Capitol Update Week One

Governor Branstad Releases FY 2015 Budget Proposal

During his Condition of the State address on Tuesday, Governor Terry Branstad laid out his budget proposal for Fiscal Year 2015. The proposal implements the major policy initiatives passed by the Legislature during the 2013 session and introduces some new ideas as well.

The Governor’s budget is proposing to spend $7,000.9 billion from the General Fund in FY 2015. This is slightly above the Revenue Estimating Conference’s December ongoing revenue estimate of $6,983.2 billion. The proposal represents an increase of $505 million over the FY 2014 budget. Over $330 million of the increase goes to implement two bills – the Commercial Property Tax Relief bill and the landmark Education Reform package, which included raising supplemental state aid for schools by $245 per student. Another $86 million is solely for paying the state’s share of Medicaid costs. Due to Iowa’s strong economy and federal changes to the financing formula, the state’s share of Medicaid is at an all-time high.

On the revenue side, Governor Branstad proposed that the state eliminate the income tax collected on military pensions. This would result in a $10 million reduction in ongoing revenue in FY 2015. At this point, there is no federal tax coupling bill since Congress has not enacted any changes to the federal tax code yet. That may change if the omnibus appropriations bill being considered this week in Washington actually passes.

Among the highlights of the Governor’s budget proposals are:

Home Base Iowa – Governor Branstad has requested two separate $1 million appropriations for implementation of the Home Base Iowa initiative, which will work to attract veterans to move and live in Iowa. The first request will fund an Iowa Workforce Development study researching the compatibility of military occupational training and service with state licensing requirements. The second request would fund a grant to a non-profit veteran service organization to use to market Iowa as a place for veterans to locate after completing their military service.

Apprenticeships – As part of his proposals to help Iowans acquire the necessary work skills to join and advance up the career ladder, the Governor provided funding for two different apprenticeship programs. The Governor is expected to introduce legislation revising the 260F program to change the focus to apprenticeship training. This would include increasing the funding available for this program by $1 million. Part of the Governor’s changes will be an increase in funding, which is reflected in his FY 2015 budget by an additional $1 million being requested. The Governor is also proposing to expand the existing Innovative Business Internship Program, by providing apprenticeship opportunities to Iowa students studying in the STEM fields (science, technology, engineering, and mathematics) and providing $2 million as incentives to employers to participate.

Supplemental State Aid for schools – Governor Branstad’s budget provides funding for the $245 per student increase (4%) in supplemental state aid to schools in FY 15 that was approved last session.

Mental Health Equalization Fund – the Governor did include the $29.8 million in equalization funding that was initially provided last year. There was some speculation that these funds would not be included in the FY 2015 proposal.

Regents Institutions – Governor Branstad provided the 4% increase in general aid funding for the three Regents universities. 2.3% is for maintaining the tuition freeze, while the remaining 1.7% is for their on-time graduation initiatives. The Governor provided initial funding in the RIIF budget for the next series of infrastructure projects at each of the universities.

Community Colleges – the Governor maintained community college general aid funding at the FY 14 level.

Some Iowans were initially concerned that the Governor’s budget proposal called for spending more than the ongoing revenue projection by the Revenue Estimating Conference.  The difference is approximately $27.7 million, which is a relatively small gap to be closed.  And in the past three years, the budget enacted by the Legislature and signed by the Governor has been lower than his initial proposal.

Iowans can rest assured that House Republicans will not end the 2014 legislative session until they have passed a budget that meets their 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.

Governor and State Leaders Announce “Hearing in the Heartland Supporting the RFS”

On Friday, January 10, 2014, the Governor Office issued a press release in which Iowa Governor Terry Branstad and Lt. Gov. Kim Reynolds announced they will lead a group of senior state officials from Iowa and the Midwest to organize and host a public hearing allowing citizens outside of Washington, D.C. the opportunity to testify about the importance of the Renewable Fuel Standard (RFS).  The RFS has proven an important policy framework for empowering consumers with additional and lower-cost choices at the pump, diversifying our nation’s energy portfolio, reducing transportation emissions, supporting the Midwest economy, and reducing our dependence on overseas oil.

Last month on December 20, 2013; Governor Branstad, Lt. Gov. Reynolds, Iowa Secretary of Agriculture Bill Northey and the entire Iowa congressional delegation sent a letter to President Obama, Environmental Protection Agency (EPA) Administrator Gina McCarthy, and U.S. Department of Agriculture (USDA) Secretary Tom Vilsack encouraging Federal officials to host a public hearing in Iowa or the Midwest to give more citizens the opportunity to provide perspective and data on the EPA’s proposal to reduce volume obligation levels for 2014 in the RFS.  The White House, Administrator McCarthy and Secretary Vilsack each declined the invitation and the opportunity to host a hearing on this important issue.  Thus, Gov. Branstad and Lt. Gov. Reynolds, along with other leaders from the Midwest have stepped up to host this important hearing event. As Chairman of the House Environmental Protection committee plan to be part of the event and show my support.

Event Logistics:  The event will be held at Hall of Laureates, 100 Locust Street, Des Moines, Iowa, on January, 23, 2014, with comments beginning at 8:30 AM, Central Standard Time.

Contact and RSVP Information:  Interested individuals should RSVP to Julie Vande Hoef, Policy Advisor for the Governor, at Julie.VandeHoef@Iowa.gov by 9 AM on Tuesday, January 21, 2014.  Individuals should denote the following:

  • Full Name
  • Organization Being Represented (If applicable)
  • Day of Event Phone Number
  • Email Address

Statement whether the individual would be interested providing verbal testimony as time allows.

Week One Recap

Greetings from the State Capitol! I have been spending the first week of legislative session getting back into the swing of things. On Monday, we gaveled in and officially kicked off the second year of the 85th General Assembly. Governor Branstad delivered his annual Condition of the State address on Tuesday. He outlined his goals for this session as well as delivered his proposed budget. Iowa Supreme Court Chief Justice Cady also delivered the Condition of the Judiciary on Wednesday.

As with last year, I serve on the Agriculture, Ways and Means, and State Government committees. I am also Chairman of the Environmental Protection committee. I look forward to hearing your input so I can share on these committees to make Iowa a better state.

Thursday the House passed House Resolution 101 which encourages the Environmental Protection Agency to not change renewable fuel standards. Keeping the standards as is will lower fuel prices and renew the commitment to Iowa farmers. I sponsored the Resolution and was honored to read part of it aloud to the Chamber as it passed. HR 101 passed the House Chamber unanimously.

hein rfs

Reading HR 101 to the House of Representatives on January 16th, 2014.

Next Friday I will be in Monticello at the Jones County Economic Development Forum. It starts at noon in the City Council Chamber. On Saturday the 25th I will be at the Dubuque Farm Bureau Forum at Golfside Grill in Dyersville. The forum runs from 10 am to noon. Both are open to the public and I encourage you to attend.

I’m excited to be back in Des Moines to represent district 96. It’s great to be part of a group of people who put partisanship aside to accomplish good for the people of 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,

Lee Hein

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