September 30, 2011

Lower Unemployment Taxes for Iowa Employers in 2012

State officials announced this week that employers will see approximately $96 million dollars in tax savings next year when unemployment tax rates are reduced from 2.8% to 2.4%.

In 2012, approximately 52% of Iowa businesses will experience a zero rate. Iowa is one of only six states in the country that provides a zero rate within the tax tables. Employers who have no unemployment claims will still pay no taxes on unemployment insurance and will not have any change. Additionally, the new employer non-construction rate will decrease from 1.9% in 2011 to 1.5% starting in January.

Iowa Workforce Development is responsible for collecting unemployment insurance taxes from employers and operating Iowa’s unemployment insurance payment programs for workers. The department identifies annually the appropriate table for the following year. Unemployment tax rates are based on wages and recent unemployment benefit payments. This decrease in unemployment taxes comes at a time when other states are increasing unemployment taxes and also reducing benefits to cover the cost of money borrowed from the federal government. Iowa is one of 13 states that have not borrowed money from the federal government to keep their unemployment trust funds solvent. By September 30, states will have to have developed a plan to pay back at least the interest on those, which in some cases is over a billion dollars that have been borrowed.

Since Iowa has no penalty on any payments owed the federal government, Iowa employers also reap the benefit of having a higher tax credit on their Federal Unemployment Tax Act or FUTA taxes. The net result of Iowa’s solvent unemployment system is Iowa employers also pay less in FUTA taxes compared to many other states. This will make Iowa businesses more competitive, and can possibly help in recruiting other businesses to come to Iowa.

Iowa Will Seek Waiver from “No Child Left Behind” Requirements

The Obama administration will now allow states to seek waivers from the No Child Left Behind requirements for schools. This will allow states, if they meet certain conditions, to bypass requirements such as reading proficiency and math by 2014.

Many critics of the federal No Child Left Behind law, including Iowa’s Director of Education Jason Glass, have said the law is fundamentally flawed since it ratchets up the required percentage every year and labels schools as failures. Others have criticized the program’s reliance on standardized tests. Glass has indicated that Iowa will seek a waiver, but the question is if they will do so right away or wait until it goes in effect in the 2012-2013 school year.

It is hoped that allowing states greater flexibility in improving student achievement will allow administrators to focus on local unique needs. In order to be eligible for the waiver, Iowa must demonstrate they are doing the following:

• Transition to accountability standards ensuring students are "college-and career-ready." Those standards should be designed to increase achievement among all students, including students with disabilities and English-language learners.
• For schools in the bottom 5% in achievement, they must implement serious interventions to improve their performance. In the 10% of schools with graduation rates, large achievement gaps, or poor performance, districts must develop strategies to aid those students.
• Set basic guidelines for teacher and principal evaluation and support systems. These evaluations should include some element of student progress and offer useful feedback to educators on how they could improve.

Safe and Supportive Schools Announced

Iowa was one of 11 states to be awarded nearly $3.5 million in federal money this year, and nearly $14 million over the next four years, for an effort to measure and improve learning conditions in schools. There were 20 Iowa high schools chosen to participate in the program.

Schools will study issues such as bullying, school safety, attendance, and how much students are engaged in the learning process. Earlier this year, 60 Iowa schools were randomly selected to participate in the first ever “Iowa Safe and Supportive Schools” survey of students, parents, and teachers. The grant money will be used to support the 20 selected schools from the survey that showed the greatest opportunity for improvement.

The Department of Education, in conjunction with Area Education Agencies, will work directly with the selected schools to design and implement activities that improve learning conditions. Studies have shown that improving conditions for learning can lead to better student attitudes and higher test scores.

The twenty schools participating in the program include Armstrong-Ringsted, Burlington, Columbus, Council Bluffs Lincoln, Davenport Central, Des Moines East, Dubuque Senior, East Greene, Iowa Valley, Keokuk, Louisa-Muscatine, Marcus-Meriden-Cleghorn, Oelwein, Olin Consolidated, Ottumwa, Sioux City West, Waterloo East and West, West Sioux, and Winfield-Mt. Union.

Export Grant Money Available

The U.S. Small Business Administration has chosen Iowa as one of the recipients of a State Trade and Export Promotion grant, which provides moneys to states for small business exporting assistance programs. The program is designed to increase the number of small businesses that are exporting goods and increase the value of those goods.

The Iowa Economic Development Authority will make the grants available through the following programs:

• Technical Trade Assistance Program (TTAP) - Iowa Economic Development Authority's International Trade Office will provide an assessment of a company's export needs, and provide consultation and linkage to a variety of export resources at the local, state and federal levels
• Domestic Trade Assistance Program (DTAP) - Provides up to $3,000 assistance per occurrence to participate at a domestic trade show with an international buyers program
• Expanded Export Trade Assistance Program (ETAP) - Provides up to $4,000 per occurrence, up to three times in the fiscal year, to help defray expenses when participating at a trade show or on a trade mission outside of the U.S.
• Product Trade Assistance Program (PTAP) - Provides up to $5,000 per occurrence to assist a company in adjusting product or product certification to expand export opportunities

Budget Experts to Meet in October

State budget experts are scheduled to meet on October 14th in Des Moines to revise budget estimates for the current fiscal year and make their first budget projection for the fiscal year 2013 budget.

The Revenue Estimating Conference (REC) is charged with meeting three times a year to review and determine estimates for state general fund and gambling revenues. Holly Lyons is the Legislative Service Agency representative; David Roderer is the Governor’s appointee; and David Underwood, an economist from Mason City, is the third member. The REC will likely revisit their general fund revenue estimates for fiscal year 2012 to reflect the latest changes by the 2011 legislative session and any other changes based on the strength of Iowa’s economy.

During the 2011 legislative session, the General Assembly changed how the state tobacco and cigarette tax revenues are accounted for in the general fund. A change in the law moved $106 million in cigarette and tobacco revenues out of the general fund. The $106 million cigarette and tobacco revenues will continue to flow into the Health Care Trust Fund to be used for health care purposes, but it will no longer be counted toward state general fund spending. This change in the law is throwing off the revenue collection numbers for FY 2012 as general fund cigarette and tobacco will likely fall from $230 million to $124 million.

The REC will not only update their revenue estimate for fiscal year 2012, the current fiscal year, but they will also for the first time provide a revenue estimate for fiscal year 2013. The Legislature only approved a partial year of funding for fiscal year 2013 and the 2012 Legislature and Governor will use the REC estimate from its December meeting to apply the budget limitation laws to the fiscal year 2013 budget.

Under Iowa’s spending limitation laws, the Legislature and Governor must use the December revenue estimate is setting the budget and it must only spend 99% of the estimated revenues.

Community College Tuition and Fees Increase by 6% on Average

Community college tuition and mandatory fees climbed 6% this year according to an annual report released by the Department of Education. The average tuition at Iowa’s 15 community colleges is $3,948 for the 2011-2012 academic year, and mandatory fees average $399. Iowa’s tuition exceeds the national average by $1,278 and is the fourth highest out of eight Midwest Region states, with Minnesota, South Dakota and Wisconsin being higher.

Since 2003, tuition has grown by 66% and fees by 28% at Iowa’s community colleges. There are currently five of Iowa’s community colleges that do not charge a college-wide fee.

Although tuition and fees at community colleges continue to rise, they are still more than a third lower than the state’s three Regents’ universities. By law, community college tuition cannot exceed the minimum tuition at the public universities. Community colleges also have an “open door” admission policy, which guarantees Iowans the opportunity for educational assistance and career development.

Mental Health and Disability Redesign Committee Sets Dates

The co-chairs of the Mental Health and Disability Redesign Legislative Interim Committee have set the dates for meeting during the interim. The interim committee was established in Senate File 525 which outlined the work to redesign Iowa’s fractured mental health and disability system. The interim committee plans to meet in Des Moines on October 24, November 17, and December 15.

The committee is charged with addressing the property tax issues, devise a means of ensuring the state maintains its funding commitments for the redesigned services system, revise requirements for mental health professionals who are engaged in the involuntary commitment and examination processes, recommend revisions to the changes made in Chapter 230A so that the changes conform to the proposals made by the interim committee, and develop legislation for amending the Iowa Code references to mental retardation to use intellectual disabilities. In addition, the committee must consider issues posed by the July 1, 2013, repeal of county disability services administration and funding provisions enacted in Senate File 209. In addressing the repeal provisions, the committee must consider all funding options for funding adult disability services.

The Department of Human Services was directed to create advisory workgroups to the Legislative Interim Committee

made up of stakeholders. The following workgroups are meeting in the Des Moines area:

• Adult Mental Health System Redesign Workgroup
• Best Practices and Programs for Persons with Brain Injury Workgroup
• Adult Intellectual and Developmental Disability System Redesign Workgroup
• Children's Disability Services Workgroup
• Regionalization Workgroup
• Judicial Branch and DHS Workgroup

Overweight Loads of Crops Allowed on Roads

On September 15, the Governor signed a proclamation to lift the weight restriction on trucks hauling soybeans, corn, hay, straw, and stover. The Governor cited a need for this exemption with the increased truck traffic and harvesting due to concerns of weather.

While this applies to Iowa’s highways, it does not apply to Iowa’s interstate system or any bridges with posted weight limits, and the trucks cannot exceed a maximum gross weight of 90,000 pounds.

The weight exemption began on September 15 and lasts for 60 days. A copy of the proclamation can be found at https://governor.iowa.gov/wp-content/uploads/2011/09/Weight-Proc-21.pdf.

REAP Meetings to be Held Across the State

The Department of Natural Resources is holding 18 meetings around the state for Iowans to provide input on the state’s Resource Enhancement and Protection (REAP) program.

REAP invests in Iowa’s parks, soil, water and habitat improvements, roadside prairies, historical development, and conservation education. The program is funded through gaming revenues and sales of the natural resource license plate. This year, REAP is authorized to spend $12 million.

The DNR will take suggestions from attendees on specific projects in their region that could receive REAP funding. Delegates will also be elected to the REAP Congress. The REAP Congress meets every even numbered calendar year and shapes how REAP funds are spent. The next REAP Congress will meet in Des Moines on January 7, 2012, in the House of Representatives.

These regional meetings will begin with an open house on REAP’s positive impacts in each region at 5:30 pm and each assembly will begin at 6:30 pm. Six meetings have already been held in Cedar Falls on September 20th, Monona on September 21st, Coralville on September 22nd, Maquoketa on September 27th, Mason City on September 28th, and Marshalltown on September 28th. The remaining meetings are as follows:

Watershed Management Collaboration to Reduce Flood Risks

The Department of Natural Resources and the Iowa Economic Development Authority are working with cities and counties interested in reducing flood risks and improving water quality within their watersheds.

Cities and counties can form Watershed Management Authorities, which are agreements between political subdivisions, such as cities, counties, and soil and water conservation districts, that are intended to foster cooperation and improve conditions in the watershed. DNR has made available $30,000 for up to six applicants to form an authority. Only counties and cities within those counties declared federal disaster areas during the 2008 floods can apply for the grants.

Recipients have six months to invite all political subdivisions in the watershed to participate in the authority, establish a board of directors, and enter into an agreement to form the authority. The full request for proposal is available at http://bidopportunities.iowa.gov/. Proposals are due by 4:00 pm on Oct. 21.

Watershed Improvement Grants Awarded

This past month, the Watershed Improvement Review Board awarded eight projects a total of $1.5 million in grants that will improve water quality or reduce flooding in Iowa. These funds will be matched by approximately $3.4 million from the local communities, for a total of $4.9 million going to improve Iowa’s water.

Since the Legislature created this board and program in 2005, over $27 million has been provided in grants to local communities to improve Iowa’s water quality or reduce flooding.

The approved projects have already completed watershed assessments that identified critical water resource areas and will focus on implementing specific water quality or flood reduction improvements. The projects will address runoff and drainage, sedimentation, urban stormwater, groundwater protection, flooding, and a number of other issues that impact the state’s waterways.

The funds were available to local watershed improvement committees, soil and water conservation districts, public water supply utilities, county conservation boards, cities, and counties. For this round, individual projects could request up to $500,000 in funding.

The eight approved grants are as follows:

• Coe Creek Watershed, City of Elliott in Montgomery County; project length is two years; grant amount is $166,460
• Duck Creek Watershed, City of Davenport in Scott County; project length is six months; grant amount is $300,000
• Lake Hendricks Watershed, Howard County Soil and Water Conservation District; project length is one year; grant amount is $61,760
• Lake Icaria Watershed, Adams County Soil and Water Conservation District; project length is two years; grant amount is $244,650
• Price Creek Watershed, Iowa County Soil and Water Conservation District; project length is three years; grant amount is $102,695
• Rathbun Lake Watershed, Rathbun Land and Water Alliance in Appanoose, Clarke, Decatur, Lucas, Monroe, and Wayne counties; project length is five years; grant amount is $125,300
• Twelve-Mile Lake Watershed, Creston City Water Works for Union and Adair counties; project length is two years; grant amount is $169,925
• Walnut Creek Watershed, Montgomery and East Pottawattamie County Soil and Water Conservation Districts; project length is two years; grant amount is $335,600

Safe Social Networking for Kids & Families

Iowa Attorney General Tom Miller released a consumer advisory for parents and kids on how to use social network sites such as Facebook and Twitter while avoiding scams, strangers, spammers, and sexual predators.

Since social networking is now more common than phone calls for many people, parents should be educated on what to do and/or avoid to make social networking safe for their kids.

Some of the tips include:

• Use the privacy controls that limits the pictures and information that others can access
• Set rules regarding kids going online and make sure kids understand that they shouldn’t post things that they don’t want shared
• Report to the police if you are online and come across what you believe to be a scam or inappropriate material

For the complete consumer advisory, log on to:www.state.ia.us/government/ag/consumer_advisories/e_commerce_internet/safe_social_networking.html.

Corrections Department Requests More Staff for Next Fiscal Year

At their September 16 meeting, the Iowa Board of Corrections adopted the fiscal year 2013 budget request, which will be submitted to the Governor and the Legislature. Fiscal year 2013 runs from July 1, 2012, to June 30, 2013.

When the Board of Corrections was hearing presentations from each institution and community based correction (CBC), the Board repeatedly heard the need for more staffing. The budget request the Board adopted addresses both operational and capital (construction) needs.

Operational Requests

During the 2011 legislative session, the Legislature appropriated for fiscal year 2013 half of fiscal year 2012’s appropriation, so the number one budget request for fiscal year 2013 is the other half, so that the Department of Corrections doesn’t receive a decrease in funding. The number two budget request is an additional appropriation of $16.6 million to add 277 employees to all nine prisons and to all CBCs to fill critical security, treatment, and operational needs. There are other staffing needs at the prisons and CBCs, but those are further down on the priority list.

The total operational request for fiscal year 2013 is just under $387 million, which represents an increase of $40 million compared to the fiscal year 2012 appropriation.

Capital Requests

The Board of Corrections also approved a separate asking for infrastructure needs at prisons and CBCs totaling $54 million. Some of the needs are deferred maintenance and some are for specific projects at either a prison or institution. For example, $11 million is requested for the Ames residential CBC for a 100-bed expansion, a women’s center, and a daytime reporting center with traditional and intensive treatment services. A total of $8.5 million is requested for the Burlington residential CBC for a 25-bed expansion, a women’s center, and to address infrastructure needs. And, a total of $23 million is being requested for the Des Moines residential CBC for a 184-bed expansion, a one-stop reentry center, a daytime reporting center, and a mental health 23 hour crisis diversion.

DNR to Hold Forest Reserve Program Public Meetings

The Department of Natural Resources is holding six meetings across the state to discuss Iowa’s Forest Reserve Program and potential changes that could affect Iowa landowners. Iowa’s Forest Reserve law pro¬vides that forest land that meets certain criteria may be exempt from property taxes.

Two proposed bills from the 2011 Legislative session that impact the Forest Reserve Program include House File 680 that eliminates the tax exemption in 2021 and House File 681 that limits landowners to enrolling only 15 percent of their available acres in the program and includes provisions penalizing landowners who enroll in the program and lease-hunt their enrolled acres.

Each DNR meeting will have a 30 minute presentation followed by a chance for the public to speak about the Forest Reserve Program and the legislative proposals. Comments will be collected for the legislators as they discuss the future of the program. The meetings are planned for two hours.

Meetings are scheduled as follow:

• Oct. 4, 8 a.m., Pilot Grove Savings Bank, 506 North Main St., Donnellson
• Oct. 6, 9:30 a.m., Yellow River State Forest, 729 State Forest Road, Harper’s Ferry
• Oct. 11, 7 p.m., State Forest Nursery, 2404 South Duff Ave., Ames
• Oct. 13, 7 p.m., EB Lyons Interpretive Center (Mines of Spain State Park), 8991 Bellevue Hts., Dubuque
• Oct. 18, 7 p.m., Pin Oak Marsh, south of Chariton on Hwy. 14
• Oct. 20, 7 p.m., Loess Hills State Forest, 206 Polk St., Pisgah