Capitol Update for February 23rd, 2012

Recap of Week 7

With funnel week this week, all the committees have been busy getting their necessary bills through and ready for debate on the floor. If a bill doesn’t make it through committee this week, it can no longer be considered this session.

On Tuesday I had the chance to greet members of Manchester’s Good to Great program. They are advocating a river project to make white water rapids in the Maquoketa River, which runs through Manchester.                    

The Jones County Farm Bureau also visited the Capitol on Tuesday. I took time to hear their thoughts and concerns about the gas tax and tax reform.

The Cost of Doing Nothing

The General Assembly and Governor Branstad have to make a business decision regarding investing $5 million (a small portion of the estimated total $18 million reconstruction and restoration costs) in rebuilding the dam at Lake Delhi.

One of the key considerations for the Iowa House is the impact on the Maquoketa Valley School District’s education system, and how much additional money the state would have to spend through the school aid formula to replace lost property values. The Lake Delhi Community accounts for 20% of all of Delaware County and a substantial portion of the School District property tax base.

Let me explain how the destruction of the dam has and will affect the state’s general fund.

Currently, the State of Iowa provides about half of the cost of educating our young people through the School Aid Formula. This formula has three parts: a basic property tax levy of $5.40, State Aid that brings each school district up to a statewide average of 87.5% of the average per pupil cost statewide and a second property tax levy that generates the final 12.5% of funding. Iowa spends an equal amount on each child as the courts have ruled (currently about $6,000 per pupil).

Maquoketa Valley generates more property tax money because the Lake Delhi Community makes it a “property rich” district in terms of assessed valuation. Without the dam, property values of the Lake Community have dropped nearly 40% and are expected to continue to decline.  This will mean the state has to put more money into the school district. It also means Maquoketa Valley property tax payers will have to pay more property taxes to make up for the lost Lake Community value.

This is projected to cost the State of Iowa approximately $300,000 to $500,000 for every year going forward; or the state can make a one-time $5 million investment to restore the dam and maintain the property tax base for the school district. From a budget perspective, it makes more sense for a one-time investment, rather than paying more money going forward forever.  This is truly a pay me now or pay me more, later issue.  I hope you can support the appropriation.

House Approves Senate Changes the Prison Supplemental Bill

On Tuesday, the House approved Senate File 2071, the FY 12 supplemental appropriations bill.   

When the Senate initially approved the bill, $8.5 million was appropriated to the Department of Corrections.  The bill also created a third round of funding available from the Mental Health Risk Pool ($5.0 million).  The Senate approved the bill on February 1 on a 26-23 party-line vote. 

The House approved the bill for the first time on February 15 on a 96-0 vote.  The House reduced the supplemental to the Governor’s recommendation of $6.5 million and off-set the appropriation by reducing the appropriation for Medicaid by $6.5 million.  The House also changed the risk pool language to only allow for the first two tiers of counties to be eligible for the additional mental health funding.

On Monday, February 20, the Senate approved the bill for a second time.  The House agreed to add $1 million for prisons and CBCs, which went to the following institutions as follows:

  • Rockwell City Prison — $86,998          Clarinda Prison — $187,387
  • Mitchellville Prison — $216,965           Fort Dodge Prison — $196,961
  • CBC District 2 — $130,853                  CBC District 4 — $25,498
  • CBC District 5 — $155,338                      

In addition, the Senate appropriated $7.2 million from the Economic Emergency Fund (EEF) to restore the standing appropriation to the Property Tax Relief fund for mental health services.  This is needed to prevent a $7.2 million property tax increase due to approving a two-year budget last session.

Finally, the Senate amendment removes the provision that county MHMRDD committees are not required to submit a three-year strategic plan by April 1, 2012 to DHS, since the Legislature is in the process of overhauling state mental health services.

The House approved the Senate amendment on a voice vote and approved SF 2071 on a 95-0 vote.

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

 

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