Capitol Update for the Week of May 7th, 2015

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House Passes First Time Homebuyer Incentives

This week the House passed House File 631 by a vote of 91-7. The bill establishes a new chapter in Iowa Code entitled the Iowa First-Time Homebuyer Savings Account Act and is an effort to try to incentivize young people to save and plan for the single biggest purchase of their life—their first home.

This week the House passed House File 631 by a vote of 91-7. The bill establishes a new chapter in Iowa Code entitled the Iowa First-Time Homebuyer Savings Account Act and is an effort to try to incentivize young people to save and plan for the single biggest purchase of their life—their first home.

Specifically, the bill provides for the establishment of a first-time homebuyer savings account. The account holder must be a resident of Iowa. An account can be established individually or jointly with a spouse so long as both individuals are first-time homebuyers. The bill requires that the account be an interest-bearing account.

Specifically, the bill provides for the establishment of a first-time homebuyer savings account. The account holder must be a resident of Iowa. An account can be established individually or jointly with a spouse so long as both individuals are first-time homebuyers. The bill requires that the account be an interest-bearing account.

House File 631 also spells out the use and administration by the account holder. It states that the account holder shall use the money for eligible costs related to the purchase of a residence within ten years following establishment of the account and shall not contribute to the account for longer than ten years. There is no limitation on the amount of contributions that may be made to or retained in the account. The burden of proving that a withdrawal from an account was made for eligible costs is upon the account holder. The bill also provides that a person who knowingly prepares false statements associated with an account is guilty of a serious misdemeanor.

House File 631 also spells out the use and administration by the account holder. It states that the account holder shall use the money for eligible costs related to the purchase of a residence within ten years following establishment of the account and shall not contribute to the account for longer than ten years. There is no limitation on the amount of contributions that may be made to or retained in the account. The burden of proving that a withdrawal from an account was made for eligible costs is upon the account holder. The bill also provides that a person who knowingly prepares false statements associated with an account is guilty of a serious misdemeanor.

Additionally, the bill provides for an Iowa income tax deduction of up to $3,000/year per individual ($6,000 for married couples) for contributions to that individual’s first-time homebuyer savings account. Amounts exceeding that limit can be carried forward for deductions in subsequent tax years (but still keeping the annual deduction limitations). No deductions can be taken after the ten year life span of an account has expired. (Maximum deduction for an account is $30,000/$60,000). As another tax incentive, House File 631 also provides that the income from interest and earnings on a first-time homebuyer savings account is exempt from income tax.

Additionally, the bill provides for an Iowa income tax deduction of up to $3,000/year per individual ($6,000 for married couples) for contributions to that individual’s first-time homebuyer savings account. Amounts exceeding that limit can be carried forward for deductions in subsequent tax years (but still keeping the annual deduction limitations). No deductions can be taken after the ten year life span of an account has expired. (Maximum deduction for an account is $30,000/$60,000). As another tax incentive, House File 631 also provides that the income from interest and earnings on a first-time homebuyer savings account is exempt from income tax.

Finally, the bill spells out some penalties. For instance, if a withdrawal is made for a purpose other than an eligible cost, an account holder will have to add all of the tax deductions they previously took back into their taxable income. Additionally, if a withdrawal for a purpose other than an eligible cost is made on a day other than the last business day of the calendar year—such a withdrawal shall also be assessed a penalty of ten percent of the amount of the withdrawal.

Finally, the bill spells out some penalties. For instance, if a withdrawal is made for a purpose other than an eligible cost, an account holder will have to add all of the tax deductions they previously took back into their taxable income. Additionally, if a withdrawal for a purpose other than an eligible cost is made on a day other than the last business day of the calendar year—such a withdrawal shall also be assessed a penalty of ten percent of the amount of the withdrawal.

House Republicans continue to look for ways to encourage young people put down roots in Iowa. Buying a home is a huge purchase—one that takes careful planning and considerable saving. With the tax incentives in House File 631, House Republicans hope that more young people will make Iowa their permanent home. The bill now moves to the Senate for further consideration.

Report:  Iowa Economy Close to Contracting

The Iowa Department of Revenue released a report last week showing that some of Iowa’s most important indicators point to an economic dip that could indicate a coming contraction.  Agriculture is emanating particularly worrisome signs even as the report collected data through March of 2015, many weeks before the state’s bird flu epidemic hit.

The Iowa Leading Indicators Index (ILII) is a compilation of eight economic measurements.  Four of them–diesel fuel consumption, average weekly unemployment claims, the U.S. Treasury bond yield spread and the number of residential building permits–positively impacted the index.  But the agriculture future profits index, the new orders index, average weekly manufacturing hours and the Iowa stock market index all contributed negatively.

The agricultural profits index contributed most to the decline, as the 12-month moving average of corn, soybean, hog and cattle profits shrunk for all four commodities.  Prices for corn, hogs and soybeans are down from March of last year.  And while cattle prices are up, the breakeven point for them has increased.  The new orders index was the second-largest contributor to the index’s decline, as its 12-month moving average of orders received for manufacturing continues to slide from last year.

The department’s report summarizes previous changes in the ILII with six-month intervals, and the latest percentage decrease of 1.5 percent between September 2014 and March 2015 is the worst six-month performance over the past three years.  The last positive percentage change over a six-month interval came between May and November of 2012, but every interval between then has been negative.

The index is considered to have reliably signaled an economic contraction when it declines by at least a two percent annualized rate over a six-month period and a majority of the eight indicators decline over that same period.  This latest report comes very close to signaling a contraction.  With the last six-month index having a majority of indicators declining and the overall index declining by 1.5 percent, the index was only .5 percent short of signaling an economic contraction.

The full report from the Department of Revenue can be found here.

 
   Recap for the Week

With the official session ending on last Friday, May 1st.  We moved into the overtime part of the session.  That means the clerks have gone home.  We had a short week but accomplished much in the 2 two days we were in Des Moines.

We got all but two of the budget bills moved into conference committees.  The two left to do are Health and Human Services and the Standings budgets.  They are normally the last two to be completed and the Senate started them this year.

I look for them to be debated on the House floor early next week.  Once we complete the debate of these two budgets I look for them to be sent to conference committees also. Then the negotiations begin and rumors will be the talk of the Capitol.

The first rumor was that we could finish the session as early as next weekend.  I have my doubts on that but would like to be proved wrong also.  There is a lot to be done but things are started to roll towards adjournment.

As we move to completing the budgets we are still committed to these principles to produce a balanced and sustainable state budget:

  1. We will spend less than the state collects;
  2. We will not use one-time money to fund on-going needs;
  3. We will not balance the budget by intentionally under funding programs.

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 (319) 480-1997.

Sincerely,

Rep. Lee Hein

 

 

 

 

 

 

Capitol Update Week 16

House Moves Forward with Budget that Spends No More than State Takes In As National Data Shows Economy Slowing Down

House Republicans continued their progress on passing a budget that lives within ongoing state revenue at a time when national indicators point to an economic slowdown.

By the end of the week, the House will have debated the five budget bills it is responsible to start: Federal Block Grants, Transportation, Infrastructure (RIIF), Administration & Regulation, and Education. Additionally, the House Appropriations Committee is expected to have considered four of the budget bills started by the Senate: Agriculture & Natural Resources, Economic Development, Judicial Branch, & Justice Systems. This will leave two bills yet to begin the process – Health and Human Services and Standings. Both of these bills are to start in the Senate.

All of the budget bills moved by the House will be funded within the on-going revenue estimate for FY 2016 of $7.1755 billion. The need to keep on-going state spending within this amount was evident again on Wednesday when the U.S. Commerce Department released figures on the first quarter’s gross domestic product.

First quarter GDP for calendar year 2015 slowed to 0.2 percent growth. The Washington Post stated that the national economy “ground nearly to a halt.” The actual growth rate was well shy of the 1.0 percent growth predicted for the quarter and the 2.4 percent growth rate experienced in 2014.

The causes for the sudden slowdown are varied. Exports took a significant drop in the first quarter, with the export of goods and services going down 7.2 percent. Part of the blame for this is the stronger dollar, which has made goods for export more expensive in foreign markets. Another issue was the 2015 winter and its severe impact on certain areas of the country. While Iowa’s winter was bearable, the northeastern US was repeatedly hit with massive snowstorms which impacted consumer spending.

Construction and manufacturing related to homes were stagnant during the quarter and the number of new hires grew, that growth was almost half of what was experienced in the last quarter of 2014. The fact that Americans continue the trend of reducing their debt load and saving more also impacted GDP growth.

The sluggishness of the economy is sending cautionary signals to economists and policymakers across the country. Here in Iowa, the recent discovery of avian influenza in major turkey and chicken flocks has the potential to have a major impact on the ag economy. And state revenue growth for Fiscal Year 2015 still remains below the figure projected by the Revenue Estimating Conference.

House Republicans’ efforts to pass a budget that spends less than the state will take in shows a commitment to common-sense budgeting practice that Iowans across the state are putting to use in their own homes.

Avian Influenza Expands to Five More Sites in Iowa

On Monday, April 27, 2015, the Iowa Department of Agriculture and Land Stewardship (IDALS) issued a press release that authorities are responding to probable cases of highly pathogenic avian influenza (HPAI) in commercial poultry farms in Osceola, O’Brien and Sioux Counties in Northwest Iowa.  State officials have quarantined the premises and if the initial tests are confirmed, all birds on the property will be humanely euthanized to prevent the spread of the disease.  Also on Monday, Iowa Agriculture Secretary Northey appeared before the House Appropriations Committee to describe this outbreak and what additional state financial resources are being used by the state/IDALS in this investigation and eradication and clean-up effort.  Also discussed was what additional funds might be needed in this effort.  Monday’s press release describe generally the location and type of poultry farm involved and what the status is for the specific farm.

As of Thursday, there are 17 different farms showing positive for the H5 avian flu with more being found daily. The farms have been located in Northwest and North Central Iowa.

IDALS noted that Center for Disease Control (CDC) and Iowa Department of Public Health considers the risk to people from these HPAI H5 infections in wild birds, backyard flocks and commercial poultry, to be low.  No human infections with the virus have ever been detected there is no food safety risk for consumers.

The United States has the strongest Avian Influenza (AI) surveillance program in the world.  As part of the existing USDA avian influenza response plans, Federal and State partners as well as industry are responding quickly and decisively to these outbreaks by following these five basic steps: 1) Quarantine – restricting movement of poultry and poultry-moving equipment into and out of the control area; 2) Eradicate – humanely euthanizing the affected flock(s); 3) Monitor region – testing wild and domestic birds in a broad area around the quarantine area; 4)  Disinfect – kills the virus in the affected flock locations; and 5) Test – confirm that poultry farms in the area are free of the virus.

IDALS is cooperating in partnership with the Iowa Department of Public Health are working directly with poultry workers at the affected facility to ensure proper precautions are being taken.  People should avoid contact with sick/dead poultry or wildlife.  If contact occurs, wash your hands with soap and water and change clothing before having any contact with healthy domestic poultry and birds.  The IDALS press release advised that all bird owners, whether commercial producers or backyard flock owners, should continue to practice good biosecurity, prevent contact between their birds and wild birds, and report sick birds or unusual bird deaths to state/federal officials, either through their state veterinarian at 515-281-5321 or through USDA’s toll-free number at 1-866-536-7593.  Information will also be posted to the IDALS’ website at http://www.iowaagriculture.gov/avianinfluenza.asp.

Week Recap

I ran a subcommittee on Thursday for a bill dealing with tax credits for farmers. House Study Bill 251 assists crop farmers in reducing soil erosion and sediment loss, managing nutrients, and reducing contaminant loads contributing to surface water. The bill provides for a tax credit agreement between the farmer and the Department of Agriculture.

The agreement requires the crop farmer to establish and maintain an environmental practice on the farm land for a set period of time. The environmental practice is agreed upon by the Dept. of Ag and the farmer. The bill limits total tax credits to three million dollars per year. Guidelines are also laid for inspection of the land to ensure the farmer is continuing environmental efforts while receiving the tax credits.

While the bill still needs some technical corrections, the bill passed out of subcommittee unanimously with the intent to make those changes in committee. This is another tool in the toolbox to help the nutrient reduction strategy plan to meet its goals of cleaner water.

Friday this week marks the 110th day of session and is the last scheduled day. If you’ve seen the news, you know that we will still be here past Friday for the foreseeable future. After Friday, we will lose clerks and other support staff and we will no longer receive per diem for our time in Des Moines. Both Chambers have started to pass budget bills so things are starting to move. If there isn’t agreement on budget bills, it goes to conference committee to work out the differences. After all budgets are passed, the legislature can adjourn for the year.

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Tom and Jan Oakleaf, of Manchester, and I in the House Chamber

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Diane McElmeel, Katie Easterly, Nancy Fahey, Stephanie Bildstein from Anamosa and I in the House Chamber. The group visited the Statehouse to attend ID Action Day on the Hill.

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.iowa.gov or by phone at (515) 281-7330.

Sincerely,

Rep. Lee Hein

Capitol Update Week 15

House Republicans Release Budget Targets

House Republicans released their FY 2016 General Fund budget targets on Wednesday. And for the fifth year in a row, House Republicans have proposed a budget that spends less than the state will take in.

For Fiscal Year 2016, the state would spend $7,168,144,634 out of the General Fund. This amount to a 2.48 percent increase in state spending and spends 99.9 percent of the Revenue Estimating Conference’s latest estimate for ongoing revenue in FY 2016.

The General Fund would be spent as follows:

Administration & Regulation – $49,800,000 (decrease of $1,995,769)

Agriculture & Natural Resources – $42,000,000 (decrease of $1,111,995)

Economic Development – $41,400,000 (decrease of $1,181,886)

Education – $977,578,044 (decrease of $8,558,321)

Health & Human Services (decrease of $14,859,686)

Justice Systems (decrease of $3,380,575)

Standings (increase of $204,905,562)

As has been stated since the start of the session, K-12 education is getting the first bite of the apple, with funding for year two of the Education Reform legislation from 2013 and a 1.25 percent increase in supplemental state aid to schools. Also, the increase in funding for continued implementation of the commercial property tax reform legislation is included as well. The budget will also address mandatory increases in Medicaid due to further declines in federal funding participation.

House Republicans believe that it is important to lead by example when holding the line on spending. They are doing this by reducing the Legislature’s own budget by over $1 million below the FY 2015 level. Additionally, funding for organizational dues has been removed from all budgets. The Executive Council will be given a set amount of funds to pay for organizational dues that it has given approval to.   As the current round of early retirement benefits comes to a close on June 30, the funds spent in this program are being repurposed to other areas.

Bi-Partisan Vote Moves Broadband Measure to Senate

The Iowa House voted overwhelmingly to approve a bill designed to expand high-speed Internet access in areas of the state with slow internet speeds. The bill passed on Tuesday with broad bipartisan support, 90 to 5.

Internet service providers that choose to build high-speed internet infrastructure within areas that have slow service will receive a ten-year property tax exemption on their new investments. The bill, known as the “Connect Every Acre” initiative, also establishes a grant program that can provide financial assistance to providers building high-speed infrastructure. Both the property tax exemption and the grant program require the providers to build infrastructure that can facilitate 25 megabits of download speed and the three megabits of upload speed.

Governor Branstad and Lieutenant Governor Reynolds applauded the bill’s passage Tuesday in a statement, comparing the importance of extensive high-speed Internet connectivity with the states road and interstate system.

“It’s clear from today’s vote that the Iowa House of Representatives shares our view that high-speed broadband will connect agriculture and equipment through rural fiber, schools to online resources and businesses to the global marketplace,” said Reynolds. “We appreciate today’s vote of confidence from the Iowa House for this innovative proposal.”

The measure now goes to the Iowa Senate, where a similar bill has been pending since the legislative session began in January. Along with the property tax exemption and the grant program, the House bill contains the following:

-Identifies the State of Iowa CIO to coordinate statewide broadband availability and access between the public and private sector.

-Creates the Iowa Farms, Schools and Communities Broadband Grant Program to award grants to communication service providers to invest broadband access to farms, schools and communities.

-Provides a 100% property tax exemption for broadband infrastructure built within a “targeted service area” with relatively low Internet speeds.

-Streamlines the permitting process by requiring permitting authorities for non-wireless broadband related permits to be done within sixty business days.

Weekly Update

I got to meet Wisconsin Governor Scott Walker on Tuesday. He was in Des Moines to talk with legislators as he considers a presidential run. For an hour, he discussed his upbringing, the economy, and foreign policy with members of the House.

I had the opportunity to act as the House Majority Leader for a morning this week. The Majority Leader directs the House in its daily business. She was in a meeting when we gaveled in on Tuesday. Since I am an Assistant Majority Leader, I stepped in to fill her place. The Speaker recognized me when each new piece of business came up. I held the Majority Leader’s spot until we recessed for the morning.

Fourth grade students from Lambert Elementary in Manchester were at the Capitol this week. They received a tour of the building and got to go into the House and Senate chambers. I talked to them about the law making process and answered questions about the House.

I managed a bill on the floor of the House this week dealing with air quality. Here is some history on the issue. The Air Quality Bureau within the DNR is funded by fees paid by companies who emit pollutants into the air. The amount of pollution has decreased due to increased federal regulations and pollution control technologies, which is good news. However, the Department’s budget has continued to increase. At the close of last year’s legislative session, the legislature requested the DNR convene a stakeholder group to come up with funding recommendations for air quality. The recommendation includes implementing a new fee program.

HF 640 is a combination of stakeholder recommendations and budget practicalities. Key provisions in the bill include establishing a Title V operation permit. Currently, only emission fees are collected for Title V. The language allows the commission to set and collect the operating fee, capping it at $1.25 million. The bill sets parameters for the funds allowing them to stay within the DNR and carry forward. The bill requires a stakeholder meeting to be held for Title V fee payers with the DNR annually.

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Sen. Zumbach and I with the fourth grade Lambert Students

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.iowa.gov or by phone at (515) 281-7330.

Sincerely,

Rep. Lee Hein

Capitol Update Week 14

Senate Democrats Release Targets, Propose to Spend More than Projected Revenue

Senate Democrats released their proposed budget targets on Tuesday. And true to form, they did not shy away from spending more money than the state is expected to take in during FY 2016.

The targets put forward would spend $7.357 billion in FY 2016. This would be an increase of $362.8 million or 5.18 percent over the spending levels in FY 2015. When compared to the ongoing revenue projection by the Revenue Estimating Conference, the Senate budget targets are spending 102.5 percent of ongoing revenue.

Below are the individual target levels proposed by the Senate:

Senate FY 16 Target    Change from FY 2015

Administration & Regulation             $ 51,892,994                    $ 97,225 increase

Agriculture & Natural Resources       $ 43,111,995                       no change

Economic Development            $ 44,275,763                    $ 1,693,877 increase

Education                                 $1,025,960,305                $ 39,823,940 increase

Health & Human Services         $1,904,413,758                $ 45,810,739 increase

Justice Systems                       $   742,213,713                $ 10,750,793 increase

Standings                                 $3,545,281,310                $264,645,960 increase

TOTAL                                      $7,357,149,838                 $362,822,534 increase

As part of the Senate Democrats target, they announced that they would be proposing another round of early retirement incentives. The latest round of incentives, known as the State Employee Retirement Incentive Program, expires on June 30.

While all the details are not known yet, it does appear that the Senate Democrats’ budget proposal does not comply with any of the House Republican budgeting principles:

  • We will spend less than the state collects;
  • We will not use one-time money to fund on-going needs;
  • We will not balance the budget by intentionally underfunding programs; and
  • We will return unused tax dollars to Iowa’s taxpayers.

Civil Asset Forfeiture – Are Changes Needed?

Should law enforcement be allowed to seize property if the owner has not been charged or convicted of a crime? That question has made headlines around Iowa in the past several weeks. Iowa’s civil asset forfeiture laws have come under heavy scrutiny after several publicized cases. This Wednesday, the House Oversight Committee held a hearing to gain a better understanding of these laws. The non-partisan Legislative Services Agency explained the law while representatives from the Heritage Foundation, the County Attorney’s and several members of law enforcement discussed how the law is implemented in Iowa and if the law is effective in Iowa. The committee did not make any recommendations regarding the law, at this time.

The concept of asset forfeiture is nothing new. It’s been around since before our country was founded. However, it has taken various forms and sometimes been abandoned for long periods of time. In the 1990’s Iowa’ s civil asset forfeiture law came under heavy criticism and then Attorney General Bonnie Campbell who worked to craft the law Iowa currently uses. The law was modeled after the Commission Forfeiture Reform Act from the National Alliance for Model State Drug Laws.

Iowa’s civil asset forfeiture law can be found in code 809A. These laws allow the state to confiscate property if it can be shown the property was more than likely than not used to commit a crime or furnished in exchange for the crime. This should not be confused with criminal asset forfeiture. The rights of the individual and standards of proof required to seize the property are different. Civil forfeiture has lower standards for the seizure of property and a person who has property seized under this law, has no right to an attorney. These laws are complicated and anyone facing a civil asset forfeiture is highly encouraged to contact an attorney for assistance.

Some have argued the current law does not provide enough protection for potentially innocent individuals. A person does not have to be charged with a crime for property to be taken through civil asset forfeiture, although in many cases charges are brought forward. A person who has not been charged with a crime, but who lost property to civil asset forfeiture will have to hire their own attorney to fight for the return of their property. Others have questioned how the money and property seized is used. Counties in Iowa benefit from the seizures and questions have risen regarding the spending of this money and if this encourages seizures.

While some may oppose this law, many in law enforcement believe civil asset forfeiture does serve an important purpose. Under Iowa law, property that can be tied to criminal conduct can be seized. Many believe this law strikes at drug dealers, human traffickers, and others who deal with substantial amounts of money for criminal purposes. Often times, a third party, with little or no information of the crime, is used to transport large amounts of money across state lines in order to avoid criminal charges. Civil asset forfeiture gives law enforcement anther tool to go after these criminals.

At this time, the legislature is continuing to evaluate the current civil asset forfeiture laws to determine what, if anything should be done to address the law. Any action will be thoroughly investigated to ensure changes protect both individual rights and assist law enforcement.

Weekly Recap

On Tuesday, the legislature met in a joint session for the Pioneer Lawmakers Association of Iowa program. The Pioneer Lawmakers Association recognizes the group of legislators who were sworn in 20 years ago. Jerry Welter, a former Representative from Jones County was at the Statehouse to attend the ceremony. He served from 1993 through 2001 and is a member of the Pioneer Lawmakers.

Also on Tuesday, the House and Senate held a joint memorial service to honor former legislators who passed away. A memorial service is held once every general assembly and honors members that have passed away in the last two years. This year’s memorial service recognized the memory of 19 lawmakers who are no longer with us.

Friday marks the end of week 14 of session. There is only two weeks left of the scheduled session where clerks, staff, and legislators are paid. It looks like we will be here past that deadline as we have the last few years. The House is working on budget bills in an attempt to start wrapping things up. The transportation budget is ready to be debated next week. The others will follow after that.

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Rep. Ross Paustian and I with members of Iowa Pork Producers from Eastern Iowa

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.iowa.gov or by phone at (515) 281-7330.

Sincerely,

Rep. Lee Hein

Capitol Update

Problems Continue to Plague Unopened Fort Madison Prison

Over a year after the Iowa State Penitentiary at Fort Madison was scheduled to open, the prison sits empty. Guards patrol the perimeter and inside of the buildings, lights are on and electric bills are being paid but there is still no set date to transfer prisoners. As costs continue to rise, the House Oversight Committee continues to seek answers and find solutions to this seemingly endless problem.

After two inmates escaped the maximum security prison in 2005, plans were created for a new, state of the art prison. In 2008, the estimated construction cost of the prison was

$130.7 million, and in October of 2013 a ribbon cutting was held. Since that time the new prison has faced multiple equipment problems and design flaws that have prevented the prison from being occupied.

In late 2013, prison officials found problems with the geothermal system. Pumps installed with the geothermal system were found to be the wrong size in many buildings and corrective changes had to be made. These changes could cost the state $6.7 million. As of today, the geothermal systems have been fixed and Department of Corrections Officials believe they will continue to work.

After geothermal issues were fixed, the prison failed a required smoke evacuation test. In order to receive a certificate of occupation from the fire marshal, smoke must be able to be cleared through the ventilation system. Unlike a regular building, windows cannot simply be opened in a prison to clear smoke. The solution for this problem has yet to be found, but approximately $350,000 has been spent to design and test solutions. The actual cost for the fix has yet to be determined, but it is expected to be costly. It is unclear who will pay for these changes.

Two additional problems have also been brought to light in the past few months. Air leaks in some of the buildings have required water to be shut off when temperatures dropped. Officials are working to find the air leaks and a solution to the problem. As of now, there is no estimated cost for repair to these air leaks. Additionally, there are more problems with the ventilation system, separate from the smoke-clearing problems. There is no estimated time or cost for these repairs.

Almost a year and a half after the projected opening date, there is still no end in sight to the problems at Fort Madison. The House Government Oversight Committee has continued to review documents sent by the Department of Administrative Services and the Department of Corrections. Unfortunately, there is no quick solution to these problems but the Oversight committee is working to ensure these issues never happen again in a public project and that the parties responsible for these problems cover the costs and not the Iowa taxpayer.

Prayer in the House

Many of you have contacted me in the last few weeks about a Wiccan leading the prayer in the House. A Wiccan from Cedar Rapids did present an invocation on Thursday this week. She was the guest of Rep. Liz Bennett of Linn County. I have thought a lot about this, conducted some research, and wanted to share my conclusions.

The Constitution was founded on the idea of religious freedom. The Founding Fathers recognized the importance of anyone being able to worship who or how they want. The first amendment must be upheld in situations like this.

Wiccan is a form of Paganism. Wiccans base their beliefs on living in harmony with one’s environment and community. They don’t worship devils or demons. They worship deities of earth and nature. Pagans often uphold a close relation with the earth, seeing all nature as sacred and alive with the Devine presence.

I was reminded that none of us have “rights” as legislators except by virtue of your elected office. Thus, the act of inviting someone to open the Iowa Legislature in Prayer is a privilege delegated ultimately by the citizens through the Legislature and is not a private “right” of the Representative. We are indeed REPRESENTATIVES of the people and must ask ourselves, “Does this action show respect to the faith and the will of Iowa citizens?”

How, then, should Christian legislators react? I was encouraged to walk out of the chamber before the Wiccan did her prayer, as a sign of my disapproval. However, wisdom tells me that this would have brought too much attention to this event and fuel the engines of those who would use this incident as a case for eliminating prayer all together. Supporters of the Wiccan prayer wanted Christian legislators to say no, to walk out and cause a scene. Doing that would have threatened lawsuits with goal being to get rid of the prayer all together. I do not want that.

I received an email that encouraged legislators bow their heads in silence before the Wiccan is introduced and remain in prayer to God with heads bowed during her entire prayer, asking The Lord to come against the powers of the Devil, to free the legislative process from the destructive forces of human sin, and to forgive us individually and corporately for the times we have been faithless and forgetful of His many blessings.

By being silently in prayer to God, we are bearing witness to our Faith and not causing offense to others. So that is the route I took as the Wiccan did her opening prayer.

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) 281-3221.

Sincerely,

Rep. Lee Hein

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Pictured  above are Iowa Corn Growers members with Rep. Quentin Stanerson and I.

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Delaware County Farm Bureau and I in the House chamber.

Capitol Update

How Much New Money Does Iowa Have to Spend in FY 2016?

When the Revenue Estimating Conference (REC) met in March, most Iowans learned that the committee had lowered the revenue estimate for the next budget year. The REC also issued a revised estimate for the current budget year, and some people are using those numbers to try and fool Iowans into believing the state has more new revenue than it actually does.

On March 19, the Revenue Estimating Conference projected that the state’s General Fund will take in $6.7674 billion through June 30, 2015. This was lower than their December 2014 estimate of $6.8571 billion, due to changes made this session in a bill aimed at matching Iowa’s tax with the Federal tax code. The problem is that last session the legislature used a revenue estimate that was just above the approved FY 15 spending level of 6.994 billion. Now we have the new estimate from March 19 that says only $6.767 billion is available. This leaves the state in a position where spending exceeds revenue. The last thing the Legislature should do is spend even more.

The Senate majority are claiming that the state is experiencing 6 percent revenue growth. If someone were to follow their lead take the difference between the projected revenue for FY 2015 (6.7674 billion) and the projected revenue FY 2016 ($7.1755 billion), you would find an increase of $408.1 million or 6 percent.

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But there’s a small problem with this calculations – the FY 2016 budget will be built from the actual spending levels on programs in FY 2015, not the REC’s revenue projection for that year. Below you will see a chart describing the actual growth in revenue.

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The actual amount of additional revenue that will be in Iowa’s budget next year is $180.9 million. This number comes from subtracting the actual spending in FY 2015 ($6.9946 billion) from the FY 2016 revenue estimate.   That gives the state a 2.59 percent increase.

The House is committed to these principles to produce a balanced and sustainable state budget:

  1. We will spend less than the state collects;
  2. We will not use one-time money to fund on-going needs;
  3. We will not balance the budget by intentionally underfunding programs; and
  4. We will return unused tax dollars to Iowa’s taxpayers.

Our position on government spending is reasonable, sustainable and based on simple common sense – don’t spend more than you take in, don’t spend one-time money for on-going things and don’t knowingly underfund commitments simply to make the numbers work. Doing any of those things are short-term, unpredictable practices which lead to widespread budget problems.

If the Senate majority is intent on passing budget bills that spend $227 million more than what the state will actually has, it means they have other financially disastrous plans. They may have decided to spend the state’s ending balance and return the state to Chet Culver accounting by setting up across the board cuts in FY 2017, or they may have a plan to cut $227 million out of other programs like higher education, Medicaid, or public safety. Either way, Iowa taxpayers and Iowa schools will be the losers.

This week was the second funnel week of the session. All bills have to have passed out of one chamber and committee in the other to remain alive for the rest of session. We’ll find out which bills survived and which didn’t after the official deadline on Friday.

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Pictured above are Rep. Brian Moore and I with the Jones County Safe and Healthy Youth Coalition at the Capitol this week. The group visited the Statehouse to discuss youth issues with legislators.

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) 281-3221.

Sincerely,

Rep. Lee Hein

Capitol Update

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The Revenue Estimating Conference met on March 19 for its required meeting during the legislative session.  The three-member committee reduced the amount of new dollars the General Fund will have to spend in FY 2016.

For FY 2015, the General Fund estimate was lowered by $89.7 million to $6.7671 billion.  The REC made adjustments by lowering their projections for personal income tax collections by $40.3 million and corporate income tax collections by $20.5 million.  The REC also increased their forecast for tax refunds by $33.4 million.  These adjustments are the result of the passage of the IRC update bill, which was projected to reduce revenue by $99 million.  Removing the impact of the IRC update bill, the net impact would be a slight increase in FY 2015 revenue by $9.3 million.

For FY 2016, the REC lowered the General Fund revenue projections to $7.1755 billion.  The group raised their forecast for personal income tax revenue by $56.4 million, but that was nearly offset by a reduction in the corporate income tax projection of $49.6 million.  The REC also increased their projection for tax refunds by $36.4 million.

While IRC update bill had lowered FY 2015 revenue, it was expected to raise FY 16 revenue by $19.2 million to $7.2138 billion.  The REC estimate eliminates the boost from the bill and further lowers the FY 2016 number by an additional $19.1 million to the new level of $7.1755 billion.

The amount of new revenue available to be spent is the difference between the FY 2016 revenue forecast ($7.175 billion) and the FY 2015 budget ($6.9946 billion).  The revised estimate means the state has $180.9 million of new money to spend in FY 2016.  Prior to today’s meeting, we had been working under the assumption that the state would have $200 million of new money in FY 2016.

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All three members of the REC said there had been little change in the economic factors since their last meeting in December.  Economic growth in the US and Iowa remains solid, if at a modest pace.  Iowa’s collections from income tax withholding remain strong.  The average work week is now at 42 hours and wage growth is beginning to pick up in-state, even though is has yet to reach the level seen before the 2008 recession.

There is concern over Iowa’s ag economy.  The state saw a loss of manufacturing and ag machinery jobs in the last few months and the Rural Main Street Index fell below neutral levels.  The strong dollar is having an impact on export markets, which are a key part of Iowa’s ag economy.  Average corn prices are still 43 percent below their 2013 highs with significant supplies still in the bins.

Even with these caution signs, Iowa’s farm economy is not in trouble.   Income tax returns are showing farmers are holding their own or posting small profits from the last year.  Ag debt levels are at a manageable level, since many of the purchases made during the last few years were with cash.  Livestock producers continue to have solid prices.  Input costs should begin to decline if lower oil prices remain during calendar year 2015, and the over-supply of corn should be reduced in the next two to three years.

Update on School Start Date

The House passed the school start day bill stating schools can start on or after August 23rd by amending SF227. The bill passed the House in a bipartisan vote, 71-29. I think it’s a good compromise for an issue that has be debated since long before I was a part of the legislature.

Current law states schools cannot start before September 1st without a waiver. This bill is a compromise between school districts and the tourism industry. On Wednesday, the Senate passed the bill with a bipartisan vote of 28-22, but Senate Majority Leader Gronstal motioned to reconsider. That means the bill will stall in the Senate until it is reconsidered. If not dealt with by the end of session, it will be sent back to the House for the Speaker to sign and then to the Governor’s desk for his signature. This option unfortunately delays the decision until the end of the session and puts schools in limbo.  The bill has passed both Chambers and should be on the Governor’ desk.  This issue should have been solved this week and put it behind us but Senate leadership is only interested in playing politics.

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Matt and Beth McQuillen donated a 139-acre conservation easement along the Maquoketa River in Delaware County to Iowa Natural Heritage Foundation. Mature upland woodlands are interspersed with limestone outcroppings. About 30 acres of former agricultural land has been planted with native prairie species and trees. This reconstructed prairie provides habitat for grassland birds, small mammals, insects, reptiles and amphibians. The protection of this land helps prevent erosion, slow runoff and improves the water quality of the Maquoketa River, which was listed as an impaired waterway in 2012 under the Federal Clean Water Act. I want to thank the McQuillen’s for their generous donation.

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Pastor Darryl Larson and his wife Nancy were at the Statehouse on Tuesday. Pastor Darryl delivered the opening prayer to the House chamber. Afterward we visited and went on a tour of the Statehouse.

I will be at a forum in Monticello at noon on Friday in the City Council Chambers and another on Saturday in Dyersville at 10 am at Golfside Grill. You can contact me by e-mail at lee.hein@legis.iowa.gov or by phone at (515) 281-7330.

Sincerely,

Rep. Lee Hein