Sometimes, you have to wonder why we bother electing a General Assembly. A governor, apparently, is all we need.
For fresh evidence, look no further than Gov. Terry Branstad’s Department of Revenue, which is seeking to hand the state’s manufacturers a nearly $40 million tax cut. But it’s not urging the Legislature to pass a bill. Instead, the department is simply rewriting its own administrative rules.
“The governor’s office has decided he has the authority to give a massive tax cut to Iowa’s largest corporations,” said Sen. Joe Bolkcom, D-Iowa City, chairman of the tax-writing Ways and Means Committee. He points out that the governor, in July, vetoed funding for public schools, universities and community colleges, citing a need for budgetary restraint.
“The cookie jar is apparently replenished,” Bolkcom said.
At issue is an existing sales-tax exemption for manufacturing machinery and equipment, and how, exactly, it applies to replacement parts. Businesses want the sales-tax exemption clarified and expanded as part of a broader effort to keep tax laws in step with changes in technology and manufacturing methods.
“In undertaking this rule-making, the department is carrying out its statutory obligation to prescribe rules where the law does not provide clear guidance,” said Victoria Daniels, the department’s public information officer, in an email.
It’s entirely possible this is a fine idea. But it’s the sort of $40 million idea that should be taken up by the 150 lawmakers we elect to watch the state’s purse strings. The revenue department seemed to agree back in 2013, when it offered legislation including the tax exemption language.
But 2013 also was the year lawmakers approved a $300 million commercial property-tax relief package, touted by the governor as the largest tax cut in Iowa history, which benefits manufacturers. Democrats who run the Senate didn’t see the need to pass both a sales tax break and a big property-tax cut, which now is soaking up much of the state’s available revenue.
So now, in classic Branstad style, the executive branch is acting alone to help its friends. If the governor can close workforce centers, a juvenile home and mental health institutions, if he can privatize Medicaid and casually, stealthily detonate hard-fought legislative compromises on education and other issues, why not a $40 million tax cut? No sweat.
Branstad brushed off Bolkcom’s concerns, poking fun at the senator’s past criticism of the administration’s $110 million tax giveaway to a Lee County fertilizer plant.
“I just think that maybe he should tone it down a little bit,” Branstad said Monday.
Tone it down. That’s Branstad’s default response to questions about his misguided policies. You want clean water? Tone it down. You want adequately funded schools? Tone it down. You want a governor and not an emperor? Tone it down.
Do his powers have limits? Of course. Branstad says, for example, he can’t remove anyone from the Board of Regents. Funny, but in this case, his hands are tied.
The Legislature’s Administrative Rules Review Committee meets next week to look over the proposed tax cut. I hope Republicans also see this as a troubling power grab and join with Democrats to apply the brakes. If the law is unclear, as the department insists, it should be up to elected lawmakers, not appointed bureaucrats, to clarify it, especially with tens of millions of dollars at stake.
Because, after all, if a governor has the power to cut taxes through administrative rules, a governor could also raise taxes through a rule change.
http://www.thegazette.com/subject/opinion/blogs/24-hour-dorman/who-needs-a-general-assembly-20151006
For fresh evidence, look no further than Gov. Terry Branstad’s Department of Revenue, which is seeking to hand the state’s manufacturers a nearly $40 million tax cut. But it’s not urging the Legislature to pass a bill. Instead, the department is simply rewriting its own administrative rules.
“The governor’s office has decided he has the authority to give a massive tax cut to Iowa’s largest corporations,” said Sen. Joe Bolkcom, D-Iowa City, chairman of the tax-writing Ways and Means Committee. He points out that the governor, in July, vetoed funding for public schools, universities and community colleges, citing a need for budgetary restraint.
“The cookie jar is apparently replenished,” Bolkcom said.
At issue is an existing sales-tax exemption for manufacturing machinery and equipment, and how, exactly, it applies to replacement parts. Businesses want the sales-tax exemption clarified and expanded as part of a broader effort to keep tax laws in step with changes in technology and manufacturing methods.
“In undertaking this rule-making, the department is carrying out its statutory obligation to prescribe rules where the law does not provide clear guidance,” said Victoria Daniels, the department’s public information officer, in an email.
It’s entirely possible this is a fine idea. But it’s the sort of $40 million idea that should be taken up by the 150 lawmakers we elect to watch the state’s purse strings. The revenue department seemed to agree back in 2013, when it offered legislation including the tax exemption language.
But 2013 also was the year lawmakers approved a $300 million commercial property-tax relief package, touted by the governor as the largest tax cut in Iowa history, which benefits manufacturers. Democrats who run the Senate didn’t see the need to pass both a sales tax break and a big property-tax cut, which now is soaking up much of the state’s available revenue.
So now, in classic Branstad style, the executive branch is acting alone to help its friends. If the governor can close workforce centers, a juvenile home and mental health institutions, if he can privatize Medicaid and casually, stealthily detonate hard-fought legislative compromises on education and other issues, why not a $40 million tax cut? No sweat.
Branstad brushed off Bolkcom’s concerns, poking fun at the senator’s past criticism of the administration’s $110 million tax giveaway to a Lee County fertilizer plant.
“I just think that maybe he should tone it down a little bit,” Branstad said Monday.
Tone it down. That’s Branstad’s default response to questions about his misguided policies. You want clean water? Tone it down. You want adequately funded schools? Tone it down. You want a governor and not an emperor? Tone it down.
Do his powers have limits? Of course. Branstad says, for example, he can’t remove anyone from the Board of Regents. Funny, but in this case, his hands are tied.
The Legislature’s Administrative Rules Review Committee meets next week to look over the proposed tax cut. I hope Republicans also see this as a troubling power grab and join with Democrats to apply the brakes. If the law is unclear, as the department insists, it should be up to elected lawmakers, not appointed bureaucrats, to clarify it, especially with tens of millions of dollars at stake.
Because, after all, if a governor has the power to cut taxes through administrative rules, a governor could also raise taxes through a rule change.
http://www.thegazette.com/subject/opinion/blogs/24-hour-dorman/who-needs-a-general-assembly-20151006
