PDI Policy Perspectives - February 4, 2018

POLICY PERSPECTIVES | February 4, 2018

THIS IS IOWA Legislative Showcase

Legislative Session Update

PDI Issue Focus

Bills Being Tracked for PDI

Click for PDI Bill Tracker

THANK YOU to all those who were able to join us for the This Is Iowa Legislative Showcase at the Iowa Fairgrounds!!

The revised open air format was a great success, and much preferred by the 50 House Representatives and 26 Senators who attended, all of whom seemed to stay longer than they did under the old format. The organizing committee will compile feedback from the event, compare notes, and chart a course for 2019. If you have thoughts about the event, feel free to email them to [email protected] and we'll be sure they get passed along.

Legislative Session Update

Monday, February 5, marks Session Day 29 of the scheduled 100-day session. Four weeks down and ten to go before target adjournment.

Monday also marks caucus night across Iowa, so be sure to attend yours! The Legislature will not be working in Des Moines that day in order to enable legislators to attend their own caucuses. While this is not a presidential election year, the Governor and Lieutenant Governor's race will be on November's ballot along with all statewide elective offices (Attorney General, Auditor, Treasurer, Secretaries of State and of Agriculture), all four congressional races, the entire 100-member Iowa House, 25 seats of the 50-member Iowa Senate, and a number of local races.

First Funnel Coming

We are now two short weeks away from the first major deadline of the legislative session - the First Funnel on Friday, February 16, 2018. There are two "funnels" built into the Legislature's schedule every year that are essentially winnowing devices for eliminating any legislation that is not making forward progress. By the first funnel, any non-tax or spending bill must have been approved by the committee to which it was assigned or else it is dead for the year. There are still ways to advance a concept after the funnel deadline through amendment to another bill or leadership bills.

A byproduct of the coming first funnel deadline is that bills are being introduced at a furious pace right now. It is absolutely CRITICAL that you look through the bill list and keep checking it often to see if anything new pops up. The looming funnel deadline often means a subcommittee meeting may be scheduled on a bill right after the bill is introduced. In the days ahead, some bills will go from introduction to being voted out of committee within a number of hours.

FY 2018 De-Appropriations

While the coming funnel keeps the policy committees racing, the House, Senate and Governor continue to negotiate on the budget. Not the upcoming FY 2019 budget that begins July 1, 2018, but the current FY 2018. The Governor suggested a deappropriations package that totals around $27 million; the Senate has moved their version out of committee that cuts closer to $52 million. We are waiting to see what the House proposes. Whatever they end up with will need to be cut from the CURRENT FISCAL YEAR, which has less than five months remaining.

Why the big disparity between the Governor and the Senate's deappropriations bill? You may recall from last Fall that the fiscal year takes some time to close out. Fiscal Year 2017, despite ending at midnight on July 1, 2017, was not finalized until October 2017 due to the amount of time it takes to ensure receipts and expenditures made into and out of the State's multiple accounts gets recorded in the proper place. Senator Schneider, the Senate Appropriations Committee Chair, explained in committee that the Senate would like to cut enough from FY 2018 not just to balance the numbers, but to put 1/2 of one percent in the bank, just in case numbers continue to sour after the Legislature has left town for the year. Needing to return in October for a Special Legislative session to make transfers out of the State's emergency funds right before the November election is not ideal.

The Fiscal Year 2019 budget is expected to be equally contentious. However, work on that cannot really begin until after the March meeting of the Revenue Estimating Conference (REC), the date of which has not yet been set. The Legislature has to review the December 2017 estimate and the March 2018 estimate and then enact a budget that uses the lower of the two projected revenue numbers. We do not expect to see much about the FY 2019 budget until after those numbers are determined (other than the one percent - $32 million - increase for schools which was announced this week).

PDI Issue Focus

Issue Alert - Economic Development Funding Cuts

The single biggest issue of concern for PDI right now at the Capitol is how the deappropriations bill ends up treating economic development. The Senate version of the bill ( SF 2117) contains some staggering cuts to economic development resources, and these are cuts that would need to occur between NOW and June 30, 2018. These cuts include the following:

$396,039 from the IEDA Administration budget. This budget was cut by over $1 million just last year (about 7.49 %), down to $13.4M. This cut would take this line item down to about $13 million going into the FY 2019 budget cycle.
$150,000 from Regional Tourism Marketing at IEDA. This budget was capped last year at $900,000 from its normal level of $1.1 to $1.3 million. This cut would take this line item down to $750,000 going into the FY 2019 budget cycle.
$7 million from the High Quality Jobs Program at IEDA, leaving $8.9 million (a cut of 44%).
$7 million from the Skilled Worker and Job Creation Fund to the State's General Fund.

You should take a moment to contact your legislators and let them know your thoughts. You can find your legislators by going HERE and typing in your home address.

Future Ready Iowa

The Governor's Future Ready Iowa bill ( SSB 3087 and HSB 602) has been introduced in both chambers and should see discussion soon. The Governor's Office provided us with a summary of the bill that you can review HERE. PDI is supporting this legislation.

Tax Increment Financing

The TIF Bill we alerted you to recently ( HF 2063) was passed by subcommittee, but faces an uncertain future in the House Ways & Means Committee. PDI is registered in opposition to the bill and testified against it in subcommittee. We have committed to legislators that we are willing to work with them on the legislation, however the large scope of the bill makes it difficult to determine exactly what TIF problems the Legislature really wants to address. Please keep talking with your legislators about TIF and let us know what kind of feedback you receive.

Property Tax Backfill

With the Iowa budget continuing to be dire, we are closely monitoring the Legislature's moves with regard to the Commercial & Industrial Property Tax Replacement Claims system, commonly referred to as the "Backfill." As we stated in the last issue, PDI is on record as supporting the continuation of the backfill.

If you need background information about the backfill, a one pager with some history and talking points is available HERE. Also, an Excel spreadsheet is available HERE that will allow you to look up how much your city, county, school district or other taxing entity receives from the backfill.

Lease Purchase

Legislation ( HSB 568 and SSB 3110) that would curtail a local government's ability to use "lease purchase" for projects is moving forward in both legislative chambers. The legislation was recently amended to expand the definition of public improvement in order to block this use in projects that are paid for in whole or in part with public money. PDI initially registered as Undecided in order to be able to track the legislation. You can find some media stories about the bill HERE and HERE.

Bills Being Tracked for PDI

This is a list of the bills being tracked for PDI. The bill list is updated constantly, so if you wish to see the updated bill list, just go to http://www.ialobby.com/billtracker/pdi/

HF2004

Workforce Housing Tax Incentives Program Eligibility