Protect the Taxpayer Relief Fund

The Taxpayer Relief Fund was originally created to provide income tax relief for Iowans. The fund currently holds a balance of $3.7 billion, representing an over-collection of income and sales taxes paid by taxpayers.

During the last legislative session, the legislature approved a tax reform plan that accelerates the implementation of a lower flat tax rate of 3.8 percent. Along with this acceleration, the legislature also approved the use of funds from the Taxpayer Relief Fund to support the General Fund budget if needed. This is an appropriate use of the Taxpayer Relief Fund.

Legislators need to safeguard the Taxpayer Relief Fund from attempts to divert the money for purposes other than income tax cuts, including buying down property taxes.

It is crucial for the legislature to honor the original intent of the Taxpayer Relief Fund and ensure these funds are used for income tax relief and returned to taxpayers. If the Taxpayer Relief Fund is to continue, it would be essential for the legislature to constitutionally protect its balance  from being used for additional government spending or temporary tax “relief.”