PDI Policy Perspectives - February 5, 2017

PDI POLICY PERSPECTIVES | February 5, 2017

Attend Grow Iowa Day!

Legislative Session Update

Other Issues

Bills Being Tracked for PDI

Click for PDI Bill Tracker

Please Attend

PDI Grow Iowa Day at the Capitol 2017

Wednesday, February 8, 2017

10:30 a.m. - 12:00 noon

Note Time Change due to conflicting event

(Exhibitors set up at 9:00 a.m.)

State Capitol, Des Moines, IA

PDI Members: Due to a competing lunch event at GID on Feb. 8 we are adjusting the schedule for maximum exposure & serving breakfast pizzas, arriving at 10:15 a.m.

Here are the details:

9:00 - 10:00 am - Booth Set-Up

Location : The first floor of the Capitol - Rotunda

*You should be able to load/unload your vehicle from the west front entrance of the Capitol.

10:00 am - 10:15 am Legislative Briefing - Update from PDI's Legislative Committee
Co-Chairs and PDI's lobbyists.

Location : The first floor of the Capitol - Rotunda - In front of West Entrance - Behind PDI Registration/Pizza Tables.

10:30 - 12:00 noon -PDI's Legislative Event - An opportunity to mingle with legislators and staff while enjoying free breakfast pizza and refreshments!

Location : The first floor of the Capitol - Rotunda

12:00 - 12:30 Booth Breakdown

Location : The first floor of the Capitol - Rotunda.

12:30 - 1:00 pm Legislative De-Briefing

Location : The first floor of the Capitol - Rotunda - In front of West Entrance - Behind PDI Registration/Pizza Tables.

Legislative Session Update

Monday, February 6, 2017, marks the 29th Session Day and the start of the fifth week of the 2017 legislative session. The Deappropriations bill that trimmed $113 million from the FY 2017 budget also trimmed 10 days from the legislative session (sort of) by cutting legislative per diems down to 100 days (instead of 110). The Legislature's target adjournment date is now April 18. The "sort of" is a reminder that the end of per diems is not a hard deadline for the end of session; they can, and often do, go past that date.

The first four weeks of session always contain a lot of very necessary busy work - speeches by the Governor, Chief Justice and Iowa National Guard, bill introductions by the dozen and getting freshman legislators up-to-speed on the process of committee and floor work. Because of all this, it is often difficult for the Legislature to grapple with many policy issues in the beginning of the session. This year has been no different, so they have honed in on three issues that they want/need to get done early: the deappropriations bill, school funding and legislation to remove state funding to Planned Parenthood.

The deappropriations bill has been signed by the Governor and is being implemented now by the Governor's team. The bill consists of about $88 million in cuts and about $25 million in fund transfers. The cuts hit most of state government - except K-12 schools and a few other areas - with a 4.5 percent reduction in the current fiscal year that ends June 30. The Governor's budget then proposes to extend that lower amount of funding to state agencies into the next two fiscal years (FY 2018 and FY 2019).

The fund transfer portion of the bill collects about $25 million from six pots of money at the State, the biggest of which was elimination of the $12 million Grow Iowa Value Fund, revenues remaining from the previous program. By far, the most contentious transfer (and the most talked about piece of the entire bill) was the complete elimination of the $6.135 million Iowa Cultural Trust Fund which was used to fund statewide educational programs to promote participation in, expanded support of, and local endowment building for Iowa nonprofit arts, history, and sciences and humanities organizations. If you want to know more about the Deappropriation Bill, you can review an analysis by the non-partisan Legislative Services Agency by clicking HERE.

The legislation to remove state funding to Planned Parenthood has passed the Senate and awaits House approval. It would eliminate the State's Family Planning waiver, a roughly $300,000 state expenditure that draws down about $3 million in federal matching funds.

School funding for the upcoming year has also passed the Senate and is awaiting consideration by the House this week. The Legislature is proposing to increase funding to Iowa's K-12 schools by 1.11 percent, or $40 million. The Governor had proposed a two percent increase, but legislators were unwilling to consider that amount. They argue that school funding has increased by $640 million over the last six years, while most other state agencies have seen cuts, some of them multiple cuts. Senate President Jack Whitver noted in his newsletter that "n early 56 percent of the entire state of Iowa budget is allocated to education spending." School officials have argued that anything less than a four percent increase will lead to layoffs and larger class sizes.

Those three issues have generated a lot of activity with activists on all sides at the Capitol. The building has been loaded with protestors multiple times, and legislators have been forced to continue committee work until late at night in order to continue moving those bills forward. Late night committee and floor work is typically rare early in the session.

Once those three issues are in the rear view mirror, the goals of the rest of the session will begin to come into focus. Other than the FY 2018 and 2019 budgets and changes to collective bargaining, many in the Capitol are anticipating the Legislature will take a "less is more" approach and try to save major policy initiatives until next year. There is a chance though that they could take up any number of other issues, such as water quality or tax reform, if they feel enough pressure from Iowans.

On a lighter note, legislators in the House enjoyed a brief retreat from the serious issues last week when Rep. Rob Bacon of Slater was able to get House colleagues Tom Moore and Joel Fry to collaborate on a resolution to honor Iowa's pork producers. House Resolution 3 was introduced by "Fry, Moore, Bacon" and passed on a voice vote.

Finally, on January 31, the full make-up of the General Assembly became complete when Monica Kurth won the Davenport special election, becoming the newest member of the Iowa House of Representatives. Rep. Kurth is a Democrat, so this does not change the makeup of the Iowa House (it remains 59 Republicans, 41 Democrats). Rep. Kurth is a Scott Community College educator and counselor. If you live in this district (House District 89), you can contact Rep. Kurth at her legislative email ([email protected]).

Other Issues

Alcohol task force report

As you may recall, Governor Branstad last year asked Debi Durham, Director of the Iowa Economic Development Authority, and Stephen Larson, Administrator of the Iowa Alcoholic Beverages Division, to convene a task force to conduct a comprehensive review of Iowa's alcohol laws and determine steps that could be taken to improve the business climate for industry while not undercutting Iowa's existing three-tier system.

The study group consisted of 13 stakeholders that met over five months. The produced a final report (link HERE) with recommendations, some legislative and some longer term. We will be watching in the months ahead as legislation comes forth to advance some of these recommendations.

Backfill

As the Legislature proceeded on the deappropriations bill, we had some PDI members ask about whether the bill would cut any of the property tax backfill that was promised to cities during the property tax debate a few years ago. The answer is no, the backfill was not cut. As we move into creation of the FY 2018 budget, we will be watching this to ensure the backfill is not threatened.

Tight Budget

In the weeks ahead, legislators will begin crafting the FY 2018 and 2019 budgets. For FY 2018, the House has number showing they can allocate up to $7.4555 Billion in appropriations. On the current projections, now that the FY 2017 cuts have been made, they anticipate having up to $200.9 million in new revenues. However, $84.6 million of that new revenue is already spoken for in the following five areas:

Medicaid - The Governor's budget calls for a $42 million more (to almost 1.35B next year)
The Cash Reserve Fund and the Economic Emergency Fund are, by law, to be equal to 10 percent of the General Fund budget. They anticipate needing $20.4 million to meet this requirement.
Increases in pharmaceutical costs in Iowa's prisons ($2.2 million)
Increased contribution to the Peace Officers Retirement System (to $5M, was temporarily lowered to $2.5 M last year)
Technology Funding ($17.5 M) that can no longer be paid for out of the Infrastructure Budget

When the proposed $40 million to schools is added in, this leaves $76.3 million in new revenues, less than the $88 million they would need if they wanted to restore the cuts that were just made. There will no doubt be a lot of pressure on legislators on how (or even if) they allocate those resources.

What does this mean for us?

Advocates for economic development are going to need to be showing up and making their voices heard!! Years of cuts and frozen budgets at the Iowa Economic Development Authority (IEDA) have taken their toll, and we should not stand by silently and watch the level of funding from the deappropriations bill become the level allocated for the next two years. Call or email your legislators today, and tell them to increase funding for the IEDA!

IEDA Bills

PDI is tracking the IEDA department bills and providing assistance where we can. IEDA's Legislative Liaison Jenny Klein has provided PDI members with a couple of one pagers to help explain their legislative efforts, the broad strokes of which you heard about already from Director Durham at PDI's fall conference. Their Workforce House Tax Credit Expansion Bill ( HSB 65 & SSB 1035) has a one pager available HERE. The IEDA's technical correction bill ( SF 176 & HSB 36) has a one pager available HERE.

TIF Chronicle

Good news! As of yet, nothing to report!

Tax Credit Discussion

There has been some discussion at the Capitol about looking at the tax credits on the books and making some assessments as to what is working and what is not. The discussion had begun well before the recent Des Moines Register story that claims the state loses $12.1 Billion because of tax credits (a copy of the article is HERE). We'll be watching this issue closely as it develops.

Bills Being Tracked for PDI

This is a list of the bills being tracked for PDI and their status at the time of publication. The online bill list is updated constantly, so if you wish to see the updated bill list, just go to http://www.ialobby.com/billtracker/bills.cfm?ClientID=5&NoHeader=0

Bill#

Title

Status

HF1

Executive Branch Program/Project Review