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'The Watchdog'

Questions and Concerns

posted on April 12, 2019

We're Still Talking Property Taxes

Believe us; it isn’t because we love property taxes!

Actually, we feel for Iowans who can relate to what one of our members said: “Property taxes have become a ‘ball and chain’ around the property owner’s ankles and a burden beyond the ability to pay.”

After weeks talking about a property tax reform bill in the Iowa House that would create a city and county “transparency trigger,” we have heard some questions and comments:

  1. What is a transparency trigger? In short, it is additional steps of required transparency that are triggered if a city or county proposes budget increases of more than two percent above the previous year’s, followed by a public hearing where citizens can weigh-in on the proposed budget, and then an affirmative vote by the council members or supervisors.
  2. Will this proposal limit my property’s assessment? No. But isn’t your PROPERTY TAX BILL the real source of frustration?  Increasing property tax bills are a direct result of a city’s or county’s budget. The assessor cannot lower a property owner’s tax bill, but it is within the ability of a city council member or a county supervisor to reduce the tax rate that impacts a city or county budget.
  3. Will this have a crippling effect on city and county budgets? No. It simply requires local officials to have an open discussion with their citizens to increase their budget more than two percent from the previous year. If property tax growth in excess of two percent is explained and justified to local citizens, they likely would be supportive of their council or board of supervisors moving forward with a budget at the higher funding level.
  4. Will my city and county be penalized for growing? No. New growth and improvements to existing properties do not count toward the two percent calculation for the transparency trigger.
  5. Will this reduce local control of cities and counties? No. Under this legislation, the present rate cap is eliminated, and the only firm cap that exists is the two-percent allowable growth if the governing body cannot justify an increase above that to the citizens they represent. Budget and tax decisions would still be decided at the local level – city councils, county boards, and their voters.
  6. What would happen to my tax bill? We modeled a small city that saw the assessed values of homes grow between 8 and 12 percent in a given year. Under our existing system that keeps property taxes on autopilot, those homeowners could have seen an increase in their property tax bills of a corresponding 8 to 12 percent. However, if the property tax cap ITR is proposing were in place, the increase in property taxes would only have ranged from 0.1 to 3.8 percent.

Does making local government budget increases more closely align with household budgets sound good to you?

Do you think local elected officials should have to act transparently if they intend to raise your taxes?

Then make your voice heard and join the large number of ITR members who have emailed their legislators!

Are All Medicaid Recipients Still Eligible?

States that have audited their public assistance programs have found shocking results.

  • Michigan identified more than 7,000 lottery winners who were still collecting welfare, some with jackpots as high as $4 million.
  • Illinois uncovered more than 14,000 dead enrollees on Medicaid.
  • Utah and Maine found individuals who were using their welfare benefits exclusively out-of-state.
  • Arkansas discovered more than 20,000 individuals with high-risk identities, including people using stolen identities or even fake Social Security numbers, who were enrolled in its program.
  • In Louisiana, the legislative auditor made a random selection of 100 Medicaid recipients and determined that 82 of those individuals did not qualify for the benefits they were receiving.
  • In March of 2019, Oregon announced that a Medicaid audit will save the state more than $100 million annually by ending improper payments to people who don’t qualify for the program.
  • North Carolina found that they improperly paid more than $100 million in Medicaid claims, which included overpayments to providers and benefits paid to ineligible recipients.

It is unclear how much Medicaid fraud may be present in Iowa according to a Des Moines Register op-ed by ITR Policy Director John Hendrickson and Buckeye Institute Executive Director Rea Hederman, Jr.

Iowa taxpayers deserve to know their hard-earned dollars are being spent appropriately. To allow Medicaid fraud is a fleecing of taxpayers, and it is unfair to those Iowans who need the services that Medicaid provides.

Last week, the Iowa Senate passed a bill addressing public assistance eligibility with a 30-18 vote. This bill has been sent to the Iowa House.

NFIB Small Business Economic Roadshow

What are you doing for lunch Tuesday, May 7?

The National Federation of Independent Business has invited ITR members to hear from two nationally-recognized economists on the current state of the small business economy, trends in consumer spending, and how public policy might impact both.

Get more information and RSVP here.

Issue Updates:

Property Tax Reform
HF 773 
(formerly HSB 165) status:  Introduced, placed on Ways and Means calendar

The best way to provide long-term property tax relief is to control the growth of government at the local level and establish a strong truth in taxation measure. READ MORE

No Change from Last Week

Occupational Licensing

HF 752 status: Approved by full House 54-44 on April 1; sent to Senate 

This bill helps ensure occupational licensing isn’t excessive or overly burdensome. Reducing these barriers can lead to job creation, more entrepreneurial opportunities, lower prices, and increased incomes.

Stopping Medicaid Abuse
SF 334
 status: Approved by full Senate 30-18 on April 1; sent to House

This bill provides additional oversight of Medicaid and other public assistance programs. It is important that regular audits are conducted to ensure benefits are applied only to those who truly need the services in order to safeguard taxpayer dollars. READ MORE

Whistleblower Protections
SF 502 status: Approved by full Senate 49-0 on March 26; Passed House State Government Committee

Strong whistleblower protections are necessary to defend taxpayer dollars. This bill extends Iowa’s current whistleblower protections to public sector employees who report suspected wrongdoing to their human resources director and mandates training for new public employees on the procedure for reporting. Fear from the repercussions of reporting wrongful expenditures of public dollars can lead to silence, which may result in the ongoing misuse of your tax dollars. Public employees acting in your best interest deserve to be protected for bringing corruption to light.

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