In the upcoming session of the Iowa Legislature, which begins Jan. 9, Farm Bureau will focus on coupling the Iowa tax code with federal tax code for Section 179 asset expensing; on creating a long-term, dedicated funding source to support Iowa’s critical water quality and soil conservation programs; on protecting property taxpayers; and on other key legislative initiatives.
"All of these issues have been developed through our grassroots policy development process and approved by county delegates," said Craig Hill, president of the Iowa Farm Bureau Federation (IFBF). "We will make sure that state lawmakers put a priority on passing them in the 2017 session."
Tax coupling became a key Farm Bureau focus after the federal government passed legislation to permanently extend Section 179 asset expensing in late 2015. The federal measure allows for accelerated depreciation up to $500,000 in one year for both new and used equipment purchases.
Iowa lawmakers, in the 2016 legislative session, retroactively coupled state tax code with the federal rules for Section 179 asset expensing, but only for the 2015 tax year. During the 2017 session Farm Bureau will work to make the state tax code with Section 179 asset expensing at the $500,000 level permanent.
"Farm Bureau members strongly believe that this important economic tool should not be taken away," Hill said. "In addition, farmers need consistency between state and federal tax rules and should not be required to maintain two sets of books for different tax rules."
Water quality funding
Funding for water quality and soil conservation will again be a focus for Farm Bureau in the 2017 session.
Iowa farmers are taking on the challenge to do more for improving water quality and conserving the state’s valuable topsoil, Hill said. Farmers have made significant progress in reducing nutrient loss in the past three decades and, as a number of surveys show, have embraced Iowa’s science-based water quality initiative, officially called the Iowa Nutrient Reduction Strategy.
"To continue that momentum, Farm Bureau will work with lawmakers to adequately fund programs to hold up the state’s share of the long-standing partnership with farmers on conservation and water quality," Hill said.
Last year, various measures to create a sustainable funding source for water quality and conservation were proposed, but only one plan came up for a vote in the 2016 session. That bill, which IFBF supported, would have prioritized nearly $500 million in existing state funds to create a long-term, sustainable funding source. The Iowa House passed the measure, and it was supported by Gov. Terry Branstad, but was never considered by the Senate.
In the end, the 2016 legislative session passed one-year status quo state funding for the water quality initiative, conservation cost-share programs and efforts to close ag drainage wells. "Status quo is certainly not Iowa farmers’ goal," Hill said.
During the 2017 legislative session, Farm Bureau will continue to work on programs that focus on sustainable and dedicated funding with a clear focus on implementing the Iowa Nutrient Reduction Strategy.
Limiting property taxes
Farm Bureau, Hill said, will remain vigilant during the session to make sure that property taxes continue to be a priority for lawmakers as they try to craft a budget in tight fiscal conditions. "Iowans will pay more than $5 billion in property taxes this year, and the Legislature has the opportunity to address several measures that help protect property taxpayers from further increases," he said.
One of those is property tax contributions to Iowa’s mental health system. Farm Bureau will work to ensure that property taxpayer contributions to the state mental health system remain limited and controlled, Hill said.
Property taxpayers’ contributions to this system have operated under a limited and controlled statewide dollar cap since 1995. This statewide dollar cap is again scheduled to sunset next year, and Farm Bureau will work to permanently extend the statewide dollar cap into the future and protect ag landowners from property tax increases.
During the past four fiscal years (fiscal year 2014 through fiscal year 2017), property taxpayers have saved a total of $41 million through a funding mechanism that ensures that increases in state supplemental aid to K-12 schools is fully paid for by the state and caps contributions from property taxes.
Farm Bureau will work to ensure that this provision, which is also set to expire, is extended into the fiscal year 2018 budget and beyond.
Farm Bureau will also work to ensure that the Ag Land/Family Farm and the Homestead property tax credits remain unchanged from last year’s levels.
Other key issues
Other issues that Farm Bureau will monitor during the 2017 session include the infrastructure program for renewable fuels, foreign animal disease preparedness, trespassing laws and any regulatory reform measures.