PDI POLICY PERSPECTIVES | January 21, 2017
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The 2017 Legislative Session is Underway
Who's In Charge??
January is the month when the results of the November Election come into full effect as newly elected officials take control of the federal government and the 50 state governments. In Washington DC, Republican Donald J. Trump was sworn in as the 45th President of the United States on Friday, January 20th, and was joined in power by a Republican-controlled Senate and a Republican-controlled House of Representatives. This is the first time all three have been unified under one party's control since the Democrats took control in January 2009 (2009-2010), and the first time Republicans have had unified control since 2001-2002.
 
At the State level, the November election also saw Republicans swept into power. The Iowa Senate, previously held by the Democrats 26-24 for a number of years, flipped to the Republicans by a wide 29-20 margin (+1 independent). In the House, Republicans were able to add two more to their margin and now control the chamber by 59-41. Republican Governor Terry Branstad is in the middle of his term, so he was not the 2016 ballot.
 
Change at Terrace Hill Coming
Speaking of Governor Branstad, while his name was not on the 2016 ballot, the election will still have a profound effect on him, far beyond delivering the Iowa Legislature to his party's control. Trump has announced that he will be appointing Branstad as the U.S. Ambassador to China, not surprising given that Branstad has a long-standing friendship with the leader of China that dates back to his first go-around as Governor of Iowa in the 1980s. The timing of Branstad's departure, which will establish Lt. Governor Kim Reynolds as Iowa's first female Governor, is an issue you will hear speculation about throughout the Legislative Session. And with that...
 
The Legislature Convenes
Monday, January 9, marked the first day of the First Session of the 87th Iowa General Assembly, a scheduled 110-day session. The 110th day of session, when per diems to legislators expire, is April 28th, 2017. Typically, the Legislature goes beyond the last day, but this year's new power alignment may change that. This Legislature consists of 23 new members and one still to come on January 31st in House District 89 in Davenport.
 
A Couple links to help you engage
Who is your legislator? - Click HERE
Upcoming Legislative Forums - Click HERE
 
Budget Woes
Much to their chagrin, the first major order of business for the new 2017 Legislature will be to introduce and enact a "deappropriations" bill to cut somewhere near $120 million from the current fiscal year (2017) which ends on June 30th. They need to do this because revenue projections made in the December show that revenues into the State will fall far below earlier expectations, thanks in large part to trouble in the agricultural sector of the economy caused by lower commodity prices.  
 
The Governor did make recommendations for the cuts in his Condition of the State address, but he needs the Legislature to take action on legislation. The Governor's recommended cuts included about $30 million in fund transfers, $25 million for Regents, and a number of other cuts, including a reduction of roughly 4.25% in the administrative budget for most agencies in state government. Most of those 4.25% reductions would be continued into the next two full fiscal years (FY 2018 and FY 2019).
 
Since the Governor's speech on Tuesday, January 10th, the House and Senate have been working behind the scenes on their own deappropriation bill. By the time you read this, the bill may have just come out, but it is expected by the middle of the next week, at the latest.
 
Some other issues the Legislature will take up soon:
 
School Funding
As soon the deappropriation bill is finished, expect to see legislators push school funding legislation to the front burner. They have had to wait while they see how much the deappropriation bills leaves on the table, but they want to pass it quickly. The Governor has recommended two percent allowable growth, but the House and Senate may recommend less than that.
 
Planned Parenthood
The House, Senate and Governor plan to end the roughly $300,000 in state funding that goes toward Planned Parenthood. Since these funds leverage about $3 million in federal matching funds, they need to find funds elsewhere to cover this gap.
 
Collective Bargaining
Governor Branstad and the House and Senate will push to change Iowa's collective bargaining laws to give the State more ability to control costs, particularly with health care. During his Condition of the State speech, the Governor cited numbers from the Legislative Services Agency that showed between 2005 and 2015 that health insurance costs for state employees soared from $143.2 million to $235.7 million, an increase of $92.5 million, or 64.6 percent. This promises to be a contentious debate at the Statehouse.
 
As the session plays out, there are a number of other issues that will enter discussion, including tax reform, water quality, Medicaid oversight and many others.
Please Attend
PDI Grow Iowa Day at the Capitol 2017
Wednesday, February 8, 2017
10:30 a.m. - 2:30 p.m.
(Exhibitors set up at 9:30 a.m.)
State Capitol, Des Moines, IA
IEDA Budget

While the Governor's Budget proposal includes about a 4.25% cut for most state departments, the cut for IEDA comes on top of a $400,000 cut the department received for the current fiscal year during last year's legislative budget process.  The new cut of $631,180 would push their combined FY2017 reduction to $1.03 million for this year.  This is on top of not receiving increases to cover salaries for many years or any new funding to take on new projects such as Home Base Iowa. 

We should know more as legislators get ready to propose their own cuts to balance the budget.  However, please keep these figures in mind when you are talking to legislators. 


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
Summary | Details
House State Government Committee

Establishes an ongoing system of review and ongoing repeal dates for Executive Branch programs and projects.
HSB9
Primary Road Fund
Summary | Details
House Transportation Committee

Allows the state transportation commission to periodically allocate funds from the Primary Road Fund (PRF) to the secondary and municipal road systems in exchange for retaining all or a portion of federal aid road funds that would otherwise be allocated to counties and cities.
SF1
Jobs Impact Statements
Summary | Details
Senate Commerce Committee

Requires that every proposed rule under a notice of intended action or publication without notice contain a jobs impact statement outlining the purpose and statutory authority of the rule and analyzes and sets out in detail the impact of the proposed rule on state agencies, local governments, the public, and the regulated entities, including regulated businesses and self-employed individuals affected by the rule.
SF103
Inheritance Tax Repeal
Summary | Details
Senate Ways & Means Committee

Repeals the state inheritance tax and the state qualified use inheritance tax effective July 1, 2017.
SF104
High Quality Jobs Criteria
Summary | Details
Senate Ways & Means Committee

Alters the high quality jobs criteria to no longer allow projects that only have capital investment, but no new job creation. 
SF110
Water Quality and Soil Conservation Assessment
Summary | Details
Senate Agriculture Committee

Requires commodity organizations to establish a separate state assessment for water quality and soil conservation, if approved by a majority of its members at a referendum.
SF14
Sales Tax Increase
Summary | Details
Senate Ways & Means Committee

Increases state sales tax rate from 6 percent to 6.375 percent and provides for the transfer of sales tax revenues to the natural resources and outdoor recreation trust fund.
SF16
Wind Energy Conversion Property Tax Division and Allocation
Summary | Details
Senate Ways & Means Committee

Requires property taxes collected from wind energy conversion property located in an urban renewal area be allocated to and, when collected, paid into the funds for the respective taxing districts in the same manner as all other property taxes.
SF17
Property Taxes from Wind Energy Conversion
Summary | Details
Senate Ways & Means Committee

Requires property taxes collected from wind energy conversion property located in an urban renewal area be allocated to and, when collected, paid into the funds for the respective taxing districts in the same manner as all other property taxes.
SF38
Individual Income & State Sales and Use Taxes
Summary | Details
Senate Ways & Means Committee

Repeals the individual income tax and increases the state sales and use tax rates.
SF82
Inheritance Tax
Summary | Details
Senate Ways & Means Committee

Reduces the state inheritance tax rate over a nine-year period with the tax repealed effective July 1, 2027.
SJR1
State Spending Limit/Constitutional Amendment
Summary | Details
Senate Appropriations Committee

Proposes an amendment to the Iowa Constitution that limits state spending to 99% of revenue estimates, or 104% of the revenue estimates for the current fiscal year (whichever is greater).
SSB1015
IEDA Technical Corrections
Summary | Details


Makes technical corrections to IEDA programs and projects.
SSB1018
Governor's FY17 Deappropriation/Reappropriation Bill
Summary | Details


Appropriations changes for fiscal year 2016-2017.

Your Legislative Team
The Advocacy Cooperative | Campbell/Patterson Consulting LLP, PO Box 1403, Des Moines, IA 50131
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