Agreement of School Funding Reached
The conversation on the overall state budget and specifically, on education funding for the 2016/17 school year, took a step forward this week. After over a month of negotiations on the level of funding, an agreement between the House and Senate was reached this week.
After weeks of negotiations and a new March revenue estimate, the agreement is a 2.25% per pupil increase ($6,446 to $6,591), falling in the middle of earlier proposals. At the table for discussion was the Senate’s proposed 4% increase ($6,704) and the House’s proposed 2% increase ($6,575). The Governor’s proposal earlier this year was for 2.45% ($6,604).
Additionally on the table for discussion were priority items for school districts in upcoming years, specifically funding to help pay for newly-mandated statewide assessments and for required summer reading programs as part of the Early Literacy Initiative. The assessment costs range anywhere from $8.3 to 9.3 million and summer reading ranges anywhere from about $6 million to $9 million. Both of these items were rejected by the Senate Democrats who preferred to discuss them as part of the Education Appropriations bill later this year, which funds the universities, community colleges, grant and loan programs, and the Department of Education, among other things.
Under the 2.25% agreement schools will see an additional $153.8 million next year. Combined with funding increases over the past 5 years, this will total nearly $660 million in increased funding.
Governor Signs Coupling Bill
This week the governor signed House File 2433—a bill that coupled with the federal internal revenue code for 2015 taxes and provided Iowa manufacturers with certainty and clarification on the tax exempt status of consumable supplies.
To couple, the bill updated provisions in the Iowa Code to make references to tax year 2015. (The only tax year the legislation coupled with). By operation of those references, Iowa Code couples with the federal tax code for many tax provisions recently extended by Congress.
The more significant federal tax changes that House File 2433 coupled with include:
- Deduction of up to $250 for out-of-pocket expenses for teachers
- Tuition and fees deduction for higher education expenses
- Election to deduct state sales/use tax in lieu of state income tax as an itemized deduction
- Deduction for mortgage insurance premiums as deductible qualified residence interest
- Nontaxable IRA transfers to eligible charities
- Small businesses expensing (instead of depreciate) the first $500,000 of equipment cost (known as Section 179 expensing)
The bill also provided for the decoupling of Iowa Code with federal bonus depreciation provisions. Bonus depreciation is being phased out in the Internal Revenue Code and will be gone by 2020.
News from District 96
This week I am excited to announce that Lake Delhi, which classified as 357E, will now be able to participate in a Watershed Management Authority. Before this piece of legislation recreational lakes and combined districts classified as 357E were unable to participate. This means that the Lake of Delhi Board of Trustees will be able to designate a representative to sit on a watershed management authority. Watershed Management Authorities are used to coordinate water quality projects within the watershed.
Monday night I spoke to the Co-Op Association about Water Quality Issues in Iowa as well as legislation that the House Agriculture Committee addressed during this session. Tuesday night the Iowa Pork Producers held a leadership academy and I met with them. I spoke about Agriculture Issues that were important to the group. Wednesday morning the Pork Producers visited the Capitol and spoke with their respective legislators.
During the session on Wednesday the House passed a bill setting the increase in Supplemental State Aid for schools at 2.25%. This is a good compromise on spending between the House and the Senate that maintains the budgetary practice of not spending more than we take in.
As always if you have any questions feel free to get in touch. My phone number is (319) 480-1997 and my email is email@example.com.