Category: Local
News from the Hill…
The Revenue Estimating Conference (REC) met this week and established new projections for fiscal years 2016, 2017 and 2018. The Legislative Service Agency (LSA) lowered their projection of revenue, the Governor’s Appointee raised his number, and the third member selected a number in between. So they all three agreed that they would keep the 2016 number the same as their December projection of 7.0456 billion dollars. While I believed they would lower the 2016 revenue, they believed that the revenues would pick up enough in the last four months to bring the overall growth up to current projection. Only time will tell. Fiscal year 2017 however is a different story. There was a wider spread between the LSA and Governors Appointee of 72.2 million dollars. The three collaboratively decided that the revenues were first lowered 46.4 million due to a down turn in the economy. However there were some changes in December to the Federal Tax Code which will increase Iowa’s income tax revenue 76.4 million dollars. So the net effect would be an increase to the State’s revenue picture of 30 million dollars. In addition when the Governor signs the coupling and supplies bill into law there will be another increase of 23.6 million dollars to fiscal year 2017 revenues. To make it even more interesting for numbers geeks like myself is that for the first time in six years the ongoing revenue, the amount the tax payers are sending the state is higher than the legal amount the state can spend. By State Law we are bound to the December estimate unless the March estimate is lower. When you compare the December estimate of 7.3274 billion dollars and then make the revenue adjustment of 76.4 million dollars due to the federal tax changes made in December the actual December estimate is 7.4038 billion dollars. The March estimate already accounts for the Federal Tax Changes with their new estimate of 7.3574 billion dollars, which is lower than the December estimate. So the new spending limitation for 2017 will be 7.3510 billion dollars which is 176.7 million dollars higher than what the state spent last year. While you can find good news and bad news within the REC projections the size of the pie is now known and appropriations can now be completed.
School Funding…
With the March REC meeting behind us, the legislature should now be able to come to an agreement with school funding which will permit the rest of the budgets to complete their process also. The amount of additional dollars for school funding at a 2 percent growth is 80.9 million dollars. Once again school funding will take precedence and receive a large percentage of the additional dollars the state can spend. I was under the understanding that the agreement on supplemental state aid was going to be reached this week. However, unless something changes today, it now appears next week is more likely. I know schools are anxiously waiting for the growth in dollars to be set to they can finalize their own school budgets. Time is of the essence and there needs to be an agreement sooner rather than later.
Ways and Means…
A developing and new technology is new uses from byproducts of bio fuels. The Iowa Economic Development Authority (IEDA) has stated the program works in a way that the industrial facilities around the state that are already producing products from renewable products also produce other co-products that can then be processed into higher value basic chemical compounds. These compounds could then be processed into other consumer products. The Renewable Chemical Production Tax Credit (RCPTC) is an attempt to incentivize the production of these high value chemicals which would in turn: create new opportunities for Research & Development, create a stronger market for these co-products generated by the State’s existing renewable fuels industry, support Iowa’s farmers, reduce carbon emissions and help maintain Iowa’s leadership position in renewables. This bill passed the Ways and Means Committee this week and heads to the House floor for debate. I believe this is a new and exciting technology that could benefit Iowans a great deal. However, the program uses some tax language that I am not so favorable about. I believe that the parameters and limitations with the sunset of the program in fourteen years will offset this. In addition this program will be under the cap that the IEDA is under so there is no additional fiscal impact to the state. If this industry grows it could actually raise Iowa revenue in the future.
“May the road rise to meet you. May the wind be always at your back. May the sun shine warm upon your face. And rains fall soft upon your fields. And until we meet again, May God hold you in the hollow of His hand.” – Irish Blessing
For more information on these and other bills: www.legis.iowa.gov
Until next time,
Tom Sands
This weekend’s Legislative Forum:
Saturday, March 19th
9:15-11:00 am West Burlington City Hall, West Burlington
Author William Voegeli, Senior Editor of the Claremont Review of Books, poses two questions that every American should think about this election year: 1) How much government is enough government? and 2) Should America’s government be as big (or bigger) than that of France, Germany, or Sweden? Mr. Voegeli shows just how big our government has gotten in the past 70 years, and why the cost and size of Washington, D.C. has us on a crash course for European-style unemployment. The amazing thing? Progressives still say — and will always say — the government doesn’t spend enough.
Click here: “The meticulously orchestrated #Chicago assault on our free election process is as un-American as it gets,” tweeted actor James Woods. “It is a dangerous precedent.”
Activists associated with MoveOn, Black Lives Matter, and Occupy Wall Street, all of which are embraced by Democrats and funded by radical leftist George Soros, participated in shutting down the Trump campaign event. Soros is also funding a $15-million effort against Trump in Colorado, Florida, and Nevada through a new super PAC.
News from the Hill…
This week the Iowa House passed House File 2329, which prohibits a person from knowingly acquiring, providing, receiving, transferring, or using a fetal body part in Iowa. This bill also sets up parameters where the prohibition does not apply and makes a person who violates this law guilty of a class “c” felony. This bill passed with 56 voting aye, 43 voting nay and 1 absent or not voting. I voted for this bill.
Revenue Estimating Conference…
On March 16, 10:00 AM the Revenue Estimating Conference (REC) will meet to make their projections for the General Fund and gaming revenues for fiscal years 2016, 2017 and 2018. This will be the first projection for fiscal year 2018, while the other two fiscal years will be adjustments to prior projections. There will be many interested in what changes they may make to fiscal years 2016 and 2017. Revenue has been running behind what the REC projected, and I would expect them to lower their estimate. It could be anybody’s guess on what changes may be made, if any to fiscal year 2017. There are both negative signs as well as some positive changes in the Federal Tax Code which will have a positive effect on Iowa Revenues. Stay tuned, because if the revenue projection for March is lower than the December projection, the legislature will have to base its budget on the March estimate. I plan on attending this meeting.
Log Jam Breaks Loose…
The Senate Majority and the House Majority have come to an agreement on some key items that have been the log jam to the progression of the rest of the budget. The agreed to package includes coupling with the Internal Revenue Code and replacing a rule change that will go into effect July 1, 2016, with code language to better define replacement parts and supplies. This is a great deal that may not look like much at first, but is a win to the taxpayers of Iowa. The coupling agreement is Iowa House File 2092. This part of the bill will allow Iowa small businesses to claim the section 179 coupling that they have been expecting would be available. This will keep 95.6 million dollars of their money in their pockets for reinvesting as they see fit, not as the government does. The second part dealing with replacement parts and supplies is one of the most litigated sections in the Iowa code. This language will benefit both the manufactures that this applies to and the Iowa Department of Revenue who administers the Iowa tax code. This bill will also increase the revenue amount for fiscal year 2017, which is the budget year we are preparing. The overall deal includes education funding, but those details are still being worked out. In addition, that part of the deal will not come through the Ways and Means Committee, so that language in not in this bill. This bill was HSB 642, now it is on the House Floor waiting for debate. The new number is HF 2433. I requested this bill to be drafted and will do all I can to make sure it gets signed into law.
Tax Increment Financing…
This week in the Ways and Means Committee we passed HSB 639. This bill setup some tighter parameters in which tax increment financing (TIF) can be used. The bill sets up a more collaborative report for total TIF debt and/liabilities. The bill also states that going forward TIF money cannot be used to build public buildings. Better defines a blighted area and provides for the termination of existing TIFs that do not have a statutory end date. One of the several complaints about abuses of TIF revenues are those who benefit is not necessarily the ones who pay. Under present law many of the local communities use TIF districts responsibly and beneficially to grow their communities. My concern has been that if the abuse of the present program is permitted to grow, then someday a future legislature would most likely end the program. While some will disagree, this bill goes a long way in protecting the integrity of the positive impact TIF districts can have in their local communities. By doing this there may be a short time sacrifice, but eventually all will benefit. When used correctly and appropriately, TIFs can be a useful economic tool. House Study Bill 639 puts some common sense limitations and necessary transparency into the use of TIF districts. The new number for this bill as it waits for consideration on the House Floor is HF 2435. I requested this bill to be drafted and have continued to find ways to stop what abuses that exist in the system today.
“If we ever forget that we are One Nation Under God, then we will be a nation gone under.” – Ronald Reagan
For more information on these and other bills: www.legis.iowa.gov
Until next time,
Tom Sands
1. Colleges are robbing students.
2. To get a job in America you need to spend money you don’t have.
3. That $200,000 degree may not be worth the paper it’s printed on.
4. We’re kept financially illiterate by a broken education system.
5. The government puts up roadblocks to starting our own businesses.
6. Not only does government stop us from working, it takes what little cash we may have.
