Recap of Week 15

Tuesday was the 100^th day of the Legislative Session. Today is the last day the clerks and pages will be with us in the House. We’ve been working hard to wrap everything up and hope to adjourn sometime next week.

Tentative Deal on Total State Spending Reached

Late last week a tentative agreement was reached with the House Republicans and the Governor on total spending for Fiscal Year 2013.  The budget framework allows for joint budget targets to be agreed upon and the final budget to be approved by the Legislature before session adjourns for the year.

The general fund budget will appropriate $6.242 billion for FY 2013.  This is below the December Revenue Estimating Conference (REC) estimate of $6.252 billion in ongoing revenue.  While this number is higher than House Republicans would have preferred, it follows the three budgeting principles of House Republicans:

•  Appropriates less in ongoing expenditures than ongoing general fund revenue
•  Does not use one-time funds for ongoing expenditures
•  Does not intentionally underfund entitlements to allow for additional expenditures

Using the current REC estimates, the FY 2012 budget appropriates only 93 percent of available general fund revenue.  The agreement with the Senate and Governor appropriates only 95 percent of available revenue.  This presents a major victory for the taxpayers because past practice would have been to spend at least 99 percent of available revenue.

Another victory for the taxpayers is the creation of the Taxpayers Trust Fund (TTF).  Under current estimates, the TTF will have $60 million at the end of FY 2012 and another $30 million at the end of FY 2013.  While there is no agreement on how to return the funds to the taxpayers, the fact that it cannot be spent is noteworthy.

In addition, when comparing the total gross ongoing expenditures for FY 2010 and FY 2011 to FY 2012 and FY 2013, the final budgets approved by House Republicans appropriate $180 million less than the last two budgets approved by Legislative Democrats and signed by Governor Culver.  This number does not include over $200 million in salary increases that the departments were forced to absorb.

House Republicans will continue to move a budget forward that sticks to their principles as the end of the 2012 Legislative Session comes to a close.

Senate File 2322 provides for a nonrefundable individual income tax credit for an individual who was a volunteer fire fighter who has met the minimum training standards or certified volunteer emergency medical services personnel for the entire tax year or prorated if part year. The amount of the credit is equal to $50.  The credit is to help compensate the individual for their volunteer service.

The bill passed the Senate 50-0 and the House 96-1.

The estimated credit claims for tax year 2013, the first year the credit is in effect, is a decrease of $910,000.  Fiscal year 2013 impacts are estimated to be zero, with all of the tax year impact falling in fiscal year 2014.  For the following fiscal years, credit claims are estimated to grow an average of 0.8 percent per year as wage growth raises average tax liability.  The bill now goes to the governor for his consideration.

Seeking Compromise on Education Reform

Education reform took one step closer to the Governor’s desk this week.  Through a quick transition, the House pushed the Senate version through subcommittee and committee on Monday, and followed that with a short debate on the floor.  The bill passed, as amended by the House, 54-45.

The new language put forth by the House and sent back to the Senate was a real effort at finding a compromise.

The resulting language the House passed makes some positive steps towards creating a stronger educational system in Iowa and includes:

-        A path forward for competency-based learning

-        Increased opportunities for online learning

-        Annual teacher and administrator evaluations

-        Value-added measures, which help measure student growth

-        A system of accountability for schools

-        Improved and relevant assessments

-        Development of an optional statewide professional development plan

-        An early literacy framework designed to get kids reading at grade level by the end of third grade, including retention to prevent sending children on without the tools for success

-        Great flexibility for school districts with home rule authority

-        Multiple task forces to continue the conversation on education reform.

The latest effort by the House is a good faith move to show the Senate we are willing to come together to the table to find a path towards compromise, while still maintaining elements the House feels are transformational for Iowa’s education system.

June 1 Deadline for Century and Heritage Farm Owners to Apply for Recognition

On Monday, April 16, 2012, Iowa Secretary of Agriculture Bill Northey reminded eligible farm owners that the deadline to apply for the 2012 Century and Heritage Farm Program is June 1, 2012.  The ceremony to recognize the 2012 Century and Heritage Farms will be held at the Iowa State Fair on Tuesday, August 14th.  The program recognizes families that have owned their farm for 100 years in the case of Century Farms and 150 years for Heritage Farms.   The Iowa Department of Agriculture and Land Stewardship (IDALS) and the Iowa Farm Bureau sponsor the award.

Applications are available on the Department’s website at www.IowaAgriculture.gov  Applications may also be requested from Becky Lorenz, via phone at 515-281-3645, email at Becky.Lorenz@IowaAgriculture.gov  or by writing to Century or Heritage Farms Program, Iowa Department of Agriculture and Land Stewardship, Henry A. Wallace Building, 502 E. 9th St., Des Moines, IA 50319.  Farm families seeking to be recognized this year must submit an application to the Department no later than June 1, 2012.

The Century Farm program began in 1976 as part of the Nation’s Bicentennial Celebration and over 17,000 farms from across the state have received this recognition.  The Heritage Farm program was started in 2006, on the 30th anniversary of the Century Farm program, and more than 500 farms have been recognized.  Last year 341 Century Farms and 56 Heritage Farms were recognized.

Public Information Board to Enforce Transparency Passes the House

The House took a huge step forward in government transparency with the passage of Senate File 430. The bill, passing with a vote of 92–7, creates the Iowa Public Information Act and the Iowa Public Information Board.

The board will have nine members appointed by the governor and confirmed by the Senate. The board can have no more than 3 members from the media and no more than 3 members that represent cities, counties, or other political subdivisions. The board will hire an executive director that is an attorney. Senate File 430 allows the board to:

• Adopt rules to enforce and implement Chapters 21/22.
• Issue declaratory orders with the force of law as well as informal advice to any person
• Receive complaints of violations of Chapters 21 and 22 and seek resolution of those complaints.
• Request and receive assistance and information from governmental bodies.
• Examine confidential records as necessary.
• Issue subpoenas enforceable in court for the purpose of investigating complaints and facilitating prosecution.
• Issue civil penalties provided for in Chapters 21 and 22.
• Represent itself in court to enforce or defend its orders.
• Provide training on Chapters 21 and 22.
• Prepare annual reports
• Make legislative recommendations.

Senate File 430 passed the Senate last session with a vote of 49–0. It will now go back to the Senate for further consideration.

If you have any questions, comments or concerns about these topics or any others please feel free to contact me by e-mail at lee.hein@legis.state.ia.us or by phone at (515) 281-7330.

Sincerely,

Lee Hein

Recap of Week 14

On Tuesday, the Iowa Cattlemen’s Association visited the Capitol. I always enjoy meeting with the Cattlemen as they are important to Iowa’s Agriculture community. Beef production is an important part of Iowa’s economy and the Cattlemen work hard to promote the quality of beef coming from the state.

This week I sat on the subcommittee for SF 2322, which would give a $50 tax credit to volunteer EMS and Fire Fighters. The bill passed out of the Ways and Means committee and will come to the floor for a vote sometime next week.

The House passed HF 2462 this week. The bill requires public schools to begin the school year no earlier than the 4^th Monday in August, starting with the 2013/2014 school year. I supported this bill and sponsored an amendment that would include Community Colleges and the state universities. Currently there are many Community Colleges and higher education schools that offer classes to high school-aged students for college credit while still in high school. Moving the starting date for public schools without including Community Colleges and universities would make the partnership difficult.

I was appointed to the Infrastructure Conference Committee to help negotiate the differences between the House and Senate versions of the Infrastructure Appropriations bill. Currently, the Senate version includes funding to help rebuild the Lake Delhi dam, but the House version does not. The Conference Committee will work to compromise on the $8 million difference between the House and Senate versions. My hope is that the final bill will contain funding for Lake Delhi.

Buying Out Mental Health Services Paid for by Medicaid

Two sessions of work on redesigning Iowa’s mental health system are nearing completion, as the House continues to perfect an amendment to Senate File 2315.  While much of the policy issues have been settled on a new system going into effect in FY 2014, the question of funding remains under discussion with the focus being on the issue of who will pay for those services funded by Medicaid.

Over the past several years, the Department of Human Services has discussed the idea of “buying out” those mental health services that are funded through Medicaid.  This would mean the state would assume the responsibility to pay for Medicaid services, instead of the county.

Under the current system, the state provides counties with a variety of payments including allowed growth in the system, replacing property tax dollars, and other service money.  A county combines these funds with the money it raises from its mental health property tax levy.  When a person needs mental health services, they would go to the county Central Point of Coordination office which then arranges for the services to be provided.

Most mental health services are not eligible for Medicaid funding, and thus the county simply pays the bill for the service.  But, the situation is different for intellectual disability services.  Many of these are eligible for Medicaid, and payment for these services is much more complicated.  Much of the non-federal share of the payment is state money that has been distributed to the counties and then sent back to the state.

DHS estimates that in FY 2013, the cost of these services will be about $231 million.  The expected cost of the non-Medicaid services is projected at $141 million.  What DHS has suggested as part of its mental health redesign plan that the state assume responsibility for the Medicaid costs beginning in FY 2013.  To pay for these, the state would retain the state funds that had been distributed to counties.  This is projected to require an additional $40-42 million in state funding beyond the current state mental health funding.  To cover the cost of the non-Medicaid services, counties would use their mental health levy revenue (approximately $125 million statewide) and what the state receives in the Social Services Block Grant for mental health ($12 million).

For many counties, this has the potential to be a good deal.  Because the Medicaid services are generally covering long-term intellectual disability services, these costs remain with a county for years and go up over time.  The growth in these Medicaid costs can be higher than any increase in state funding for a year.  This forces some counties to reduce what they offer for non-Medicaid services in order to meet their obligation for the Medicaid services.  Making the switch would allow them to preserve and possibly improve the mental health services they provide.

Other counties indicate that they would have trouble with this idea.  There are a number of counties who currently receive more state funding than what they spend on Medicaid services.  The excess funds are used to provide non-Medicaid services.  These counties are asserting that making the switch will leave them short of funds to pay for non-Medicaid services.  Another complicating factor is that a county may be the actual provider of the Medicaid services.  A county could have its own staff to provide case management services, which are payable by Medicaid.  The funds generated by this service are then used to pay for other services.

Both the House and Senate continue to work with DHS and other parties to get a better picture on the impact of this proposal.  The issue is likely to be determined as part of the Health and Human Services budget bill discussions.

Senate Passes Their Version of Education Reform

The Senate passed its own version of education reform on Monday on a party-line vote.  It shares some similar language with the House version, but differs considerably on many points. 

The areas where the bills agree are mainly around competency-based learning and the Iowa learning online initiative. 

What’s missing that the House language included are areas that will help:

-        provide increased local control through home rule

-        parental choice in education through improved charter school language and increased online learning opportunities,

-        a way to foster innovation through a competitive grant process meant to boost student achievement

-        value-added assessments that assess student performance based on how a student’s level of achievement has increased and not just based on where they are in relation to an arbitrary bar determined by their age and grade level

-        the ability to retain the best teachers by disallowing schools to make reduction decisions based on seniority rather than performance and the needs of the school

-        allowing the pool of available teachers to increase and bring in new talent by allowing for alternative pathways to licensure, so professionals in other fields can enter the teaching profession and bring their career experience with them into the classroom

-        protect religious schools from having to abide by state mandated curriculum requirements which may conflict with their religious tenets

-        the development of a meaningful evaluation system to be conducted annually which would help teachers improve

-        an accountability system for schools which would allow the local community to know how their local schools are doing and providing the pathway for schools that are doing outstanding jobs to be left with further autonomy

-        a literacy initiative which recognizes that beyond third grade students are no longer learning to read, but should be reading to learn and would prevent students from being passed on from grade to grade when they aren’t reading at an appropriate level for success.

The difference between the bills will mean a difficult process of conciliation that will result in either a meaningful step forward in education reform in the state, or simply a minor change for the good with a few agreed upon issues making the cut.

If you have any questions, comments or concerns about these topics or any others please feel free to contact me by e-mail at lee.hein@legis.state.ia.us or by phone at (515) 281-7330.

Sincerely,

Lee Hein

Update for Week 13

Debate over traffic cameras was interrupted on Tuesday when Representative Abdul-Samad opened a letter containing a white, powdery substance. The substance was determined to be non-hazardous after several hours of being on lockdown. The haz-mat crew came into the Chamber as part of the investigation, just two desks away from me. Although some were worried about the situation, most stayed calm and handled it well.

After the excitement ceased, debate on the legality of traffic cameras resumed. The final bill, which would outlaw traffic cameras, passed the House and was sent to the Senate for consideration. I did not support the bill for several reasons. I do believe they improve safety at many intersections, but there should be some restrictions.

I believe cameras should only be used at intersections where safety is an issue (high volume of accidents). Yellow lights need to be timed uniformly though out the state (for example, 10 seconds for a 25 mph area, 15 seconds for a 55 mph area to allow for enough reaction time to stop). Fines should be the same whether they are issued by an officer or the camera, and the tickets should be issued in a timely matter (2-3 weeks after the violation). Cities should own and monitor the equipment or at the very least the company who does should be required to be located in Iowa.                       

On Wednesday we debated the tax rebate bill for the future “All-Star Ballpark Heaven” at the current Field of Dreams site in Dyersville, which passed the House 53-43.  The Senate passed the bill Tuesday, so it should be on its way to the Governor to be signed.  I think this a good way for the state to potentially increase economic growth without committing funds from the state.  The investors need to complete the complex and have sales tax income before the state rebates the 5 cents back to the investors.  If the project is successful it will provide an economic boost for Dyersville and the surrounding communities throughout northeast Iowa.

Iowa’s Unemployment Rate Drops Again, Now at 5.3%

Iowa Workforce Development announced this week that Iowa’s unemployment rate had dropped to 5.3% in the month of February. The unemployment rate is continuing to decline in the state of Iowa and is accompanied by a gain in non-farm employment of 8,700 additional jobs.

Iowa continues to retain the 6^th lowest unemployment rate in the nation. The national average stayed the same as it was the previous month: 8.3% for the month of February. The five states with better unemployment rates than Iowa are: New Hampshire (5.2%,), Vermont (4.9%), South Dakota (4.3%), Nebraska (4.0%), and North Dakota (3.1%).

Non-farm employment saw a net gain of 8,700 jobs from January to February as the numbers rose from 1,484,800 to 1,493,500. The sectors reflecting the biggest gains were ‘education and health services’ (+3,600), ‘leisure and hospitality’ (+2,100), and ‘construction (+1,300), while ‘other services’ was the only sector that saw a drop in numbers for the month (-500).

As has been the case for the past year, Lyon County remains the statistically best situated county in Iowa with an unemployment rate at a 3.0%. After it lies Johnson county (3.9 % unemployment), while Carroll and Story are right behind (4.0% unemployment rate). The counties that are statistically hurting the most are Allamakee (9.3% unemployment rate), Hamilton (9.0% unemployment rate), Jasper (8.9% unemployment rate), followed by both Lee and Clayton (8.7% unemployment rate).

Iowa Veterans Home to Study PTSD

The House recently passed Senate File 2245, a bill requiring the Iowa Veterans Home to initiate and coordinate a posttraumatic stress (PTSD) dual diagnosis treatment program study.

The study will include finding information on:  funding sources, program structure, program requirements, the need for such a program in Iowa, focus on the establishment of a dual diagnosis program for individuals seeking treatment for service-connected posttraumatic stress, and substance abuse. The bill requires that the committee deliver the report to the general assembly and the governor by January 15, 2013.

If the study proves a program is necessary, Commandant David Worley hopes to open a center on site in Marshalltown for purposes of this legislation.  Currently, the veterans home does care for veterans with PTSD, however there is not a specific program based on the needs for this medical condition.

Drop-out Prevention Funding Allowable Uses

Recently, the House passed a bill in a bipartisan manner requested by many school districts across the state dealing with drop-out prevention funding, known as modified allowable growth (MAG).  The vehicle was Senate File 451, which in its original form caused much concern over the property tax implications in the bill.  The House amendment passed 92-6 and will head to the Senate for approval.

The problem started with a reinterpretation of statute by the Department of Education which clamped down on historic uses for funding for dropout prevention dollars.  This left many districts with applications that were being denied, and limited options for addressing their drop-out problems.

The amendment approved by the House specifies appropriate uses of MAG funding, giving school districts increased flexibility to meet the needs of at-risk students.  And in an effort to prevent an increased burden on local property tax payers, a cap was put into place based on historical percentages used by the school districts.

Currently school districts can request to levy up to 5% of their regular program costs beyond their regular program costs for MAG.  The amendment caps school districts at two different levels, depending on their past practices over the past four fiscal years.

1. If over the fiscal years FY10-13 the school district never levied above 2.5%, then the cap is 2.5%
2. If over the fiscal years FY10-13 the school district did levy above 2.5%, then their cap going forward is the highest levy percentage during that period.

The bill also sets applicability dates to take into account the four fiscal years.  Allowable uses of the funding goes in effect July 1, 2012, to be used next school year by districts, giving them immediate flexibility they have been asking for.  And the fiscal portion goes into effect July 1, 2013, recognizing that school districts have already set their rate for the fiscal year beginning July 1, 2012.

If you have any questions, comments or concerns about these topics or any others please feel free to contact me by e-mail at lee.hein@legis.state.ia.us or by phone at (515) 281-7330.

Sincerely,

Lee Hein