Economic and Tax Concerns for Rural Iowa Ð District 55
The past 10 past ten years I have paid a lot of attention to the economic growth of our area and the opportunities or problems that confront us. Crawford, Ida, Monona and Harrison counties qualify for enterprise tax credit. This means we are in the bottom 25% of counties when it comes to income, growth and poverty levels. The purpose of the enterprise tax credit is to help those counties improve their income, grow and have fewer people in the poverty classification. We have been eligible for these tax credits for 10 years but still remain in the lower 25% of counties.
I have attempted to analyze our area to find an answer. We are amongst the highest in senior citizens. We are not showing retail growth, especially in Ida, Harrison and Monona counties. We need more retail opportunities in these counties. The retail sales go to the regional shopping centers in nearby cities. In our area Sioux City and Council Bluffs are the two largest. Both of these cities have expanded their retail opportunities and when you check their parking lots you find a lot of cars from our counties.
The other observation is that we have tremendous growth from Des Moines on east. We have Des Moines as our state capital, a favorite meeting place, and the new Jordan Creek Mall. Much of our revenue is spent in Des Moines. We have our regent schools in the eastern part of the state. Our students go there and take a lot of revenue with them to spend for their many needs. We have our football, basketball, baseball and sport activities at our regent schools. Again, many people attend these activities and spend their money.
I am on the board of the Department of Economic Development. The past nine months most applications have come from Des Moines and east. Again, there will be tremendous growth. There has been little activity from our area.
What is my point? We spend a lot of money in the retail shopping centers and there is much revenue growth in eastern Iowa. All 99 counties collect a local option sales tax. These large retail shopping centers are using our money Ð your money Ð to build streets, roads, water systems, and schools. We use their streets, roads and water systems, but to a much lesser degree than those who live there. We do not use their schools.
This is why I am such a strong advocate for a statewide local option sales tax for school infrastructure and property tax relief. I want an equal distribution of local option sales tax revenue to each part of the state on a per student basis. The money should come back to us for property tax relief and school infrastructure.
Again, this is not a new penny. The one-cent local option sales tax is already being paid in all 99 counties. There has been some concern about this being a permanent tax. If there ever was a tax that would benefit our area if it becomes permanent, it would be this one. As the regional shopping centers and eastern Iowa grow, we will benefit even more because we are not growing. Our population is aging and our costs for education will continue to increase.
There has been concern this money could be used for purposes other than property tax reduction and infrastructure. We have had this tax for many years and none of it has been used for other purposes. The new legislation calls for a two-thirds majority vote to use the money for other purposes. Current law only requires fifty-one percent.
The annual new revenue for District 55 is about $1,850,000. This is not a small amount and it will grow as retail tax revenue grows. If we don’t pass this, then we will not have this new money. This is the only opportunity for property tax relief that I have seen this session.
Perhaps more important is when we re-district we will have less representation for our rural areas. Our opportunities will diminish. There could be a change in the roll-back which could be a huge tax shift (more taxes especially for farmers and home owners). Lower taxes help our economy. A tax increase as a result of a change in the roll-back would have a very negative effect on us.
In my ten years in the Iowa Legislature I believe this is the most beneficial piece of legislation for rural Iowa. The bill is still being worked on and some changes are being made to make it more acceptable to all parties. There has been a lot of misleading information presented and written on this issue by some ‘special interest’ groups. I am very comfortable with my position of support on this issue and its benefits to rural Iowa.
Please feel free to contact me anytime.
Representative Clarence Hoffman
Home: 1-712-263-4884
Statehouse: 1-515-242-6447
Email: clarence.hoffman@legis.state.ia.us