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SMALLER, SMARTER

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Capitol Review 2-5-16

Voters are Energized

Over 186,000 Iowa Republicans cast ballots on caucus night this week, setting a new record for total turnout and participation. Many attendees were first-time caucus-goers, showing that Iowans are clearly energized, enthusiastic, and ready for a change of president. I was honored to speak at my own Precinct on caucus night where 274 people showed up!

What is Coupling and Why is it Important?

The coupling bill updates Iowa law to conform to certain tax changes enacted by Congress.  It is always important that this bill is passed quickly as tax preparers and accountants need to know what deductions Iowans can take on their 2015 income taxes.   If the Legislature fails to act on coupling, the result is a $96 million tax increase on hardworking Iowans. Section 179, of the tax code, allows businesses to write off capital investments, benefiting more than 70,000 businesses and individuals each year. Failing to couple with Section 179 will disproportionally hurt our small businesses and farmers that have made investments at a time when they’re already facing many challenges and uncertainties.    House Republicans know that incentives like Section 179 allow small business owners to make investments and grow jobs in their communities. House Republicans are committed to giving taxpayers a seat at the table, which House File 2092 accomplishes. The tax coupling bill has an impact on the FY 2016 ending balance and the FY 2017 on-going revenue levels.  Any agreement will impact discussions on school aid and budget targets.   The Governor has already recommended a plan for coupling that has a negligible effect on FY 2016 revenue while adding an additional $48.5 million to FY 2017.  The Governor’s plan is to not couple at all for tax year 2015.  That means that taxpayers would not be able to take advantage of any of the tax extenders Congress just passed that have an Iowa component when they do their taxes this April.   The Governor then recommends permanently coupling with the IRC in tax year 2016 with the exception of Section 179 expensing or bonus depreciation. The Governor’s plan permanently leaves out those provisions. Section 179 expensing is an accelerated depreciation mechanism for business purposes and bonus depreciation is something similar to that except for larger expenses. The Governor’s recommended coupling provisions are estimated to have a negligible impact on FY 2016 General Fund revenues while increasing FY 2017 General Fund revenues by $49.2 million.   The House approved a different plan on Thursday, Jan. 28.  The House plan couples with everything except bonus depreciation in tax year 2015.  It also does not add the permanency of the Governor’s plan.  There is a $95.7 million impact on FY 2016 revenue/ending balance.  That money goes directly to taxpayers.  Additionally, $86.5 million is added to FY 2017 on-going revenue with roughly $55 million of that available for appropriation under the state’s expenditure limitation law.   Senate Democrats have given no indication on their plan for tax coupling which complicates and slows down the budget process this session

Senate Democrat’s Puzzling Budget Numbers

Senate Democrat’s released budget targets which spend about $70 million more than the state collects in on-going revenue. As a percentage, they spend 101.1% of on-going revenue. Senate Democrats did not release their plans on Medicaid savings or tax coupling or even a simple balance sheet which makes it difficult to see a complete picture of their spending plans.

As part of their targets they propose an early retirement plan that “saves” taxpayers $10.6 million.  House Republicans are extremely skeptical that is a reliable number.  Last session Senate Democrats proposed a similar plan which resulted in zero savings.  It was rejected by House GOP budget negotiators.

Senate Democrats are proposing a 4% increase in Supplemental State Aid for schools but the money necessary to fund that 4% increase is not included in their budget targets.  To fund 4% they need to provide an additional $65.8 million in spending within the target for the Standings Bill.  But only $2.9 million more is provided. That means either they have cut another area included in the Standings Bill – such as property tax credits – or they are willfully underfunding their 4% SSA increase and instead forcing property taxpayers to pay more to make up for their lack of funding.

Visitors at the Capitol

voss

Dr. Anthony D. Voss, Superintendent of Hudson Schools

Capitol Review 1-29-16

Education Funding

This week House Republicans passed a funding increase for K-12 schools totaling $81 million. When combined with money for Teacher Leadership, this represents 84% of the state’s new available revenue going to education.

Since Republicans reclaimed the majority in the Iowa House, the number of full-time teachers in Iowa classrooms has increased by 809. While Democrats held the Iowa House, the number of full-time teachers dropped by 907.

full time teachers

Fiscal Year 2017 State Budget

The state is projected to have $153 million in new available revenue next fiscal year, with nearly $200 million of built-in spending increases. Some will claim that there is more than $153 million to spend. That is because they are willing to use ending balance (what I call our “savings account”).  The savings account will be less than $100 million after this year.

The State’s economy is strong, but growth is slowing. There is no economic emergency, but with slow growth we will need to be very strategic with the commitments we make.

Fighting for Taxpayers, Providing Certainty

House Republicans are committed to giving taxpayers a seat at the table, which House File 2092 (federal income tax coupling bill) accomplishes, and chalks up a win for nearly all taxpayers.

Who benefits from House File 2092?

-          Small businesses are the drivers of our economy. HF 2092 is the only proposal that helps them make investments in their businesses so they can grow and create even more jobs in our communities.

-          Teachers will be able to deduct out-of-pocket expenses related to classroom supplies.

-          Seniors will be able to give tax-free contributions to qualifying charitable organizations.

-          Homeowners will be able to deduct mortgage insurance, just like they would mortgage interest, keeping more money in their pockets to spend in their communities.

-      Parents and students will be able to deduct qualifying higher education expenses, reducing the cost of college and continuing education.

Visitors at the Capitol

boganMichelle Bogan

hawkeyeHawkeye Community College

kenyonDr. James Kenyon, School Board President, Cedar Falls

Capitol Review 1-22-16

Smaller, Smarter Government

A new subcommittee of the House Appropriations Committee began the task of reviewing the standing appropriations within the state’s budget.  The Budget Review Subcommittee, led by Rep. Ken Rizer, will help set the foundation for the Standing Appropriations bill that will be started in the House this year.

Unlike other line items in the state budget, there are a series of state appropriations that are established in either the Iowa Code or Iowa Constitution.  These appropriations are known as standing appropriations.  The largest standing appropriation - State Foundation School Aid - is reviewed every year as the Legislature sets the annual Supplemental State Aid figure for growth in school funding.  But most of the remaining standing appropriations continue to be funded every year without serious legislative review.

The Budget Review Subcommittee will spend the next few weeks reviewing many of the existing standing appropriations.  They will work to identify what each line item does, review its level of funding, and determine if any efficiencies or reforms can be implemented to improve that line item’s function. 

The review will begin with an examination of the Legislative budget.  Funding for the Legislature is set out in the Iowa Code, which grants the General Assembly a standing unlimited appropriation.  These funds are used to cover the costs of the House of Representatives, the Senate, and the central non-partisan offices like the Legislative Services Agency and the State Ombudsman’s office.  Next week, the subcommittee will move on to look at local grant funding in the Department of Cultural Affairs and tourism funding under the Iowa Economic Development Authority.  On Wednesday, discussion will turn to child development funding distributed to local schools by the Department of Education and non-public school transportation funding.

Meetings for this subcommittee will be on Mondays and Wednesdays in room 102 at noon.  Representative Rizer is my roommate in Des Moines.  I look forward to being in constant contact and discussion with Representative Rizer on the information being presented in these subcommittee meetings.  

Ready, Set, CAUCUS!

Well folks, it’s that time again…Caucus time. Finally receiving all those mailers, emails, and phone calls can pay off!

When is the Caucus?

As you likely know, the Iowa Caucuses are on February 1, 2016 at 7 p.m. at your respective polling location.

Where is my polling place?

It is important to note that your Caucus location might be different than your typical polling place. To determine your Republican Caucus location, first know the precinct you reside in. If you are unsure of your precinct visit the Secretary of State’s website here. Once you know which precinct you belong to visit https://www.iowagop.org/2015/12/03/iowa-gop-precinct-locations to see where your precinct meets for the Republican Caucus. If you have questions about the Caucus location or time you can contact the Republican Party of Iowa at (515) 282-8105. If you have questions about your precinct contact the Secretary of State at (515) 281-5204.

Am I eligible to participate in the Republican Caucus?

In order to be eligible to vote in the Republican Caucus one must be a registered Republican voter and at least 18 years of age by the General Election (November 8, 2016). Thus, you must be born on or before November 8th, 1998 in order to participate. “If you are not a registered Republican, you can contact your county auditor to register immediately, and will also have the option of same-day voter registration at the caucus location.”

If you plan to register to vote at the Caucus, it is important that you arrive early. When registering to vote at the Caucus you must have (1) proof of ID and (2) proof of residence. Acceptable forms of ID include: Iowa driver’s license, Iowa non-driver ID card, Out-of-state driver's license or non-driver ID card, U.S. passport, ID card issued by employer, U.S. military ID, or a student ID issued by Iowa high school or college. Acceptable forms of proof of residence include: a photo ID containing your current address, a residential lease, a utility bill, a bank statement, a pay check, or a government check.

If you have questions about registering to vote or acceptable documents you may contact the Secretary of State at (515) 281-5204.

Capitol Review 1-15-16

We are beginning another year in the Iowa legislature.  I’m excited about working with you to help influence the state of Iowa in a good way.  I am also looking forward to working with the new Speaker of the House, Representative Linda Upmeyer.  She is the first woman ever elected to the position of Speaker.

linda upmeyer

We (my staff and I) plan to continue our weekly newsletters.  Please feel free to email me anytime with your ideas and concerns. I plan on attending the forum in Cedar Falls, put on by the League of Women Voters, as often as I can.  The forum is offered every other weekend on Friday evenings or Saturday mornings.  I do have a prior commitment on every Friday night, so I will miss most of the Friday meetings, but plan on being at the Saturday morning forums. I am also available for meetings with any constituent, either here at the Capitol or back home in Black Hawk County.  You can set up a meeting with Dani, my clerk, at this email: This email address is being protected from spambots. You need JavaScript enabled to view it.

The big issues this year are:

FY 2017 State Budget

House Republicans are going to continue budgeting like Iowa families. Our budgeting principles have served the state well and created stability and predictability for those that rely on state services.

The State’s economy is strong, but growth is slowing. There is no economic emergency, but with slow growth we are going to have to be very strategic with the commitments we make.

  • The state is projected to have $153 million in new revenue next year with nearly $200 million of built-in spending increases.
  • In addition to that, we will have to find room for priorities like schools.

Below is a breakdown of the Governor’s budget:

While it did not play a prominent role in his Condition of the State speech, Governor Branstad’s spending recommendations for Fiscal Year 2017 became the central point of discussion within the Capitol once he finished speaking Tuesday morning.

The Governor is proposing a General Fund budget of $7.412 billion in the upcoming fiscal year.  This would be an increase of $237.8 million over the budget for FY 2016, or a 3.31 percent raise in spending.  This amount is $110 million less than what the Governor envisioned last January, when he proposed a two year budget for FY 2016 and FY 2017.

The Governor’s proposal sets a spending level that is above the on-going revenue amount set by the Revenue Estimating Conference last December.  That level is $7.3274 billion.  This is the number House Republicans will use.  

Address

PO Box 1142
Cedar Falls, IA 50613

 

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