TFI Capitol Report - March 20, 2017

State Capitol Report

Issue 5 | March 20, 2017

TFI's Bill Tracker Upcoming Legislative Forums

Legislative Session Update

Monday, March 20th marks the 71st day of the 100-day legislative session and the start of the 11th week. Only about four weeks of session remain before the April 18 target adjournment date arrives (though the Legislature often goes beyond that date).

Second Funnel

The second funnel is only two weeks away (on Friday, March 31) and will be the driver behind a lot of legislative activity in the days ahead. All policy legislation must pass one chamber and make it through committee in the other chamber by that date in order to stay alive. Bills assigned to the Appropriations (spending), Ways & Means (taxing), or Oversight committees are exempt from the funnel.

Revenues Drop Again

The Revenue Estimating Conference (REC) met on Tuesday, March 14 to re-evaluate Iowa's revenues and expenditures. At that meeting, they announced that the state needs to cut another $105.9 million from current year (FY17) budget. This is on top of the $88.2 million that was already cut in the Deappropriation Bill (SF 130) passed earlier in session. That bill also held back $25.2 million in refundable business tax credits; if that had not been done, the cuts needed to balance this year's budget would have been closer to $131 million.

Legislators have decided that there is no way to cut further in the final months of the budget year, so they will dip into the economic emergency fund and borrow $105.9 million to cover the shortfall. The key word is "borrow;" legislators say they will pay the emergency fund back with next year's budget money. Here's a quick rundown of what the budget looks like for next year (FY18):

$258.5 million total new money to spend.

$105.9 million will pay back to the Economic Emergency Fund.
$40 million already spent on 1.1% school funding increase.
$42 million is needed for Medicaid.

That leaves $70.6 million left for the rest of the budget (including salary increases, increased costs of operations, and any other built-in increases).

These numbers come from the non-partisan Legislative Services Bureau - you can see their review here. Legislators may use a different set of numbers, as some will want to be more conservative in budgeting so they don't need a round of election-year cuts. Whatever numbers are used, there is simply no money for any new programs and every existing program will receive a high level of scrutiny. While the fairest way to address this shortfall is through an across the board cut, legislative leaders have been more interested in cutting out duplicative programming and "wasteful spending." Three things legislators are looking at right now are:

Eliminating tax credits so they can boost general fund revenue.
Five-year review of every budget item to look at return on investment.
Simplifying agency budgets to give more flexibility (fewer line items).

So the bottom line - no money to spend on new programs or priorities, more cuts are likely, no money to reinstate cuts made in Deappropriation Bill, and not enough money to actually cover the shortfall in Medicaid that the managed care companies say they have undertaken. When you couple this with uncertainty for many programs that rely on federal funding to the State, it means the next few weeks are going to be pretty hectic.

Bill Tracker Change

Note that the link for the Bill Tracker have been changed to make it easier for you to remember. TFI's bill list is now at http://www.ialobby.com/billtracker/tfi/

Public Forums

You can find a list of legislative and Congressional forums planned throughout the state here.

The WISE Solution to Water Quality

In the last edition, we broke down for you the three different water quality proposals. At the time, the much larger, more sustainable, and permanent solution, Representative Kaufmann's proposal, was still in drafting. Since then, the bill (HF 597) was introduced by Representative Kaufmann, along with a dozen of his House Republican caucus members. Thank you Reps. Kaufmann, Heaton, McKean, Bloomingdale, Hinson, Zumbach, Gustafson, Baxter, Rob Taylor, Wills, Jones, Koester, and Lundgren!

The "WISE (Water, Infrastructure, Soil for our Economy) Solution" would do the following:

Raise the sales tax by 1/8 cent per year over three years
Fully fund the Natural Resources and Outdoor Recreation Trust Fund
Lower income taxes for every taxpayer by the same amount as is raised through the sales tax increase
Convert the sales tax on pressurized water into a water excise tax, and create a drinking water treatment financial assistance program for installing or upgrading drinking water infrastructure and source water protection projects.
Require that at least 60 percent of the money deposited in the Natural Resources and Outdoor Recreation Trust Fund be used on research-based water quality initiatives that are part of the Iowa Nutrient Reduction Strategy, have a life expectancy of more than 24 months, and provide for multiple natural resource benefits.

You can find more about the WISE Solution HERE. TFI is registered in SUPPORT of HF 597 because this is the ONLY water quality approach that also includes quality of life initiatives that are so vital to the tourism industry.

Now is the time to weigh in with your legislators in support of the WISE Solution, HF 597. The session's timetable is starting to run short, and we need all legislators to be hearing from you. The House and the Senate both have admirable bills that would direct about $700-750 million to water quality over 12 years, but the WISE Solution is game-changing legislation that would generate $180-200 million per year and could start to move the needle on water quality. We need to act now.

Bills Being Tracked for TFI

This is a list of the bills being tracked for TFI 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/tfi/

Bill#

Title

Status

HF107

Iowa Zoo Fund