt. Mark Logsdon of the Iowa State Patrol estimated about 3,000 people attended the protest.

Speakers such as Burnett publicly voiced opposition to a range of issues from federal bailout money to state spending. A few spoke against the Iowa Supreme Court ruling this month that allows same-sex marriage.

The events were scheduled in connection with Wednesday’s deadline to file federal income tax returns.

Awesome video from http://www.desmoinesteaparty.com/

Tags: Taxes

From the Register:

Video Here

More than 500 people who are upset with a plan to change Iowa’s tax laws were cleared from a hearing tonight at the Iowa House after they interrupted multiple times.

House Speaker Pat Murphy, D-Dubuque, cleared the crowd at about 8:30 p.m. The decision brought about loud protests as the crowd was escorted from the chambers by Iowa State Patrol officers.
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“This is the most atrocious thing I’ve seen in the history of the 15 years I’ve been a lobbyist. Pat Murphy has acted like a jack-booted Nazi,” said Ed Failor Jr., president of Iowans for Tax Relief, a conservative taxpayers’ rights group from Muscatine with 50,000 members..

Failor Jr. was escorted from the House chambers after Murphy overheard him speak with the media.

House rules say that no protesting or advocating can be done in the House.

Murphy said he should have ordered the chambers cleared much sooner than he did, since several of the speakers were booed.

“The idea behind the public hearing is to give people public input and allow people the ability to speak for and against the bill. This is not an athletic event,” Murphy said.

After the majority of the public was removed, the scheduled speakers were allowed to continue. The hearing is scheduled to last until about 9:45 p.m.

The proposal, House File 807 and Senate Study Bill 1317, would end a practice known as federal deductibility. That means Iowans could no longer subtract what they pay in federal income taxes from their income when figuring their state taxes.

Ending federal deductibility without changing anything else would mean Iowans would pay an estimated $595 million more in taxes. However, Democrats have proposed a plan that would instead lower the state income tax rates and increase certain tax credits to offset the increase.

Democrats have maintained that two-thirds of Iowans would either see a tax savings or no change at all in their taxes due to the proposal.

Specific numbers show that 49 percent of Iowans who file taxes would get a break in the current tax year, while about 18 percent would see no change.

The remainder – 450,292 people – would see a tax increase, according to the Iowa department of Revenue and Finance.

Tags: Taxes

House Minority Leader Kraig Paulsen of Hiawatha said Democrats are limiting committees that scrutinize budget requests at a time when the recession has caused a $700 million or larger shortfall. He said voters need to know what choices will be made in tough financial times.

As they raise budget issues, Republicans have repeatedly argued that Democrats aggravated the shortfall by spending too much in previous years. On Wednesday, Paulsen submitted a list of questions he wants Democrats to answer, including how many new state workers have been added and how across-the-board spending cuts would be implemented.

Governors traditionally submit a proposed state budget to the Legislature as part of their annual report on the state’s condition. But Culver decided not to do that this year, saying he needs more time to assemble his spending plan and understand how much federal aid is headed to the state.

The governor is required to submit a proposed budget by Feb. 1, and Culver said he’s likely to do so next week. McCarthy argued that lawmakers traditionally use the governor’s proposed budget as a base to work from and it doesn’t mak

Tags: budget, culver

How did we get here?

If you want to understand all the intricacies that would lead to the Environmental Protection Agency to propose [in 18,000 pages of bureaucratic nonsense]  what would amount to a tax on livestock as much as $175 per head, you will need to turn off your logic circuits and engage your touchy-feely, save-the-planet emotions.

Try to pay attention, class.

• Climate Change, née Global Warming, is a crisis that will lead to the destruction of the human race if we do not “do something.”
• Greenhouse gases cause Climate Change.
• Carbon dioxide is a greenhouse gas. [Try to exhale less, please.]
• If we call re-classify greenhouse gases [CO2, methane, nitrous oxide, et al] as “pollutants”, then the EPA must regulate them under the Clean Air Act.
• Under the Clean Air Act any entity emitting more than 100 tons per year of a “regulated pollutant” must obtain a permit in order to continue to operate.
• Any operation with more than 25 dairy cows, 50 beef cattle or 200 hogs emits more than 100 tons of carbon and would have to obtain permits under Title V of the Clean Air Act in order to continue to operate if greenhouse gases are regulated.
• At EPA “presumptive minimums” a permit would cost $175 per dairy cow, $87.50 for beef cattle, and a little more than $20 per pig.

And there you have it.  When you consider ,for example , that the average profit per hog in Iowa is estimated between $9 and $25 depending on market conditions, a $20 permit allowing said hogs to fart, will likely be met with some resistance.  But, of course, resistance is futile.  No legislation is required for this to become a reality.  All that is required is leadership at the EPA with a very anti-business agenda.  In other words, anyone that Obama will nominate.  Indeed there is already talk of Obama pushing to elevate EPA administrator to a cabinet-level position.

As a prediction, I will posit that accompanying any such anti-agriculture tax will be a new breed of subsidies to help producers “modernize” their operations (perhaps with some sort of tubing to collect the earth killing methane).  This will ensure that the only ones hurt by such measures will those citizens stupid enough to buy food.

Tags: climate change, Environment