Legislature to Receive Governor’s Budget

Governor Branstad will present his budget address to a joint session of the General Assembly on Thursday, January 27th. The Governor’s preliminary discussions are to expect an austere budget for the next two years, and he is proposing no increase in funding for K-12 schools. (Note: At the time of this writing, the Governor has yet to make his presentation. As details on the Governor’s budget become available, it will be posted on the www.IowaHouse.org website.)

This session, the Legislature will be establishing the fiscal year 2012 budget, which starts on July 1, 2011. The Legislature will also likely consider some adjustments to the current fiscal year 2011 budget to maintain necessary services for the health and safety of Iowans. The current fiscal year 2011 budget has a projected surplus of $496 million. There are no concerns about a revenue shortfall as experienced due to the recession. Iowa’s economy continues to show improvement as more and more Iowans are finding work. This week it was announced Iowa’s jobless rate improved from 6.6% to 6.3%.

As the Legislature shifts it attention to the fiscal year 2012 budget, they will be starting with $6.35 billion in available revenues. This projected revenue estimate is over $1 billion more than the general fund budget approved for fiscal year 2011. There will be some adjustments needed in the 2012 budget, as federal funds received in fiscal year 2011 will no longer be available. These adjustments were anticipated; the federal funds provided the temporary relief needed to maintain health care and education services through the economic down turn.

Iowa is one of the state’s leading the nation out of the recession. A recent Pew Center on the States report recognized Iowa as the second best fiscally managed state in the nation. More than 30 states approved tax increases to weather the recession over the last two years. Iowa was able to manage its budget without raising taxes, by cutting over $800 million in spending, and utilizing the state’s reserve funds. Now that our state is on the mend, the state reserve funds are projected to be filled at the close of this fiscal year, with a total of $603 million, creating the safety net that is needed to weather the next economic down turn.

Republicans Offer Lowest School Funding Rate in History

For the first time in nearly 40 years, Governor Branstad this week proposed 0% growth for Iowa schools for the next two fiscal years. House Republicans followed with two bills that passed an education subcommittee this week that sets both the allowable growth rate and the categorical allowable growth rate at 0% for fiscal year 12. Since the school aid formula was created in 1973, there has never been a 0% allowable growth rate for schools.

The School Board Association of Iowa has said the impact of zero allowable growth will depend on whether enrollments are increasing or declining in a school district. Generally school districts need 2% to maintain operations at a status quo. With 0%, school districts will have three options: 1) lay teachers off or cut programs, 2) levy more property taxes, or 3) use their cash reserves (assuming they have funds built up). The Iowa State Education Association estimated that two-thirds of Iowa’s 359 school districts have declining enrollment.

Statewide Property Tax Would Increase

It is estimated by the nonpartisan Legislative Services Agency that at a 0% allowable growth rate, the estimated change in property taxes would increase by $70 million. By comparison, if the state provides more aid to schools, say at 4% allowable growth, then the estimated change in property taxes that would increase statewide drops to $50.5 million.

The money to fund the school budget comes from a mix of state aid and local property taxes, along with a small amount (less than 4%) from federal funding. The ratio of property tax and state aid supporting a district's budget varies by district. Property tax rich districts receive less state aid, and property tax poor districts receive more. Because of the school funding formula, when the allowable growth rate is set low, it often means a greater burden for local property taxpayers.

New Website Helps Iowa Small Business

A new website launched by the Iowa Department of Economic Development is helping small businesses with the resources they need to grow. The Iowa Small Business Assistance Gateway connects small businesses with the resources to start, manage, and grow their business.

The website, a result of legislation passed last year by Democrats, contains information on registrations, certifications, permits, plan reviews, and other requirements. In addition, the website will direct users to small business webinars, meetings, and articles related to small businesses in Iowa.

The Iowa Small Business Assistance Gateway is located at: http://www.iowa.gov/business.

Veterans Trust Fund Continues to Grow

Since July 2008, the Iowa Lottery has raised over $6 million for the Iowa Veterans Trust Fund. The Iowa Commission of Veterans Affairs recently released their annual report on the fund. As of the end of 2010, the fund has a balance of nearly $11.7 million. Each year, the Lottery can create two instant-scratch and two pull-tab games. All the profits go to the trust fund.

The trust fund was established in 2003, to provide services to Iowa veterans. Of the total balance of the fund, $35,400 of interest is available to spend on eligible claims. Trust fund expenditures are separated into three different categories: Veteran Service Officer grants, Honor Guard reimbursement, and assistance to veterans in need. Veterans must meet specific income and asset guidelines to qualify for trust fund assistance.

You can read the full annual report here. In addition, the following link will direct you to an application for the Iowa Veterans Trust Fund: https://va.iowa.gov/images/Trust_Fund_Application.pdf.

Voters to Show Photo ID’s at Polls

Voters would have to show photo identification when they vote at the polls and satellite polling places under a bill adopted by the House State Government Committee this week. However, a copy would not have to be included when voting absentee ballot by mail.

If the voter forgets their ID at the polls, they can vote a provisional ballot. However, they would also have to go to the county auditor’s office before noon on the Monday following the election and show their ID for their vote to count. House File 95 also allows for free non-operator ID cards and birth certificates for voting purposes only.

Supporters believe this puts in place safeguards to protect our voting process from potential voter fraud. Opponents argue there are no cases of voter fraud in Iowa; this bill only creates new barriers that block citizen voter participation. It’s a bill looking for a problem to solve.

The bill now goes to the full House for consideration.

Establish a Searchable Budget Database and Internet Site

The House State Government Committee adopted a bill this week to continue development of a single, searchable budget database and internet site to access the details on how the state is spending their tax dollars and the performance results achieved for those expenditures.

The searchable internet site contained in the bill must allow the public, at no cost, to search and compile the information. The searchable budget database must be online by January 1, 2013. House File 94 also requires the development of a searchable database of all the tax rates in the state for each taxing district by January 1, 2012.

The bill now goes to the full House for consideration.

Iowa’s Economy Needs Agriculture

Over 25% of Iowa’s economy is related agriculture. Iowa currently ranks 1st in the nation in corn, soybean, pork, egg, and bio-fuel production. We’re also 1st in the nation in conservation practices on private farmland. We rank in the top 10 in turkey, dairy, beef, and lamb production; and rank #2 in total agricultural sales, just behind the State of California. In addition, our total agricultural exports in 2007 were valued at more than $5.25 billion, ranking us 2nd in the nation.

The Deputy Secretary of Agriculture reminded House Agriculture Committee members this week about our agricultural industry and how it benefits our economy. She also mentioned that we are experiencing the biggest changes in global food markets in 30 years – rising prices and demand for crops are shifting the economic landscape for everyone, including consumers, farmers, and businesses.

Same Sex Marriage Ban Passes House Committee

The House Judiciary Committee approved House Joint Resolution 6 this week. The resolution would amend Iowa’s Constitution to define marriage between one man and one woman as the only legal union valid or recognized in Iowa. The amendment passed committee by a vote of 13-8. Over 200 people attended a subcommittee meeting on the bill earlier in the day.

A public hearing on the amendment is scheduled for next week. The hearing will be held January 31, 2011, from 6:30 pm to 8:45 pm in the House Chamber. Additional information on the public hearing can be found at www.legis.iowa.gov/DOCS/Schedules/PublicHearings.pdfwww.legis.iowa.gov/DOCS/Schedules/PublicHearings.pdf.

To amend the Iowa Constitution, the amendment would have to pass both houses of the general assembly either this year or next, and then pass both houses of the general assembly again in either 2013 or 2014. If the amendment passes twice in this way it is then placed on the next general election ballot, or November 2014 at the earliest. If a majority of voters vote in favor of the amendment, the Iowa Constitution is amended.

Bill Will Not Require the Purchase of Health Insurance

This week, the House Commerce Committee passed out House File 2, which says it would be illegal to require Iowans to purchase health insurance. Currently, there is not a requirement in Iowa law to purchase health insurance; the bill is in response to the federal Patient Protection and Affordable Care Act (ACA) adopted in March, 2010.

The ACA has already required health insurance companies to cover screenings for some cancers, extend the age that children can be covered under their parents insurance if they are in school, and help small businesses obtain health insurance for employees.

Beginning in 2014, persons will be required to purchase health insurance through a health care exchange if they do not enroll through their place of employment. Iowa’s exchange has not been set up yet, but is being developed to meet that 2014 deadline. This aspect of the ACA is currently being challenged in three different court cases, and will need to be addressed by the U.S. Supreme Court for a final answer.

Governor Branstad has signed on in support of a lawsuit challenging the constitutionality of the ACA, and Attorney General Tom Miller has joined other states and signed a “friends of the court” brief in support of the ACA.

Transportation is More Than Roads

Iowa’s Department of Transportation (DOT) oversees more than just Iowa’s roads. They also oversee Iowa’s airports, railroads, waterways, trails, and public transit systems. Oversight of all these modes means more than ensuring Iowa’s roads are being plowed and maintained, it also means implementing and enforcing some federal laws, registering motor vehicle and aviation dealers, and coordinating with local governments.

Iowa’s transportation includes the following:

• Over 114,000 miles of highway,
  
• Approximately 4,000 miles of rail lines,
  
• 111 public airports (8 provide commercial service),
  
• 35 public transit systems,
  
• Almost 1,500 miles of trails, and
  
• Almost 500 miles of navigable rivers.