State Revenue Forecast Improves

Citing a growing state economy, a non-partisan budget panel this week raised state revenue estimates by $86 million, with $48.6 million falling in fiscal year 2011 and $38 million in fiscal year 2012.

Two members of the Revenue Estimating Conference (REC) were very bullish on the strength of Iowa’s economy, citing employment growth estimates at 1.4% for the current year and 1.7% for the next year. Iowa’s strong farm economy and agricultural manufacturing has help Iowa’s economy speed its way to recovery.

Iowa has sustained several months of growth and more workers are earning over-time income, which is also a sign of an improving economy. One member of the non-partisan budget panel was much more cautious in his remarks on the economy. Raising concerns with oil hitting $100 a barrel, unemployment rates still above historic levels, building permits low, and slow recovery.

The REC estimates that the State will collect $5.855 billion in net general fund receipts and transfers for fiscal year 2011, which represents a $222 million increase from FY 2010. The fiscal year 2012 net revenue is estimated to be $6.189 billion, an increase of $333.3 million over the new fiscal year 2011 revenue estimate.

Even with these new estimates, by law the Legislature will use the revenue estimates from the December meeting.

Iowa Schools Still in the Lurch

With the deadline for schools to set their budget for the next school year just two weeks away, Iowa school districts are still in the lurch because the state has not decided how much aid to provide next year.

The Senate has approved a modest 2% growth rate for next year while the House majority party wants to provide zero growth for schools next year.

School districts are also under pressure because the Legislature also has not reached a resolution on preschool funding as well. The difference between the House and Senate on preschool exceeds $40 million considering all sources of funding for preschool services.

April 1st marks the 33rd day that the Legislature is in violation of current law for not enacting a school funding provision referred to as allowable growth. The final day for schools to certify their budgets is April 15th. Unfortunately, this is where inaction has its consequences, because schools will most likely assume no increase in funding per pupil and certify a lower budget.

House Stops State from Paying Bills On-Time

The House majority party has declined to approve a Senate bill that would allow the state to pay hundreds of Iowans who have already provided services to the state of Iowa.

The Senate has already passed Senate File 512 to fulfill the state’s obligation for the Indigent Defense Fund, which is used to pay court appointed attorneys. The Governor has already asked the House to pass the bill so that thousands of Iowans can be paid for performing a required duty.

If the House doesn’t pass the bill soon, Iowa taxpayers will also be on the hook for $26,000 in interest payments because the state didn’t pay its bills on time.

The Iowa Constitution allows for a court appointed attorney if someone is declared indigent by the court (not able to afford an attorney). Across the state, hundreds of thousands of attorneys defend these people because everyone deserves the right to a fair trial, and these attorneys work extremely hard on behalf of their clients.

House Passes Economic Development Reorganization

On a vote of 66-33, the House passed a bill that turns the Department of Economic Development into a public-private partnership. The new economic development entity will consist of a board to set the state’s economic vision, an authority that would carry out most current DED functions, and a tax exempt 501c3 corporation to raise private money for economic development efforts.

The new Public Private Partnership will consist of:

• The vision board, The Partnership for Economic Progress, is a seven member board chaired by the Governor. It’s tasked with setting the vision for economic development in Iowa but has no control over the authority or the corporation.
• The Economic Development Authority is the successor entity to the Department of Economic Development. All current DED programs will be housed within the new authority; the authority’s nine member board will appoint a director to oversee operations. The authority will contract with the corporation for activities such as market research, marketing, and policy research.
• The Economic Development Corporation is a tax exempt 501c3. The corporation will raise private donations for economic development and contract with the authority for certain development activities. The corporation is designed to have access to private business expertise not available to a department of the state.

Critics contend that an authority is less transparent than a state department. Legislators worked to ensure that there was transparency and accountability at the new entity but many felt that there was not enough time to address the issues. Other legislators expressed concern over the role of the corporation; once it’s created the state has little control over how it operates. HF 590 now moves to the Senate Economic Development committee for consideration.

Mourning Dove Hunting Season Allowed

Under an unusual procedural motion, the Iowa House gave final approval of a bill allowing Iowa’s Natural Resources Commission to establish a mourning dove hunting season in Iowa for the first time in 90 years. The bill passed the Senate last Tuesday, the House on Wednesday, and was signed into law on Thursday. The Natural Resources Commission is expected to start rulemaking establishing the season, which could start as early as this September. Mourning doves are classified by the U.S. Fish and Wildlife Service as migratory birds and are a close relative to the common barn pigeon. Forty states have a mourning dove season, including all the state’s surrounding Iowa. Hunting season frameworks are currently established annually by the U.S. Fish and Wildlife Service. States can be more restrictive with seasons and limits, but cannot be more liberal.

Supporters argue Iowa is losing economic benefits to surrounding states, including buying shells, staying in motels, eating at local restaurants, and permit fees. Doves are good to eat. Although they are small, so are shrimp and crappies. Hunting doves will be beneficial for older hunters and disabled hunters because you hunt from a blind and the birds come to you. Also, hunters are already prohibited from hunting within 200 yards of an occupied building so this will not mean hunting near homes.

Opponents argue there is no reason we have to shoot everything. Not having a dove season does not hinder hunter opportunities; there are plenty of game bird hunting opportunities Iowans already have. There is no need to expand this to doves. These birds are peaceful and are more of a backyard bird than a game bird. Consideration needs to be taken for people who like to see, hear, and watch these birds. There is not enough meat on these birds to justify shooting them and eating them; it will end up being target practice. There is also an issue with the lead shot used to shoot the birds.

Mental Health Redesign Proposal Released

Over the past month a subcommittee of the House Human Resources Committee has met and heard from various providers and consumers on redesigning mental health. House File 626, a concept bill with a $1 million appropriation, has already passed the Human Resources Committee.

The subcommittee continues to meet and last week the majority party released an amendment that lays out their plan to redesign the mental health services system. The goals of the plan are:

• Iowa should have access to the same level of services, no matter where they live in Iowa.
• Iowans needing to use the mental health/intellectual disability system should have someone in their local area they can go to for assistance with enrollment and other issues.
• Iowa property tax payers should no longer be required to be a source of funding for the system.

System Redesign

Under the proposal, the Department of Human Services (DHS) will divide Iowa into six regions and each region will have a lead agency. The lead agency will be a Community Mental Health Center (CMHC) that can provide core mental health services to residents of the identified region. In addition, the CMHC will work with other providers to meet the established core service requirements.

The proposal outlines the target population of the redesign and must provide a list of core services in each identified region to the targeted population. It also establishes a Disability Services System Redesign Savings Fund to capture savings created during the redesign process.

In addition to the system redesign, the proposal creates a Level 2 Psychiatric Medical Institution for Children (PMIC). This new level of care is to meet the increased intensive needs of certain children with mental illnesses.

The service system redesign proposal would go into place starting July 1, 2012. The House Appropriations Committee now will consider the proposal as an amendment to House File 626.

Rural Iowa Benefits From Bill

This week, the House passed House File 596 that will benefit smaller communities in Iowa that ban together to create a limited liability corporation and invest in their communities. The goal with the bill is to allow these smaller communities an opportunity to invest and open, or perhaps, reopen a needed business in the community.

Under the bill, limited liability corporations (LLCs) that are created within a local community would be able to invest their money into a local business. The bill also exempts these particular LLCs from the filing obligations under the securities requirements.

Local community is defined as a city with a population of 2,000 or less and an unincorporated area 10 miles from the city. The bill requires that majority of the members of the LLC reside in the local community.

Even though they are exempt from the securities requirements, they would still be accountable under Iowa’s antifraud act.

State to Hire More Correctional Officers

Under a bill approved by the House Appropriations Committee, the state will hire 40 additional correctional officers and 45 state troopers next year.

Senate File 510 appropriates a total of $500 million to agencies such as the Department of Public Safety, the Attorney General’s Office, and the Department of Corrections.

This is not a bill where the Democrats and Republicans are far apart on priorities, so finding compromise should be easy. For example, the bill funds 40 additional correctional officers and 45 state troopers that are currently funded with federal funds. Both parties agree that these state employees fill a vital role in protecting the public. Amendments offered by Democrats to fund drug courts in the 1st (Dubuque and Delaware counties) and 8th (Ottumwa) Community Based Corrections Districts were not accepted. The Legislature continually hears the high successes and low recidivism rates from drug courts, so legislators believe investing in drug courts saves the state money in the long run.

The Attorney General’s office must prosecute the worst of the worst felons, as well as prosecute those take advantage of Iowans through consumer fraud. That’s why Democrats offered an amendment to restore their funding to last year’s level, rather than cut them by $650,000. If funding is not restored to the Attorney General’s Office, it would reduce the number of attorneys that are needed to assist county attorneys prosecute the most serious crimes, fight all criminal appeals to uphold the work of law enforcement, and defend the state against tort lawsuits such as medical malpractice claims at the University of Iowa.

The Justice Systems Budget Bill appropriates money for fiscal year 2012, which begins July 1, 2011, and runs through June 30, 2012. It now goes the House Floor for debate.