CENTERVILLE — Taxes, state spending and reorganization were three issues talked about during Saturday's Legislative Coffee in Centerville with state Rep. Kurt Swaim and state Sen. Mark Chelgren.

Appanoose County Supervisor Jody McDanel said reorganization of mental health and the lack of spending for education and roads is going to cost the county jobs.

"If we lose 25 teachers that's fewer jobs. If we go to reorganization of mental health you're going to lose central points of contact, you're going to lose case management, you're going to lose facilities ... they're going to be somewhere besides here," McDanel said during the hour-long meeting attended by 25 at Chariton Valley Planning & Development Council office. "So that's more (lost) jobs."

McDanel said school funding has been held to 0 percent growth the last two years and in 2013 growth is proposed at 2 percent. That doesn't keep up with the cost of inflation, he said.

"I thought our governor said he wants to increase jobs in the state of Iowa," McDanel said.

If the state doesn't fund road improvements it means less work for the secondary roads department and fewer jobs, McDanel said. One way to fund road improvements is to pass the gas tax increase, he said.

Both chambers at the state capitol have passed gas tax increases out of subcommittee. The Senate bill increases gas taxes by 10 cents over two years and is expected to collect $220 million; the House bill increases gas taxes by 8 cents over two years and collects up to $176 million.

Rep. Kurt Swaim said supporting the gas tax increase isn't very popular and estimates are it will cost the average family $200 per year. Swaim said he wasn't "married to the gas tax increase" and a better solution to fund infrastructure needed to be found?

"I know that it's overwhelming unpopular," Swaim said about increasing the gas tax. "If somebody has a better idea for us to fix our roads, I'd be more than happy to look at it. But nobody comes up with a better idea. They just refuse to address the problem. And we're just continuing to stick our heads in the sand. It's ridiculous. We've got to do something to our infrastructure."

Centerville Mayor Jim Senior said a 4 cent gas increase comes to 40 cents more per $40 purchase.

"That's not going to break anybody," Senior said.

Swaim said the gas tax funding mechanism would discriminate against Appanoose County. Swaim said his support is contingent upon Appanoose County getting its fair share of the money.

"I've said as long as we get our share of funds, I would support a gas tax increase," Swaim said. "I'm certainly not going to vote for a gas tax if all the money goes to the big cities."

Swaim said the new TIME 21 infrastructure funding formula gives more money to the bigger cities. Smaller counties do better under the old formula, he said.

Sen. Mark Chelgren said he did not support the gas tax increase. Chelgren said in general he's against raising taxes.

"Why would we raise taxes on Iowans when ... our budget is doing so well that we can spend the money that we need to," Chelgren said, noting the federal government spent $866 billion in infrastructure, some of which was spent in Iowa.

The main problem in Appanoose County, Chelgren said, is not all vehicles are taxed, meaning a smaller percentage of vehicle owners are taxed, resulting in less money to cover costs.

"And then expect that to be enough to cover your schools and your roads and we just know it's not and mental health," Chelgren said,

Get rid of taxation exceptions for government entities, non-profits and farmers, Chelgren said. Every tractor is exempted from paying road taxes, Chelgren said.

"When you give all of these exemptions to people and their not contributing to the system but they're still using it, that's a lot of burden for you guys," Chelgren said.

Chelgren said he wants to see more local control. Chelgren said he's against mental health regionalization and instead wants to see more local control.

Swaim said mental health regionalization is a "serious surrender of local control" but it does supply economy of scale. Benefits can be achieved without regionalization, he said.

Mental health regionalization calls for the creation of up to 15 regions each with three or more counties serving a target population of between 200,000-700,000. The idea is fewer regions would deliver consistent and equal services as opposed to 99 different systems.

McDanel said shifting the property tax burden from commercial is not going to create any new jobs in Appanoose County. He said he was confused as to why businesses not paying income tax would have their property taxes reduced.

"Can you see any logic in that?" McDanel asked.

On the property tax issue, Swaim said the state should focus on smaller businesses. Larger businesses don't pay income taxes.

"So it seems to me they don't need a real estate tax credit," Swaim said. "We don't have enough money to give them a tax credit."

Swaim said property tax reduction should be "pay as you go" with 80 percent for small businesses and 20 percent for larger businesses. The Senate bill is "pay as you go" and creates $200 million in direct tax credits.

"So they commit to $200 million a year. And that is something with our expanding economy is realistic," Swaim said. "But if you go and you say you're going to cut 40 percent for all commercial property taxes, you're talking about a huge amount of money and we just don't have it."

A section of the Iowa Constitution, read by Chelgren, states property of all corporations for "profit shall be subject to taxation the same as that of individuals." Chelgren said the state started drifting away from the Constitution in the 1970s and needs to find its way back home.

"We need to get the refundable, transferable tax credit should be eliminated from Iowa code," Chelgren said. "I don't care who it goes to."

No special consideration for companies and everyone of them would pay taxes, he said.

"And I'm pro business," Chelgren said.

Nichole Moore, executive director at Chariton Valley, said the Centerville Community School District is looking at cutting up to 25 teachers.

"That's a big cut in our area," Moore said. "We need help, obviously."

Swaim said he supports 4 percent allowable growth for education. If Iowa fails to fund education, more jobs will be lost.

"We are going to have to cut teachers and that's going to have a negative effect on our economy," Swam said. "And on our kids."

Chelgren said Iowa is the best in the nation educating children up to the fifth grade. The areas the state needs to fix are the transition points of junior high school and high school.