State lawmakers are weighing the merits of another tax cut in the face of brighter economic news. But with state revenues on the rise, the two political parties remain divided over what to do with the extra tax collections. State budget experts say at the rate revenues are rising, when lawmakers return in January they’ll likely have 150-million dollars more in the bank than projected. Democratic senator Bob Dvorsky of Coralville is content to let that money flow into the state’s cash reserve fund, which was drained last session.Dvorsky says it shows the economy’s picking up and more taxes are coming in, which will help the lawmakers when they tackle planning the next fiscal year. Dvorsky says he could also see restoring spending cuts the state has been forced to make several years in a row. He refers to articles placing Iowa number-one in tax cuts made this past legislative year, and says it may be time to go back in, review the cuts in state services the past few years and “make state government whole again.” But Republican representative Dwayne Alons of Hull says ending the fiscal year with more money than expected should strengthen his party’s hand in negotiating with the governor over a tax cut. He says that tax relief stimulates the economy, and we “may not see a negative revenue stream,” which would pose an argument for tax cuts for the governor to consider. Republicans want the governor to approve tax relief in return for restoring the state’s leading economic-development program, the Iowa Values Fund.Alons admits “We should focus on replenishing those funds also” but says at current tax rates he doesn’t think the state’s coffers will fill as quickly as they could, saying there could be “better economics to add to our revenue streams and fill up our economic reserves.” Democrat Governor Tom Vilsack has resisted a large tax cut, saying it will divert money from education and health care. He says his final offer to republicans is an 80-million-dollar, single-year tax break for small businesses. Representative Alons says he can’t speak for all republicans, but he would be willing to agree to that.
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