Last week, the Iowa House voted to approve a Republican proposal to phase out Iowa’s income tax on Social Security and pension income. The House members also approved a Democratic proposal for income tax relief for low and middle income seniors. Under the Democrat proposal, older Iowans with less than $36,000 a year in income would pay no taxes. Couples with income less than $48,000 would pay no taxes. I voted yes on both proposals.

Taxing Social Security and pension income has long been a campaign issue. Many Iowans are not aware that the vast majority of senior Iowans (71%) pay no taxes on their social security income right now. The 29% of Iowans that do pay state income taxes on Social Security should not count on the income tax savings that was passed by the Iowa House, because it is doubtful that the Senate will take up the measure. Therefore, neither of the proposals to phase out and reduce the taxes are likely to be enacted.


In another important matter last week at the State Capitol, Democrats offered their plan to make Iowa energy independent. It includes investments in the state universities to make Iowa a world leader in renewable energy research and development, expanded use of 85% ethanol. The plan makes alternative energy a key focus of the Iowa Values Fund, and it includes incentives for building bio-refineries in Iowa.
While not mandating the sale of ethanol in the state, the Democrats set five-year goals for increased ethanol consumption.

One of the keys to improving ethanol's share of total fuel sales will be the sale of 85% ethanol (E-85). Nearly all the blended gasoline contains 10% ethanol, but many new vehicles can run efficiently on an 85% blend. Unfortunately, there are few places in the state to purchase 85% ethanol, due in part to restrictions that oil companies have placed on local stations. Oil companies are afraid of the potential that ethanol holds for reducing petroleum use, so some large companies actually force local stations to sign agreements that prohibit them from selling 85% ethanol. The Democratic plan will void those agreements and allow station owners the freedom to carry E-85.

Democrats want to take advantage of the expertise at our state universities and partner that with private business in order to produce groundbreaking advances in alternative energy research and development. Among the proposals is the creation of an Iowa Center for Advanced Renewable Energy Technology at Iowa State University. This center’s goal would be to improve the performance and feasibility of biomass energy products. In addition, $45 million would be added to the Iowa Values Fund in the coming years, specifically to encourage private commercialization of energy technologies, including creation of a bio-refinery in the state to produce fuel from Iowa biomass.

If we are serious about gaining energy independence, acting now will put Iowa in the lead with an industry that offers potential for tremendous economic growth, job creation, and environmental protection. These are proposals that can be embraced by both parties and enacted this year. The public understands better than ever the danger that oil dependence presents and would be rightfully upset if we fail to act on this important issue.

If you cannot come to the Capitol, I do appreciate hearing from you. You can write me at the State Capitol, Des Moines, IA 50319; call me at 515/281-7328 or e-mail me at ro.foege@legis.state.ia.us.

Ro

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