(Des Moines, IA) It is funnel week at the Statehouse and conversations concerning the maintaining Iowa’s roads and highways, tax reduction and fiscal responsibility on the rise. State Senators Bill Anderson (R-Pierson) and Jake Chapman (R-Adel) have crafted legislation addressing all these issues and how the State limits its spending.
The Iowa Trust Act would offer another solution in how the State sets its spending limit. By law, the State of Iowa’s current spending limitation is 99 percent of both revenue and savings. The Iowa Trust Act creates a new option that would focus on the wage and salary growth factor of Iowans. Historically, that line item is a 3.8 percent increase annually. Senators Anderson and Chapman are proposing the State uses whichever is less: the spending limitation of half (1.9%) of the wage and salary growth factor increase or using the current 99 percent spending limitation.
“Iowans trust their decision-makers to be fiscally responsible with their money,” said Senator Anderson. “The Iowa Trust Act is more comprehensive – it focuses on sound budgeting principles and easing the burden on the taxpayers. It also provides additional funding to meet Iowa’s growing infrastructure needs.”
The Senators’ plan includes allocating the remaining balance of the money from the spending limitation savings to:
- Cash Reserves.
- Creating a 2 percent safety net fun.
- Shifting 1 percent of the remaining balance to go toward the secondary roads fund.
- $60 million to the Taxpayer Trust Fund.
- Establishing a Personal Income Tax Reduction Fund (All remaining cash balances will be applied to this fund and will reduce all tax rates equally).
“It is common sense to require our Government to grow at a slower rate than our household incomes,” said Senator Chapman. “Projections indicate that within the next five years, after enactment, the savings will generate nearly $350 million to be returned annually to Iowans. Additionally, with the new spending limitation we can maintain our secondary roads without raising taxes. Our legislation is a good first step to change the landscape of Government spending.”