State Legislature Begins its 2008 Season
 Sharon Presnall, Senior Vice President
Iowa Bankers Association
Almost as soon as the Iowa Caucuses were over, the state Legislature convened its 2008 session and legislators will be debating issues in Des Moines for the next 100 days.
Typically, in an election year the goal is to focus less on policy issues, put together a budget, and go home to campaign. While it’s always a struggle to keep the budget in check, the good news is State General Fund Revenue year-to-date is 10.3 percent higher than fiscal year ’07. Personal income tax, bank franchise tax, cigarette & tobacco tax, and sales & use tax continue to lead the State’s revenue growth. The bad news is state spending between the fiscal year that ended June 30 last year and the current budget year will increase by an estimated $467 million according to the non-partisan Legislative Fiscal Agency. The agency projects a 2.6 percent growth in revenue but about a 9.6 percent increase – another $563 million – in expenses for the fiscal year that begins July 1. In total, state spending between July 1, 2006, and the budget cycle that begins this July will increase by more than $1 billion while revenue is estimated to increase by half that amount. With $400-$500 million in annual automatic spending increases built into the State budget, the increased revenue from Iowa taxpayers for the current fiscal year is not a luxury, it’s an absolute necessity. It also raises questions about Iowa’s fiscal situation should the economy begin to falter.
Revenue at the local level has followed a similar pattern. Average annual increases in revenue from 2002-2007 was +6.3 percent for cities and +4.5 percent for counties. The Legislative Fiscal Agency released a report last month estimating over the next six years cities and counties will receive an additional combined increase of $500 million in new property tax dollars due to increases in the taxable value of residential and agricultural property.
That’s a lot of new revenue for local governments and will hopefully put them in a good position to address issues that politicians have struggled with in the past such as commercial property tax reform. Although the policy agenda will likely be limited, legislators have been working on and have expressed a desire to address issues such as:
• Health Care – One of the key goals this session is to extend health care coverage to all uninsured children but eventually they plan to extend health insurance to the 9 percent of Iowa residents who are uninsured. (IBA monitors on behalf of Iowa Bankers Benefit Plan).
• Increased funding for Iowa’s transportation infrastructure – Time 21 proposal. A Department of Transportation study estimates that a minimum of $200 million is needed annually to fill the shortfall for city, county and state road construction projects over the next two decades. The Governor has said he will not support a gas tax increase this year so legislators will consider other ways to begin to raise some of the money (IBA supports more resources for Iowa’s transportation system).
• Financial Literacy – IBA supports a requirement to make financial literacy a core requirement for Iowa high school students. The Governor has also called for legislators to embrace a model core curriculum which IBA hopes financial literacy will be apart. There may also be discussion regarding credit card solicitation at the college level.
• Mortgage Reform – (IBA supports regular audits and basic standards of care for non-depository mortgage bankers and brokers).
• Identity theft – (IBA supports a requirement that business and public entities that maintain consumer financial data be required to notify consumers in the event of a data breach).
• Private Cause of Action giving individuals the right to sue business under the Consumer Fraud Statute –(IBA opposes).
• Immigration reform – State legislation creating civil and criminal penalties for businesses or groups, as well as their executive officers, who hire illegal immigrants is likely to be considered this year. (IBA monitors these bills for impact on financial institutions).
• Local Option Sales Tax Statewide – All of Iowa’s 99 counties have a 1 percent sales tax in place to pay for school infrastructure. There will likely be debate about whether to shift the tax to a statewide collection. (IBA has no position).
• Iowa’s Prison System. Discussion regarding a new maximum security facility in Fort Madison and updating facilities in Mitchelville and Newton will likely be discussed. Cost estimates for construction is $240 million (IBA has no position).
• Environment – A legislative committee agreed this fall to lay out a plan to cut greenhouse gas emissions in Iowa by at least 50 percent by 2050. The Governor also announced a plan to increase from 5 to 10 cents the return deposits on cans and bottles. The state would get to keep a portion of the revenue generated. (IBA has no position).
You can see that IBA will be involved in a number of discussions this session - and these are just the issues we know about. Each session, about 2,000 bills are filed along with at least as many amendments and the IBA reviews them all to determine their potential impact on the industry.
In an effort to keep you updated on key issues, the IBA Legislative Bulletin is sent each week beginning the first week of session. If you are not currently receiving an e-mail copy of the Bulletin, please contact the IBA and we will be sure you are included. The industry’s best lobby is each of you – keeping updated on the issues, establishing relationships with your elected officials and weighing in on issues that impact our industry, customers and communities.
|
