On Wednesday, I had the pleasure of meeting with veterans from all across the state, including these veterans from Marion County, as they stopped in the Capitol. Concerned with the action the legislature was taking to support those who have defended our freedoms, these men and women presented information on how legislation changes would affect them. I was pleased to report to them the Senate was taking action on SF 303. This bill would provide income tax exclusion on retirement pay received by veterans from the federal government for any military service.
This legislation is part of Governor Branstad’s Home Base Iowa Initiative. This initiative is the Governor’s plan to bring veterans to Iowa after they complete their service. If this legislation passes out of the legislature, it would make military pensions fully exempt from state income tax, putting Iowa on the same level as states like Florida and Texas and allows us to be more competitive with our neighboring states with military exemptions already in place. Under current tax law, all taxpayers under the age of 55 cannot claim pension exclusion. If Iowa wants to maintain its competitiveness with other states in bringing these servicemen to our state, action needs to be taken.
There has been extensive conversation surrounding the funding of infrastructure. It seems that the only solution people are willing to offer is a gas tax. While I feel that properly funding our infrastructure is a must to maintain Iowa’s ag-based economy, the gas tax is not the only alternative, nor, in my opinion, the best one. For families who are already living paycheck to paycheck, a tax on their means of getting to work is not the right choice. For small convenience stores on the border that will lose sales to gas stations right across the border, a tax that makes Iowa less competitive is not the right choice. For a state where cars have ever increasing fuel economy and soon will be running off alternative sources of energy, an unsustainable tax is not the right choice for Iowa.
For these reasons, l have introduced a bill in the Senate that would take 2 percent off the top of the general fund receipts to be transferred into the road use tax fund. This transfer would generate nearly $140 million in the first year to address the needs of roads and bridges in Iowa. As an annual transfer, it would be an ongoing response to the vital needs of our districts road system. Because it is tied to the general fund receipts, it is also tied to inflation and would eliminate the need for future increases to the fuel tax. I look forward to working with my colleagues to resolve the growing infrastructure demands and put Iowa’s agrarian economy on solid footing.