March 25, 2013


It's a great problem to have, says State Rep. Dan Muhlbauer, D-Manilla.

But it's still a problem.

What should Iowa do with an estimated $800 million budget surplus?

"Who's going to get the increase and who isn't," said State Sen. Mark Segebart, R-Vail.

State Auditor Dave Vaudt says the Iowa Public Employees Retirement System has a long-term shortfall of nearly $6 billion - and that $800 million also could be used to shore up the pension fund.

Meanwhile, some Republicans have suggested giving tax-rebate checks to Iowans of more than $300.

Segebart said the surplus should go to pay for outstanding state responsibilities, like fully funding the Homestead property tax credit - which the Legislature hasn't done in recent years.

"Right now is the time to start that tradition," he said.

Segebart doesn't want the surplus money to fund operational expenses.

"They could go to one-time expenses," he said. "They could go back to the taxpayers."

Muhlbauer agreed that one-time projects such as accelerated road and bridge work makes sense, as does fully funding the Homestead credit for property owners. He doesn't like the idea of rebate checks.

"Do you want $350 going back to each one?" Muhlbauer said. "I don't think that's necessarily the wisest thing."

The topic emerged during a Carroll Chamber of Commerce Legislative Forum Saturday at Kuemper Catholic High School attended by about 100 people.

Muhlbauer said he would push for road and bridge projects with the surplus, and urged counties and cities to have shovel-ready projects on the books.

Carroll resident Frank Hermsen said it made little sense to think of sending the money back in the form of rebates when the state just years ago, under Gov. Chet Culver, imposed a 10 percent across-the-board cut in state services.

Another Carroll resident, Loretta Hansen, said she would support a gas-tax increase as well.

"I'm all for raising the gas tax if it pays for roads and bridges," she said.

Segebart has broken with many in his party in supporting a gas-tax increase of about 10 cents a gallon.

"I see needs all over the place," Segebart said.

Muhlbauer said state transportation funding falls $250 million short annually to handle basic maintenance alone.

He supports a gas-tax increase of "a little more" than 10 cents a gallon.

"Gas tax is still sitting there on the realm all the time," he said.

The big picture finances in Iowa are looking solid as well, the legislators said.

Iowa's Revenue Estimating Conference recently put state revenue projections at $6.64 billion, 5.2 percent, or $326 million above the last budget year.

"These are amazing numbers actually," Segebart said. "They're positive numbers. It shows growth in our state."

On other matters, Segebart said he supported legislation to finance a public-safety training and equipment fund that could result in a training center being developed in central Iowa for emergency personnel.

"It's something we all know is important to our communities," he said.

Segebart also backed a measure that passed the Senate mandating radon testing in school. He urged residents to do the same in their homes on a voluntary basis.

Both legislators said they strongly supported state tax credits for private schools.

"Competition's always good in anything," Muhlbauer said.

Education is expected to be a major debate topic this week in the Legislature as is the potential expansion of Medicaid.

Muhlbauer supports Medicaid expansion, saying it is the best option before Iowa. Segebart, like Gov. Terry Branstad, said he doesn't trust the federal government to make good on its commitments.

Legislators will debate major education reform, and the topic of allowable growth, the annual percentage increase in state funding to schools based on enrollment, continues to be a point of partisan contention.

With regard to commercial-property-tax reform, Segebart supports a gradual decrease for commercial owners of 20 percent.

Muhlbauer said plans for property-tax reform have been before the Legislature for years and that the fate of reform is in the hands of leadership.

"Until they come together, and really decide what they're going to do, nothing is going to happen," he said.

(The Associated Press contributed to this story.)