Budget Bills Awaiting Governor’s Action – Will He Veto Excessive Spending?

All the budget bills have been enrolled and sent to the Governor. The Code gives the Governor 30 days to take action on the bills he receives after the session is completed, meaning that he has until May 30 to sign, veto or sign with item veto all of the bills sent to him since April 29.

At the end of session, the Governor and his budget advisors began to sound the alarm about the excessive spending by the Democrats in the Legislature. Granted, Governor Culver shares blame because of the enormous increase in spending he requested but Legislative Democrats went even further in excessive and built-in spending increases in future years.

The Governor insisted that the Democrats cut $10 million out of the general fund increase and transfer another $3 million from the Rebuild Iowa Infrastructure Fund (RIIF) to cover general fund expenditures. This $13 million would then go to fund a portion of the property tax credits out of the general fund rather than the ending balance.

According to one news account of the situation, “Governor Chet Culver told the House and Senate leadership to cut $25 million from their proposed spending in the appropriations bills. He was feeling pressure from the Republican

House Republican NewsletterMay 21, 2007

Appropriations

Inside This Issue:

Appropriations Bills Status 1General Fund Below Revenue Estimate 2Motor Fuel Excise Tax Matrix 2D’s Shift Operations to EEF 3Small Business Health Care in Danger? 5Power Fund Recap 6Money is Center Stage in Education 7Medicaid Increase Left Behind 8Labor Bills Signed 10Ban on Renting to Illegals 11Furbearers Seasons 12Public Safety Bills Signed 13Elections and Gambling in State Govt. 14The Good, the Bad and the Pork 17Democrats Mismanage Vets Funding 20Tax Changes in 2007 – EITC Worries 22House Republican Talking Points 25

attacks on their spending, and the Legislative Services Agency verified that anticipated revenues would not cover the new spending.”

Apparently the weeks of vigilant oversight of the spending increases by Minority Leader Rants, Appropriations Committee Ranking Member Raecker and other Republican members finally sunk in. Not only was the Governor concerned about it but so were other members of the majority party.

On May 11, the Des Moines Register had the following item about the Governor’s proposed action on the budget bills:

Gov. Chet Culver could be using his veto pen on at least a few of the 100 or so bills awaiting a decision from him. The Democratic governor has until May 30 to sign or veto bills approved by the Democrat-controlled Legislature.

"There are a handful of bills that are somewhat controversial, and we'll have to make some tough decisions in the next couple of weeks on whether we'll sign or veto them." Culver said Thursday. “There's a good possibility we'll have to do some additional trimming" on budget bills using his item-veto power, as well, Culver said.

One of the problems the Governor faces is most line items are lump-sum amounts. For instance, he cannot item veto the $25 million increase to the Regents and replace it with a $20 million increase. However, there are several smaller line item amounts in the budget bills, primarily in the Education budget bill and the Standing Appropriations bill, that could end up getting the knife.

House Republicans will continue to monitor the Governor’s action to see if he does eliminate excessive spending by the Democrats.

General Fund Revenue Below the REC Estimate

On May 4, Fiscal Services released the general fund revenue numbers for the first ten months of FY 07. For the first time in several months, actual revenue was less than the estimate set by the Revenue Estimating Conference (REC).

Through April, year-to-date receipts grew by $244 million, or 5.4 percent compared to actual FY 06. This is below the April 6th REC estimate of $338 million, or 5.9 percent above FY 06. All major sources of general fund revenue increased when compared to FY 06 but sales and use tax receipts continue to lag.

Personal income tax was up $115 million (5 percent), corporate income tax was up $88 million (38 percent), other taxes were up $16.2 million (6.7 percent) and other receipts were up $20 million (7 percent). However, sales and use taxes were up a mere $5.3 million, or 0.4 percent over FY 06.

Since the REC adjusted the revenue estimate up slightly in April, it is not too surprising that revenue did not exceed the estimate. However, the Democratic leadership is counting on the REC estimate being exceeded in both FY 07 and FY 08. If revenue does not exceed the estimate, it will create a huge gap between revenue and built-in spending in FY 09.

In addition, the small increase in sales and use taxes is troubling. At its April 6 th meeting, the REC lowered the projection for sales and use taxes from 2.7 percent to 1.3 percent. Despite this move, sales and use was still below the estimate by nearly a full percentage point. Since roughly one-third of general fund revenue is derived from sales and use taxes, this could be a sign that the economy is slowing down.

The good news is that corporate income tax revenue continues to exceed all expectations. Since the corporate income tax is based on corporate profit, it is obvious that Iowa’s companies are extremely profitable at this point. Corporate income tax revenue has shown strong growth since February 2003.

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Year-to-date cigarette tax revenue increased by $7.4 million, or 60 percent compared to April, 2006. Since the tax was increased by 277 percent, even with a 20 percent reduction in sales the growth (the estimate used by Fiscal Services), the revenue should have been three times what actually was brought in.

Despite revenue continuing to increase at a strong rate, there are several warning signs on the horizon and those in charge of the budget would be wise to exercise caution in regards to revenue exceeding the REC estimate.

(Contact: Lon Anderson, 1-5184)

Measure Extends Differential Motor Fuel Excise Tax Matrix

Senate File 601 was the Standing Appropriations measure which included a number of substantive provisions that were also stand-alone legislation. One of the components of SF 601 were provisions in the bill (sections 113, and 114) that if enacted will extend the current differential motor fuel excise tax matrix scheduled to sunset on June 30, 2007 that varies the excise tax for ethanol blended fuels and conventional gasoline according to the proportion of each type of fuel by additional five-years. This language is identical to legislation (HF 855 which became HF 919) that was amended and passed by the House Ways & Means Committee on April 19, 2007 which reduced the matrix extension from 5-years to 1-year and was not considered by the House prior to adjournment.

The fiscal impact of SF 601 on the Road Use Tax fund was estimated by the legislative Services Agency/Fiscal Services Division was a reduction in potential increase of tax funds of $25.1-million over the next five years compared to if the motor-fuel matrix was allowed to expire as schedule at the end of this current fiscal year. Another hit to future collections of the road use tax fund occurs with another provision of SF 601 (sections 6) that transfers $3-million from the underground storage tank fund to the General Fund. This siphoning of moneys that could go to road repair and maintenance occurs because the underground storage tank fund is funded in part with a portion of motor vehicle use tax as specified in Iowa Code 423.43 (up to $4.25-million per year) and through diversion of these funds, extends the time frame for the state underground storage tank program.

SF 601 further included an aspect that proposes to prohibit the reproduction and future ownership of a certain swine breed referred to as either European Boar, or Russian Boar (sections 118, 120, 122, and 123) by classifying them as ‘dangerous wild animal” and regulating them under provisions of pending legislation SF 564. The argued intent of this aspect of SF 601 is to reduce the likelihood that swine of this breed, which have been historically wild and not domesticated, could escape from Iowa farms where they might be kept and hence contribute to the growing problem of feral swine which pose a significant health risk not only to domesticated swine, but also to humans. Feral swine can carry and transmit some dangerous and communicable diseases such as brucellosis, psuedorabies.

A major shortcoming of this legislation compared to the stand-alone bill HF 929 that wasn’t debated is that it doesn’t address the major problem of feral hogs that aren’t derived from the proscribed breed. HF 929 did have provisions to prohibit the importation into Iowa and release of feral swine of all breeds and all subspecies. Implementation of rules derived from SF 601 pertinent to classifying Russian and European Boars as dangerous wild animals is apt to be complicated by the difficulty that some legitimate purebred swine breeds contain substantial genetic material from these proscribed breeds that as recently as the 19th century were intentionally crossed with the wild boars to improve outside survivability of hogs. In addition, some long term hog farms may still contain swine descended from stock that were originally pasture farrowed and fattened in oak tree stands and because of this semi-wild existence may have some relatively recent wild genotype in their genetics. Furthermore, there are some hogs that are originally descended from domestic swine that have the appearance of wild boars, but are descended from so-called throw-back offspring that occasionally appear in swine litter that have been intentionally selected and reproduced for this appearance.

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During consideration of SF 601, considerable displeasure was expressed by members of both parties in the House over the short-comings the provisions in SF 601, and the inability to debate the issue as a separate matter. The amendment (H-2143) that struck the portion of an amendment (H-2139) offered by the House Appropriation Committee chair that would have struck the wild boar provisions was adopted on a non-record vote of 50-aye to 42-nay.

Several other new statutory provisions dealing with agriculture were also aspects of SF 601. Section 89 of the bill moves controlling authority over the Iowa Agricultural Development Authority from the State Treasurers office to the Governor’s auspices. The Governor will now appoint the executive director who will serve at the pleasure of the Governor subject to Senate confirmation. Sections 93 through 96 create a new farm to school nutrition program designed to facilitate the delivery of Iowa grown fresh produce into school meals. The farm-to-school program is funded with $80,000 from the environment first fund via provisions of the conference committee report to SF 551. SF 601 in section 97 authorizes a new laboratory for motor fuels and biofuels at a merged area school that is engaged in biofuels testing (Fort Dodge Community College). Section 126 relieves the wine gallonage tax liability for wine imported into the state before June 1, 2007, for manufacturing of domestic wine.

Legislative Democrats Shift additional IDALS, DNR General Fund Operations to EFF

On Monday, April 23, 2007, the House considered, amended, and passed Senate File 551, the Fiscal Year 2008 Iowa Department of Agriculture and Land Stewardship, Department of Natural Resources, and Environment First Fund Appropriations measure by a largely partisan 63-aye to 32-nay vote. SF 551 funds Iowa Department of Agriculture and Land Stewardship (IDALS); the Department of Natural Resources (DNR) and appropriates IDALS and DNR Environment First funds for fiscal year 2008. The measure as passed proposes general fund appropriation of $41,559,167 is $1.483-million (+3.7%) above the level recommended by the Governor and an increase 4.9% above current general funding levels. The bill also is $5-million above the Governor’s mark for other funds, principally because the bill increases the amount being appropriated from the Environment First Fund (EFF) by an additional $5-million above the statutory $35-million specified in Iowa Code 8.57A.4 for a total EFF allocation of $40-million. The bill essentially funds the Governor’s general fund recommendation and provides for an additional $1,483,000 which is split by the panel to provide an additional $1-million for further expansion of funding for the Iowa State University Veterinarian Diagnostic laboratory; $50,000 for Emerald Ash Borer split evenly between IDALS & DNR; $100,000 to DNR for Honey Creek Rangers; $283,000 for the Grape & Wine development fund and $54,671 for an organic specialist with a small offset being an elimination of funding for the Missouri River Authority state dues.

The House passed SF 551 with an amendment that included non-funding Code changes that: restrict qualification to the Iowa Dog Breeder fund to those operations that are state licensed modify the water quality and watershed improvement program to expand the eligibility for such funding to

include public water supply utilities, conservation boards and cities accelerate the date a report from the watershed quality planning task force is due by six months from June 30,

2008 to January 1, 2008.

The Senate then amended the House amendment by adding some new appropriations and reducing some existing appropriations from the Environment First fund. The Senate added funding and a position to support a state apiarists ($40,000), added funding ($80,000) to support a farm-to-school nutrition program. The Senate offset these new EFF appropriations by decreasing the funding for the alternative drainage for ag wells by $20,000; decreasing the loess hill allocation by $20,000 with distribution of this reduction allocated with $13, 333 coming from the hungry canyons operations and $6,667 from the loess hills alliance account; reducing the EFF appropriation for state parks by $20,000; reducing the EFF appropriations for expanded open feedlot and confinement animal regulation by $40,000; and reducing the EFF appropriation for public water supply operations by $20,000.

The Senate also included new language dealing with E-85 fuel storage and dispensing infrastructure requirement to ease existing regulations that require compatible thread sealants or adhesive for E-85 systems is they are inspected daily. The House resisted the Senate amendment, largely because of this E-85 language because it was determined that it might imperil the federal delegation of underground storage tank regulation to the state and because it could nullify existing insurance for Iowa motor fuel dealers if they utilized this regulatory exemption. The bill went to conference committee in which the E-85 language was reconfigured to remove the language that would have eased compatibility

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requirements and in its place new language that allowed service stations that had previously upgraded some dispensers to delivery E-85 fuels, to reapply for a supplemental financial incentive to specifically address thread sealant compatibility problems if the prior work was installed no later than 60-days after the state fire-marshal order that a commercially available dispenser is compatible with E-85 has been published in the administrative rules bulletin. The House considered and adopted the Conference Committee report on April 27, 2007, by a voice vote and then passed the bill as amended by a somewhat partisan 70-aye to 26-nay vote.

While the net increase of general fund appropriations (+4.9%) for this budget bill was only about one-half the increase of the state budget as a whole, the bill shifted the funding source for a number of operations that normally would be funded with general fund monies to EFF. In addition to the new initiatives added by the Senate during their consideration of the House amendment, the bill increased the amount of state park operations funded with EFF from $2-million to $2.47-million, funded expanded livestock regulatory efforts with an additional $360,000 of EFF monies, The bill also shifts funding for the Resource Conservation & Development from federal funds to the EFF at the $300,000 amount and provides additional funding for water withdrawal and use regulation by adding $500,000 of EFF funds in addition to ongoing funding from user fees and unspecified general funds. SF 551 additionally appropriates $150,000 of EFF funds for a flood prevention study. Had these operations been funded with general fund monies it would have brought the net increase to over 10%.

(Contact: Lew Olson, 1-3096)

Health Coverage Help for Iowa Small Businesses Short Lived?

One of the few bright spots for Iowa businesses was the enactment of legislation allowing small employers to band together to get better health insurance rates. House File 790 allowed business organizations to establish association health plans within Iowa’s small group insurance framework. Small businesses will be able to band together to reduce risk and premium rates for healthcare coverage for their employees.

House File 790 also allows insurance companies to reward low-claim employers by moving them to a less-expensive class of business. The bill allows insurers to also pass on savings to employers for participation in wellness activities. Members of both parties said this was a solid first step in addressing the issue of health care costs for small businesses.

Unfortunately, the benefits of this major step could have been all be wiped out if House Democrats had gotten their way by enacting a series of new insurance mandates .

The biggest of the mandate bills is House File 769, which implements full blown parity for mental health and substance abuse treatment. The House Human Resources Committee approved this bill on a 13-7. Current law requires Iowa-regulated insurance plans to provide unlimited coverage for biologically-based mental illnesses. House File 769 goes way beyond that by requiring the same plans to cover all mental conditions without limitation and to begin covering substance abuse treatment. Estimates across the country of the impact of such a change would be anywhere from 1 to 5 percent increase in healthcare premiums for the affected plans.

House File 789 and House 791 were mandate bills proposed by the Commerce Committee. House File 789 required Iowa-regulated plans to cover entreal formulas for Iowans with PKU, audiogical services and the vaccine for the human papilloma virus. The combined impact of these new mandates was close to $100 per year per enrollee. That was evidentally unimportant to the Democrat members of the Commerce Committee as they passed the bill out on a vote of 13-8.

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House File 791 required state-regulated plans to cover prosthetic services. This also would have resulted in an increase in annual premiums. The Commerce Committee approved mandating higher rates on a vote of 16-4.

Who would be affected by these mandates? The very people helped by House File 790. Since the federal ERISA law pre-empts state action on most health plans in Iowa, the only plans that would face these restrictions would be the small group coverage regulated by the Iowa Insurance Commissioner. So while they promised to help lower rates by allowing association health plans, House Democrats worked to take away any savings by implementing these new mandates.

Only after hard work by House Republicans and the insurance lobby were these bills put down for the year. But they remain alive for debate in the next session, leaving many Iowa small businessmen and women to wonder if Democrats are really serious about helping to provide affordable healthcare.

(Contact: Brad Trow, 1-3471)

Power Fund Recap

Renewable energy seems to be a hot spot for the media, so a recap of the Iowa Power Fund and the recently created Office of Energy Independence is in order. The Governor will appoint a Director of the office whose administrative duties include directing the Iowa Power Fund and establishing the Iowa Energy Independence Plan. The Iowa Energy Independence Plan shall provide cost-effective options for reducing the states consumption of energy, dependence, use of fossil fuels and greenhouse gas emissions to achieve energy independence by 2025.

The bill also establishes two boards: The Iowa Power Fund Board and the Due Diligence Board. Each board is made up of members from state agencies, including the departments of Economic Development, Agriculture and Natural Resources as well as appointed members by the governor. The boards will also include ex officio members from the General Assembly and Iowa private and public colleges and community colleges and oversee the disbursement of the funds.

The fund shall receive $25 million for each fiscal year beginning July 1, 2008 through June 30, 2011. The Fund shall also receive $24,670,000 for FY 07 to get the program going. The appropriation skips FY 08. The funds purpose is to further the goals of increasing production, development and use of biofuels and other sources of renewable energy, improve energy efficiency and reduce greenhouse gas emission and shall encourage, support and provide for research, development, commercialization and the implementation of energy technologies and practice

Lastly the bill requires the Iowa Utilities board to work in cooperation in conducting a study of energy efficiency plans offered by all utilities to determine the status and effectiveness of energy efficiency programs in the state.  It also requires that all electric and gas public utilities shall offer energy efficiency programs to their customers through efficient plans that are cost effective.

The vote on the appropriation (HF 927) for the Iowa Power fund was 60-37 with 50 Democrats and 10 GOPers voting AYE and 36 GOPers and 1 Democrat voting NAY. The following GOPers voted FOR the bill: Anderson, Granzow, Greiner, Heaton, Hoffman, May, Pettengill, Schickel, Tomenga and Wiencek. The balance of the Republican caucus voted NAY except for one who was absent.

The vote on the policy language (HF 918) for the Iowa Power fund was 88-10, with Alons, Chambers, De Boef, Forestall, Sands, Soderberg, Tymenson, Van Fossen, Watts and Windschitl voting AGAINST the bill. 36 GOPers voted for the bill with one GOPer absent.

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Infrastructure Board Announces Awards to Expand Access to Biodiesel and E-85 in Iowa

Ten Iowa Retailers to Accelerate Distribution of Renewable FuelsThe Renewable Fuels Infrastructure Board (RFIB) has awarded $320,700 to ten Iowa retailers installing pumps for E-85 ethanol and biodiesel fuel, terminals installing biodiesel blending equipment and tank wagons for farm delivery having dedicated compartments for E-85 and biodiesel.

The 10 projects approved at the RFIB meeting (Apr. 27th) are as follows: Company LocationDahl’s Fuel Des MoinesDiamond Oil Des MoinesKiracofe Oil Co. SwisherSexton Oil Co. DanburyLooft’s on #9 Swea CityMulgrew Oil Company DubuqueW&H Co-op Oil Co. ClareNew Horizon FS Inc. DelmarSTAR Energy Sac CitySTAR Energy Gowrie

The RFIB awards assist the installation of two E-85 fueling sites, one biodiesel fueling site, three biodiesel terminals and four partitioned tank wagons.

Over a three year period, $13 million in financial incentives will be allocated by the RFIB to expand consumer access to renewable fuels. So far, more than $1.6 million has been awarded. Owners or operators of retail motor fuel sites or biodiesel terminals submit applications for the awards to the Iowa Department of Economic Development (IDED). The RFIB will meet to consider applications again on May 24, 2007. To be considered during the next meeting, award applications must have been received by IDED by May 14. Contact the Iowa Department of Economic Development 515-242-4895 for more details.

(Contact: Kristin Gray, 1-3026)

Money Takes Center Stage in Education

Money, lots of it, and how to spend it was the Democrat’s REAL 2007 Education agenda. The five key spending bills are:

Bill #1: SF 109 Allowable Growth for FY09 passed 99-0 on February 13, 2007. This bill sets allowable growth at 4% in FY 09, which means nearly $100 million in NEW state aid and a $30 million property tax increase. This is an FY 09 increase of $213 per student for a total state cost per student of $5,546

The 2006 Legislature set allowable growth for FY 08 at 4%. From FY 07 to FY 08 the increase is a $205 per student increase for a total state cost per student of $5,333

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Remember that House Republicans offered amendments to have the state pick up the cost of the $30 million property tax but Democrats ruled the amendment not germane. Motions to suspend the rules failed on a mostly party line vote which means instead of allowing a vote to let the state pick up the cost, Democrats would rather the property taxpayers foot the bill.

Bill #2: SF 447 Reorganization incentives and New Administrative Sharing Incentives passed 82-16 on April 24, 2007. The Governor signed this bill last week. The bill:

1. Reinstates reorganization incentives that expired July 1, 2006. This includes supplementary weighting for two years before and two years after reorganization. Incentive when district over 600 students reorganized with district fewer than 600 students. $1 million fiscal impact in FY09

2. Creates new shared administrative services weighting. District shares with other political subdivision and gets a weighting equal to a minimum of 10 students and maximum of 40 students. $6 to 32 million state aid increase and a $1 to $ 4 million property tax increase in FY09

Again, House Republicans offered amendments to get rid of the property tax increase. Again, those amendments failed on mostly party line votes.

The Democrats’ Education Appropriation target is $140 million or 14% above the current FY07 spending level. They accomplished that “goal” in next three bills:

Bill #3: You saw $70 million of that increase in the Teacher Quality bill, SF 277. SF 277, the Teacher Quality bill, doubles the 2006 commitment for new money. The House voted 93-3 on final passage of the legislation on April 25, 2007. The Governor signed this bill without veto.

FY07 increase FY08 increase FY09 increase2006 Session -  Teacher Quality $35 million $70 million $105 million

SF 277- 2007 Legislation -  Teacher Quality $35 million $105 million $140 million

Bill #4: SF 588, the Education Appropriations bill, furthers the Democrats Education Appropriation spending spree by appropriations another NEW $68 million. The bill appropriates $960 million to 12 education-related entities for FY08. SF 588 contains the $15 million down payment for eventual $105 million preschool program.

This bill passed the House on April 28, 2007 by a vote of 54-40. Governor Culver has yet to take action on this bill. SF 588 includes:

15 new line items cost $48 million including $15 million as the first down payment for the eventual $105 million preschool program and $25 million for the Regents general operations.

20 existing line items receive increases totaling $20 million. 3 line items are eliminated totaling $5.3 million.

o $5 million promised by the 2006 legislature to Community Empowerment in FY08 and FY09. The purpose of the funds was to expand the initiatives developed by the Empowerment’s Business Community Investment Council. The funding was to leverage private business dollars for preschool.

o $44,000 for a Vilsack requested parent liaison pilot project. o $250,000 for a 2006 Senate Republican reading Instruction pilot grant initiative.

3 bills that did not make it through the process – HF 804 (model core curriculum), HF 714 (ICN weighting) and SF 81 (2005 Senate freshman bill on student advancement)

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Bill #5: SF 601, the Standings bill, includes the remaining $2 million of the Democrats target by restoring $750,000 to the AEAs and $1.3 million to restore the appropriation to the Child Development Coordinating Council. SF 601 also contained $20 million for Regents salaries.

The Standing bill, which contains many other non-education appropriations, passed the House on April 28, 2007 by a 52-40 vote.

(Contact: Ann McCarthy, 1-3015)

Promises Made, Promises Broken – The Medicaid Rate Inrease That NEVER Happened

During the 2006 campaign and the early parts of the 2007 session, legislative Democrats promised many healthcare groups that if they supported increasing Iowa’s tobacco tax, Medicaid reimbursement rates would be increased. In visiting with a number of the provider groups, it is clear that a quid pro quo was developed between them and Democrat leadership over the cigarette tax increase. In exchange for helping Democrats raise the tax, their Medicaid rates would be hiked.

Once the tax was enacted in March and the new revenue started to trickle in, Iowa health care providers expected that Democrats would keep their word by including a rate increase in their Health and Human Services budget proposal. As everyone knows, they didn’t. Instead of raising rates, the majority actually cut the General Fund money for Medicaid and HAWK-I and used the new revenue to cover regular program expenses.

Now that the session is over, legislative Democrats are hoping that providers and Iowans of all walks of life will forget about their broken promise to the state’s healthcare community. That’s not likely.

During the 81st General Assembly - while Republicans controlled the House - raising reimbursement rates was a top healthcare priority. Each year a three percent increase was proposed by the House Republicans and enacted into law. This was done without increasing a tax. If it could be done without additional revenue, how could they not go up after the $1 a pack increase?

Democrats never could answer that simple question. They tried to avoid the issue by saying that there was no guarantee that reimbursement rates would go up every year. Some wondered aloud at the time if the same logic would apply for teacher salaries.

House Democrats had several opportunities to keep their promise, but each time they reneged. When the House debated the cigarette tax increase, an amendment was offered to earmark a portion of the new revenue for rate increases. Democrats voted that idea down, saying they hoped to provide an increase when the Human Service budget came to the floor.

Just a couple of weeks later, when that budget proposal was released there was no Medicaid rate increase included. On April 20, House Democrats were faced with the choice – do they keep their word to the people who helped them generate all this new money or go back on their promise? When the vote was cast on amendment H-1865, 48 members of the House said yes to provider increases and 50 members said no they did not have to keep their word.

So where did all the new tobacco revenue go? Democrats will be more than happy to tell anyone who will listen that they spent the new money on healthcare. They did not. Nearly $100 million of the $128 million projected to come in will be used to backfill general fund appropriations or replace annual general fund increases so that money could be

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spent elsewhere in the budget. Very little ended up going for new healthcare expenditures. So the Democrats’ arguments are just semantics.

The question many Iowans are now asking House Democrats is where did the $100 million go? They will probably be waiting a long time for an answer.

(Contact: Brad Trow, 1-3471)

Iowa Judicial Branch Seeks Proposals from Vendors for Electronic Document Management System

The Iowa Judicial Branch is seeking a vendor to design and build an electronic document management (EDMS) system for Iowa's state courts. The state court administrator will select the project vendor on July 18, 2007.  Once the design and development phase of this system is complete, it will be tested in two counties yet to be selected. The State Court Administrator will announce the two pilot counties May 30, 2007. Once the testing is complete, the system will first be expanded to the appellate courts and then further expanded to include all district courts in five years. The statewide system will cost about $19 million according to court officials estimates.  EDMS will enable people to file their court documents electronically and to access court records on the internet at any time. It will allow immediate access to court documents, enable a person to use a simple word search to find documents and allow multiple users to view a court document simultaneously. EDMS will increase court efficiency and reduce the future need for file storage space. Court rules will govern procedures for electronic filing and access. The Iowa Supreme Court is was seeking public comment to such rules up until May 1, 2007. The proposed rules and a general explanation of the proposed rules can be found at: http://www.judicial.state.ia.us/wfdata/frame4158-1022/File9.pdf

(Contact: Kristin Gray, 1-3026)

Labor Bills Signed into Law

Minimum Wage Increase – House File 1House File 1 increased the state minimum hourly wage in a two-part jump.

The state minimum wage increased to $6.20 on April 1, 2007. Then, on January 1, 2008, the minimum wage will jump to $7.25. House File 1 also increased the training wage to $5.30 on April 1, 2007 and $6.35 on January 1, 2008.

House File 1 was approved by the House on January 23, 2007 by a 79-19 vote and signed by the Governor on January 25, 2007

Unannounced Drug Testing Clean-up – Senate File 284Senate File 284 provides that employees not subject to testing pursuant to a collective bargaining agreement are excluded from the pools of employees from which a random drug or alcohol test may be conducted

Senate File 284 was approved by the House on April 4, 2007 by a 97-0 vote and signed by the Governor on April 10, 2007.

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Boiler and Pressure Safety Program – House File 368House File 368 cleans up language in the boiler inspections chapter of the Iowa Code.  The language in this bill makes the boiler inspection language consistent with language in the building code. 

This bill requires the Boiler and Pressure Vessel Board to adopt rules to set fees – this action removes a conflict in the current Code.  Under current law both the Labor Commissioner and the Boiler and Pressure Vessel Board set the fees. House File 368 codifies the current practice of the Boiler and Pressure Vessel Board.

House File 368 was approved by House for the second time on April 17, 2007 by a 99-0 vote and signed by the Governor on May 2, 2007.

Direct Deposit Overdraft Charges – House File 367House File 367 allows overdraft charges to be the basis for a wage claim by an employee if the employer is liable for the charges due to failure to credit the employee's account with direct deposit wages on or by the regular payday.

House File 367 was approved by the House on February 20, 2007 by a 99-0 vote and signed by the Governor on March 28, 2007.

Elevator Safety Standards – House File 369 House File 369 provides clarification that the elevator law shall superseded any conflicting provisions within the building code.  This bill also provides significant clean-up within the elevator code for language consistency.

House File 369 also provides that in instances where continued operation of an elevator (conveyance) constitutes imminent danger which could result in serious injury or death, in addition to applying for an injunction in district court, the Labor Commissioner my use other methods of enforcement so that imminently dangerous conditions can be controlled.

Additionally House File 369 requires in the Annual Report prepared by the Labor Commissioner to include any instances where the Labor Commissioner need to use other methods to control conditions of imminently dangerous elevators (conveyances) before an injunction was granted.

House File 369 was approved by the House on February 21, 2007 by a 99-0 vote and signed by the Governor on March 14, 2007.

Regulation of Firefighter Clothing – Senate File 116 Senate File 116 strikes the requirement of the Labor Commissioner to adopt rules concerning fire fighter clothing and personal protection equipment. The state has adopted other occupational safety and health standards (OSHA) that make these rules no longer necessary.

Senate File 116 was approved by the House on March 27, 2007 by a 98-0 vote and was signed by the Governor on April 4, 2007.

Asbestos Removal Standards – Senate File 265Senate File 265 redefines an asbestos project as an asbestos removal or encapsulation activity that affects a building or structure, and includes removing materials containing asbestos from the site of a demolition or collapse. The bill further defines an asbestos project as including the preparation of the site through the transportation of the asbestos-containing materials from the site. Senate File 265 allows a state agency or political subdivision to accept a bid for an asbestos project if the business entity making the bid contracts to have the work done by a licensed asbestos contractor.

Senate File 265 was approved by the House on April 10, 2007 by 96-0 vote and was signed by the Governor on May 9, 2007.

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Confidential Information on Unemployment Benefits – Senate File 448 Senate File 448 brings Iowa's unemployment insurance laws into compliance with new federal laws regarding confidential information. The bill expands confidential information to include unemployment insurance information received from other states. The bill also expands who can be held criminally responsible for revealing confidential information to include public officials, their agents and contractors, and third parties.

Senate File 448 was approved by the House on April 10, 2007 by a 95-0 vote and was signed by the Governor on April 17, 2007.

(Contact: Mary Earnhardt, 1-3298)

Voters in Dallas Suburb Approve Ban on Renting to Illegal Immigrants.

Over 2/3 of the voters in Farmers Branch, Texas went to the polls last Saturday and voted to ban landlords from renting to illegal immigrants.

This first-in-the-nation referendum on illegal immigration show the frustration at the local level with Washington’s inability to get the job done.

Noteworthy is that coalition formed opposing the city ordinance significantly outspent those favoring the ban.

Last November the Farmers Branch City Council approved the ordinance but revised it in January to take into consideration the elderly, children and families with a mix of legal and illegal immigrants. The measure drew such fire that opponents petitioned to have the ordinance on the ballot.

On Saturday 68 percent of the voters in Farmers Branch approved the ordinance, 32 percent opposed. Two days after the vote, the opponents went to court asking for a restraining to stop the enforcement of the voter approved ordinance.

Over 90 local governments have proposed, passed or rejected laws prohibiting landlords from leasing to illegal immigrants, penalizing businesses that employ them or training policy to enforce immigration. Most local law are susceptible to court challenge.

Here’s an overview of what’s going on in other states:

California: Seven cities have considered or approved ordinances that favor illegal immigrants. Six cities have done the opposite, passing ordinances containing rental bans or employment bans.

New Jersey: Nine cities have considered ordinances opposing illegal immigrants and three cities have passed local laws favoring illegal immigrants.

Oklahoma: Five cities considered or passed local laws banning employment; one city declared English as the official language and three cities keep illegal immigrants from rending property in the city.

Pennsylvania: Thirty-two municipalities have considered or enacted employment, rental or English only resolutions.

South Carolina: Pickens County, South Carolina unanimously approved a resolution refusing to do business with companies that hire illegal immigrants. Four counties and one city have considered local laws to punish those who employ or rent to illegal immigrants.

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Texas: Three cities, including Farmers Branch, have considered or enacted local ordinances addressing illegal immigrants. Two cities have come out in favor of immigration reform.

(Contact: Ann McCarthy, 1-3015)

Comments Sought on Deer Donation Program

The Iowa Department of Natural Resources is seeking public review of new rules to govern the Help Us Stop Hunger (HUSH) deer donation program. HUSH encourages hunters to shoot more deer and donate them for Iowa's needy.

A public hearing will be held on May 29 at 1:30 p.m. in the east 4th Floor Conference Room of the Wallace Building, 502 E. 9th St., in Des Moines. The objective of the hearing is to receive public input on how the HUSH program operates.

Interested persons may present their views at the hearing either orally or in writing. Written comments may be sent prior to the hearing to Ross Harrison, HUSH Coordinator, DNR, Wallace Building, Des Moines, IA, 50319-0034.

Public Meeting to Discuss Proposed Changes to Furbearer Seasons

The Iowa Department of Natural Resources will host a public meeting to accept comments on an amended rule that would, in part, allow for a limited bobcat hunting and trapping season. A copy of the proposed changes is available online at www.iowadnr.com/nrc/07apr/11.pdf

The proposal would open a season in the following counties: Adams, Appanoose, Clarke, Davis, Decatur, Des Moines, Fremont, Henry, Jefferson, Lee, Lucas, Mills, Monroe, Montgomery, Page, Ringgold, Taylor, Union, Van Buren, Wapello and Wayne. The quota for the total bobcat harvest is 150 from the above counties. The daily bag and season possession limit is one [1] bobcat per hunter/trapper.

The proposed season would be from Nov. 3 through Jan. 31, or until the quota is reached.

The formal public hearing on the amended furbearer rule is scheduled from 10 a.m. to noon, May 30, in the fourth floor conference room west, Wallace State Office Bldg., in Des Moines. The other major change includes closing the beaver trapping season on April 1, instead of April 15.

The DNR will also accept written comments on the proposal. Written comments may be sent through the mail to Wildlife Bureau Chief, Iowa Department of Natural Resources, Wallace State Office Bldg., 502 E. 9th Street, Des Moines, IA 50319-0034. Comments must be submitted on or before May 30, 2007.

(Contact: Kristin Gray, 1-3026)

Governor Signs Several Public Safety Bills

The Governor recently signed five bills that originated in the Public Safety Committee. Those bills are House File 353, House File 432, Senate File 110, Senate File 457 and Senate File 528.

Natural ResourcesPublic Safety

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SF 110 was signed on April 10. The bill changes the training and instruction requirements for reserve peace officers. The controversial section of the bill gives the director of the ILEA the ability to promulgate the rules for this chapter of the Code. The first draft of the rules by ILEA made this bill controversial. However, ILEA subsequently promulgated new rules that were agreed to by all parties.

HF 353 was signed on April 20. The bill establishes a statewide interoperable communications system board, under the joint purview of the Department of Public Safety and DOT. The board is mandated to develop, implement, and oversee policy, operations, and fiscal components of communications interoperability efforts at the state and local level, and coordinate with similar efforts at the federal level, with the ultimate objective of developing and overseeing the operation of a statewide integrated public safety communications interoperability system. For the purposes of this section and section 80.29, "interoperability" means the ability of public safety and public services personnel to communicate and to share data on an immediate basis, on demand, when needed, and when authorized.

HF 432 was signed on April 20. The bill provides that a person shall not mutilate, disfigure, dismember, hide, or bury a human corpse with the intent to conceal a crime. A person who violates the bill commits a class "D" felony. Current law only prohibits a person from knowingly engaging in a sex act with a human corpse. This bill came about because of a case that occurred in Eastern Iowa.

SF 528 was signed on April 23. The bill prohibits the Department of Corrections from entering into an agreement with a private sector, for-profit entity for the purpose of housing inmates. The concern is that should prison overcrowding become an issue (because of the reluctance of the majority party to approve funding for a new prison), the Department or the Governor might have to contract with a private entity in another state to take some of Iowa’s inmates. In addition, should the economy take a downturn and revenue growth recedes, it might be a cost effective way to temporarily reduce the Corrections budget.

SF 457 was signed on May 15. The bill is the peace officers bill of rights, which is a major priority of the Teamsters union. The bill creates a definition of "officer" and provides that an officer shall not be compelled to submit to a polygraph examination against the will of that officer. It states that prior to being interviewed about a complaint against the officer, the officer shall be provided a copy of the complaint. The House approved an amendment that addressed 18 of the 19 concerns that the cities and chiefs of police had about the bill.

(Contact: Lon Anderson, 1-5184)

Elections and Gambling Dominated State Government Committee

With the session completed, it appears that elections and gambling where the focus of the State Government committee. Here is a summary of those areas.

Elections – With Democrats in control of the Legislature, and the Governor’s office a safety valve doesn’t exist for Republicans. Therefore, Democrats passed legislation that dramatically changes the way elections are conducted and, in some cases, eliminates procedures currently in place that protected the integrity of Iowa’s elections. The Democrats also passed some bills that were not controversial and necessary.

Independents Serving on Election Boards - HF 546 allows individuals not affiliated with the Republican and Democratic parties to serve on the election board in all elections. Those individuals may not make up more than one-third of the election board. This bill passed with wide bipartisan support and will help auditors when looking for individuals to serve on election boards.

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Students Serving on Election Boards – HF 618 allows high school students to serve on election boards. Those students must meet the following requirements.

Those qualifications include: A United States Citizen A Junior or Senior that is at least 17 years of age and is good standing and is enrolled in a private or public

school Meets the no place no play administrative rules Written approval of the principle Written approval of the parents Completed the training course Meet all other qualification required of the board.

This bill had some Republican support when the bill passed but is was not overwhelming. The Democrats did take many of the amendments Republicans offered.

Same Day Voter Registration – HF 653 allows for same day voter registration. There are two different ways to register after the close of the registration period.

An individual must show a driver’s license, non-operator’s license or other form of photo identification approved by the SOS. If the photo identification does not include a current address, the individual must also provide current documents that shows the person’s name and address in the precinct.

Alternatively, an individual may also may provide a written oath from someone in the precinct attesting to the voter’s residency in the precinct. The person who signed the oath may only sign one oath per day.

This bill passed almost along party lines. It will dramatically change Iowa’s elections including more opportunities for fraud and for organizations to “herd” people to the polls.

Elimination of Ballot Couriers – HF 844 allows county auditors to open absentee envelopes and check affidavit envelopes prior to Election Day. This bill also eliminates that ballot courier system currently in place and allows all individuals to handle absentee ballots.

This bill dramatically rolls back absentee ballot security meansures put in place by Republicans. Ballot courier training or registration is no longer required. This is extremely disconcerting after ballots were not counted in Woodbury County after they were conveniently left in the Democrat county headquarters.

Auditors’ Election Update Bill – HF 848 makes a variety election reform changes recommended by the Auditors Association and several individual auditors. These Code changes are seen as minor or non-controversial in nature. Most if not all of these requests have been offered for the last several years by Republicans. This bill had overwhelming bi-partisan support.

Voter Verified Paper Trail Bill – SF 369 requires elections held on or after November 4, 2008 a VVPAT is required. The additional VVPAT requirements include:

The paper records are readable by the voter without an electronic device. The VVPAT may be machine readable The VVPAT cannot contain any information that would identify the voter.

On or after the effective date of the bill, a county replacing an entire DRE voting system shall replace it with an optical scan system. The system for disabled must be an electronic ballot marking device.

On or after the effective date of the bill, a county who has a “blended” system and are replacing the DRE component must replace it with an electronic ballot marking device.

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The bill makes other noncontroversial updates to the voting systems requirements. This bill passed with a 53-42 vote.

LSA Redistricting Bill – SF 479 makes changes related to legislative redistricting as recommended by LSA. The changes deal with LSA responsibilities, the timeline, addresses Senate holdover districts, and how compactness is measured. This bill passed with overwhelming bi-partisan support.

Gaming – There were three major gambling pieces of legislation that passed this year. Two of bills related to casinos. The third bill expanded gambling opportunities that took place outside of casinos. There were several other bills that were left on the calendar. Because of the way that Democrats have developed the process of handling gaming bills, expect another interesting year next year.

Racing and Gaming Commission Horse Racing Update Bill - SF 129 makes updates to the laws related to horse racing as recommended by the racing and gaming association. This bill passed with overwhelming bi-partisan support and was truly seen as a technical bill.

Land-Based Gambling Structures - SF 263 allows certain gambling structures to truly be land-based gambling structures.

Gambling structure means any man-made stationary structure approved by the commission that does not include a racetrack enclosure which is subject to land=based building codes rather than maritime or Iowa department of natural resources inspection laws and regulations on which lawful gambling is authorized and licensed as provided in this chapter.

A person awarded a new license to conduct gambling games on an excursion boat or gambling structure in the same county as another licensed excursion boat or gambling structure shall only be licensed to operate an excursion boat or gambling structure that is located at a similarly situated site and operated as a substantially similar facility as any other excursion boat or gambling structure in the county.

After much discussion this bill did pass 71-26 with obvious substantial bi-partisan support.

Veterans and Other Nonprofits Gambling Expansion - SF 414 provides for the expansion of gambling games for veterans organizations and certain groups that obtain an annual game night licenses.

The first part of the bill allows Veterans Groups to hold card games twice a month and award cash prizes. The organization must choose from one of the two options when obtaining a license to determine who may participate in the game and the cash buy in of the game.

The second part of the bill also allows a cash prize in the amount of $10,000 awarded for annual game night activities for the following groups.

Veterans Organizations – There are 8 national sanctioned veterans organization. Some counties have multiple chapters of each of these organizations others may only have one and all eight organizations may not be represented in a county.

Volunteer Emergency Service Providers - this includes volunteer firefighters and volunteer EMS groups

Any qualified organization that is exempt from federal income tax under section 501(c)(3) that have conducted an annual game night during the period beginning January 1, 2001 and ending in December 31, 2006. – 501(c)(3) organizations operate exclusively for religious, charitable, scientific, testing for public safety, literary or educational purposes, to foster national or international amateur sports competition, or prevention of cruelty to children or animals. DIA is unsure how many organization will meet these qualifications and who will be excluded.

This bill pitted several new groups against each other that normally are not involved in the gambling debate. On this particular bill Veterans groups and Emergency Service groups were in favor of the bill while the anti-gambling groups

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and the casinos were opposed to it. However it did pass on a 54-44 mostly along party lines however the bill did have bi-partisan support.

(Contact: Kelly Ryan, 2-5290)

Funding Changes Must Wait Until Next Year

The DOT budget continued to be rather stagnant compared to the other budget bills that dramatically increased this year. In the end, the legislature appropriated $316.5 million to the Department of Transportation (DOT). This includes $46.7 million from the Road Use Tax Fund, $269.8 million from the Primary Road Fund, and 3,374 FTE positions. This in comparison is a rather modest increase of $1.6 million and a decrease of 1.0 FTE positions compared to FY07.

However the Road Use Tax Fund could dramatically change next year. However, unlike many other funds it will change on the revenue column versus the spending column. The TIME-21 policy bill, HF 932, establishes a TIME-21 Revenue Committee. The bill directs the Legislative Council to establish an interim committee to address the TIME-21 fund. The membership of the committee shall be made up of eight members. Four of the members are from the House (2 appointed by the Majority Leader/2 appointed by the Minority Leader) and four of the members are from the Senate (2 appointed by the Majority Leader/2 appointed by the Minority Leader).

The committee may consider the revenue options proposed by the 2006 RUTF report as well as any other revenue options and related issues. The report recommended that the fund receive a minimum of $200 million per year. The report provides a variety of options to raise this $200 million including increasing the fuel tax, increasing driver’s license fees, increasing registration fees, charging a severance tax on exported ethanol, and the establishment of transportation improvement districts. During the 2007 session there was interest among some of the legislators to provide much of that increase by increasing registration fees and not increasing the gas tax. Others were hoping for an increase in the statewide sales and use tax which would like generate about $50.0 million in revenue. However completely new ideas could be offered and forwarded during the next session.

The committee will meet over the summer and fall and is required to report its findings and recommendations, including a proposal for funding the TIME-21 fund, to the general assembly by January 15, 2008.

The Infrastructure Bill: The Good, the Bad and the Pork

This year the infrastructure bill took a step in the wrong direction with the amount “notwithstandings” and pork projects.. However there were a few good things included in this year’s bill.

Overall, the RIIF spreadsheets show that $260,695,609 million will be spent from the Rebuild Iowa Infrastructure Fund (RIIF) in FY08 and $263,489,100 from RIIF in FY09 and FY10. $17,498,833 will be spent from the Technology Reinvestment Fund (TRF) in FY08 and $41,600,000 will be spent from the Vertical Infrastructure Fund in FY08.

Below is a listing of some the good, the bad, and the pork.

The Good – The Infrastructure bill appropriates money to many projects that assist Iowans from across the state. Below is a listing of those projects.

County Fairs: $1,590,000. This is an increase Iowa’s 109 county fairs from $10,000 per fair to $15,000 per fair.

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ACE (Accelerated Career Education) Program: $5,500,000. The Governor did not include this in his budget. The appropriation provides community colleges with money to improve their ACE related facilities.

Nursing Home Facility Assistance: $1,000,000. Under this new program once the federal draw down dollars are available, the nursing home facilities will be able to go in and receive grants to improve their facilities.

State Fair Horse Barn: $3,000,000. This is the first year in a likely three year appropriation totally $9.0 million. The State Fair is current in the process of raising private dollars for the project.

Gold Star Museum: $1,000,000. The bill appropriates a total of $4.0 million to this project over three years. The Gold Star museum is located at Camp Dodge and is free to tour. The Iowa Gold Star Museum is in existence to honor and recognize Iowa’s veterans. The appropriations will help cover a 34,000 square foot addition. Private dollars are also being raised for this project.

Department of Public Defense Projects: $5,950,000. The state continues to provide matching dollars for improvements to the Iowa’s Guard and Reserve facilities across the state.

Regional Emergency Response Training Centers: $1, 400,000. The bill states the funding will be distributed on a grant basis. No grant may be greater than $300,000. In addition, priority is given to those regional emergency response training centers whose initial plans were submitted and approved by the fire service training bureau and who have demonstrated progress in implantation their plans including but not limited to bid letting, conducting training, and obligating a portion of their first year’s allocation. However, $300,000 was earmarked to the two fire training regions that did not get money last year and for a community college water rescue training center.

Recreational Trails: $2,000,000. This continues previous year’s appropriations. Biorenewables Building: $5,647,000. The bill appropriates a total of $32,000,000 over three years for a new

biorenewables building to be located at Iowa State University. The money is contingent up the Board of Regents or ISU actively pursuing the hiring of new research teams to provide world class expertise in the area of biorenewable fuels research.

The Bad – Below is a listing that many in the caucus would determine bad for one reason or the other. Most of the projects on the list are not overall bad projects but need to funded from another source.

Biomedical Discovery Building: $10,000,000. The bill appropriates $30,000 million over three years. This building will include an area that will do the cloning. The Democrats voted down an amendment which strikes the appropriations for the Biomedical Discovery Center at the University of Iowa and appropriates $30 million over three years for the establishment of Iowa Institute for Biomedical Discovery for the study and research of certain health-related diseases and issues including interdisciplinary research, cancer, heart disease and stroke, brain disease, and vision and age-related disease fragility, but not including the study and research of issues relating to somatic cell nuclear transfer at the state university. That would result in no cloning taking place at the new building.

HF 911 notwithstood the definition of vertical infrastructure 25 times. The list of “notwithstandings” is below:o Employee Relocation Expenses/Leaseso Routine Maintenanceo Enterprise Resource Planning Projectso West Terrace Decorative Planterso Property Acquisition and Related Serviceso Tunnel Feasibility Studyo Workforce Development Bldg. Feasibly Studyo Disabled Veterans Memorialo Integrated Information Systemo Corrections Construction Planningo Battle Flagso Kimball Organo Targeted Industrieso Community College Workforce Training and Economic Development Fundso Enrich Iowa Librarieso NE Iowa Community College Ag Safety Training Equipmento Lake and Watershed Improvements

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o Lake Delhi Dredgingo Voting Machine Reimbursement Fundo Tuition Replacemento Railroad Revolving Loan & Grant Fundo Biorenewables Building Furnishingso Environment First Fundo Veterans Home Buyer Program and Administrative Expenseso Military Enduring Families Program

The Pork – The Infrastructure bill is well known for its pork. There are several projects below that were added to benefit a smaller group and usually are there at the request of an individual legislator. Naturally, however, the people that benefit from these projects are very grateful.

Decorative Planter for west of the West Capitol Terrace: $120,000. These flower pots will be locate in the East Village and not on state property.

Worker’s Monument: $200,000. Private dollars are also being raised for this project. National Disabled Veterans Monument: $50,000. The money for the project is similar to what was done with

the WWII. It will go to Washington and be matched national for the project. Frank Lloyd Wright Hotel: $200,000. The money will go to the last remaining Frank Lloyd Wright style

hotel. It is located in Mason City. Lake Volga: $750,000. This project did not go through the process established by code that the other lakes are

required to go through. This project will receive $1.5 million over two years. Lake Delhi: $100,000. This project did not go through the same process as established by code because it is a

private lake with public access. Carter Lake: $500,000. This project did not complete the process established by code. It will receive $1.0

million over two years. Burlington Airport: $20,000 is appropriated to assist the airport due to lost service of a federal funded essential

air service carrier to regain daily enplanement rates. Kimball Organ: $80,000. This money will be spent as stated on the Kimball Organ located in Claremont. Regional Sport Authority Districts: $500,000. This appropriation will go to different newly created regional

sports authority districts. The policy language that establishes the districts was included in this bill. The appropriates a total of $1.0 million over two years.

National Education Center for Agricultural Safety Training: $35,000. The bill appropriates money to Northeast Iowa Community College for this program. The project was not presented to the subcommittee and was not included in the Governor’s budget.

EB Lyons Nature and Interpretive Center: $100,000. This project is located at the Mines of Spain State Recreation area in Dubuque and was not present or included on information until the Senate amendment came out.

Water Rescue Training Center: $100,000. This project also was not included on any list or was formally presented to the subcommittee. It will be located at Eastern Iowa Community College.

Tri-State Graduate Center Technology: $5,000. Of the $500,000 appropriated for the laptop program, $5,0000 is to allocated to the above program.

Jewell-Ellsworth trail: $215,000. Money for the project will be taken from the recreational trails competitive grant program. This will result in less money compared to last year being available for the program. The DOT was opposed to this earmark.

Crawford County trail: Money for the project will be taken from the recreational trails competitive grant program. This will result in less money compared to last year being available for the program. The DOT was opposed to this earmark.

City of Fairfield Loop Trail: $200,000. Money for the project will be taken from the recreational trails competitive grant program. This will result in less money compared to last year being available for the program. The DOT was opposed to this earmark.

(Contact: Kelly Ryan, 2-5290)

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Veterans See A Number of Legislative Changes

In its second year of existence the Veterans Affairs committee was very busy. Below is a summary of key pieces of legislation.

Veterans Lice Plate Fees to the Veterans License Fee Fund – This year the legislature, in HF 749, redirected the additional revenue Veterans pay when obtaining or renewing their veteran license plates to the veterans license fee fund. This issue was a Veterans Commission resolution. This will affect the extra fees the following license plates:

National Guard Special Plate Pear Harbor Special Plate Purple Heart Special Plate United States Armed Forces Silver Star and Bronze Star Special Plate

The bill also creates several new veterans license plates. The additional fees paid for these plates will also be directed into the Veterans license fee fund.

Distinguished Service Cross Navy Cross Air Force Cross, Soldier’s Medal Navy and Marine Corp. Medal Airman’s Medal

Injured Veterans Eligible Expansion Bill – HF 767 amends the injured veteran grant program eligibility to include a nonresidents that is a member of a National Guard unit located in Iowa prior to the alert for mobilization who served on active duty after September 11, 2001 and was injured while representing Iowa in active duty. The injured veteran can not be eligible to receive a similar grant from another state.

The bill also strikes language that requires the presence or assistance of family members is necessary.

Veterans Omnibus and Flag Desecration Bill - HF 817 started off as the Veterans Omnibus Veterans Bill. Under that capacity it transfers some of the duties of the Commission on Veterans Affairs to the DVA Executive Director. The bill specifically addresses how rules are handled. The bill also studies regional development offices, states the DVA executive director and the Commandant of the Veterans Home as ex officio members of the Commission. When different Veterans groups spoke formally and informally to the Veterans Affairs committee they spoke of problems relating to the writing of rules, County Veterans offices, and the relationship between Veterans Appointed Leaders and the Veterans Commission. This bill is an attempt to fix that problem.

The bill also amends current code sections relating to the language regarding the flag desecration court ruling. This language was formed after U.S. District Judge Pratt found Iowa’s law unconstitutional due to vagueness. Republican representatives took the lead by clarifying and strengthen Iowa’s law.

Veterans Gaming Expansion Bill - SF 414 provides for the expansion of gambling games for veterans organizations and certain groups that obtain an annual game night licenses.

The first part of the bill allows Veterans Groups to hold card games twice a month and award cash prizes. The organization must choose from one of the two options when obtaining a licenses to determine the who may participate in the game and what the cash buy in of the game is.

Veterans Affairs

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The second part of the bill also allows a cash prize in the amount of $10,000 to be awarded for annual game night activities sponsored by Veteran Organizations. There are 8 national sanctioned veterans organization. Some counties have multiple chapters of each of these organizations others may only have one and all eight organizations may not be represented in a county

Democrats Play Fast and Lose with Veterans Funding

While the Democrats may say that this was a banner year on the funding side of things for the Veterans, the numbers paint a different picture. The most disappointing area is the Veterans Trust Fund where a promised increase of $5 million never materialized.

New FundingGold Star Museum $4,000,000 Infrastructure Fund

The legislature appropriated $4.0 million to the Gold Star Museum over three years. The Gold Star museum is located at Camp Dodge and is free to tour. The Iowa Gold Star Museum is in existence to honor and recognize Iowa’s veterans. The appropriations will help cover a 34,000 square foot addition. This is the first year the museum has request an appropriation.

Veterans Disable For Life Memorial $50,000 Infrastructure FundDo to Republican urging, funding for the national Veterans Disable for Life Memorial funding was secured. Iowa’s funding will be matched by a national group.

Vietnam Veterans Bonus $500,000 Veterans Trust FundDue to Republican urging legislation was passed that finally provides bonus dollars Vietnam Veterans serving due the entire period of conflict. Individuals serving during approximately 2 years of the conflict were not provided grants. This appropriation is a start at covering those two years. It is currently unknown how much money is needed to finish meet the state’s obligation.

Veterans Counseling Program $50,000 General FundThe intent of this new program is to assist those veterans that are not currently located near a federal facility that can provide assistance. The legislation clearly states that the program can not be duplicative of current services.

Preservation of Civil War Muster Rolls $150,000 Veterans Trust FundThe Department of Cultural Affairs will receive money beginning this year to preserve the civil war muster rolls.

Enduring Families Program $50,000 Infrastructure FundThis new program proposed by Governor Culver will assist families.

Civil War Sesquicentennial Planning $50,000 General FundThe Department of Cultural Affairs and the board will use this funding for planning.

Continuation of Previous FundingHome Buyers Assistance Program $2,950,000 FY07 GF/FY08 Infrastructure

As the program success surpasses expectations, supplemental appropriations. This program assists veterans with the purchase of a new home. Any additional money above $5.0 million will go to the Home Buyers Assistance Program. Because that number is currently unknown it is not included in the above appropriation number.

Injured Veterans Assistance Program $2,000,000 2007 General FundThis program provides financial assistance to Iowa’s injured veterans. Due to the program catch up with previous years needs additional appropriations were needed. The department believes they now have most the previous years’ needs accounted for. However that may change as a result of program eligible being expanded to include those Guard member in an Iowa unit prior to being injured even though the may not live in Iowa.

Department of Public Defense Projects $5,950,000 Infrastructure Fund

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The legislature continues to provide matching dollars for improvements to Iowa’s Guard and Reserve facilities across the state.

Children of Deceased Vets Educational Assist. $27,000 General FundThis continues to fund current and future needs.

Department of Veterans Affairs Budget $813,487 General Fund/Veterans Trust FundThe appropriation is an increase of $281,000general fund dollars. Much of that money will be used for the Veterans Cemetery that will open this fall. In addition $150,000 from the Veterans Trust Fund will provide an additional 2.0 FTE positions for the Department, in addition to the cemetery staff being added with this new money.

County Veterans Grant Program $750,000 General FundThis grant program was established last year. Unfortunately due to problems with the rules process not many if any grants have been awarded so far this year. Therefore this program will continue the process of assisting veterans.

Veterans Trust Fund $500,000 General FundThe Democrats appropriated dramatically less then the $4.5 million appropriated last year of the $5.0 million promised in the legislative intent language.

Iowa Veterans Home $14,509,630 General FundThis is a decrease of $521,000. This money is the typical decrease when an entity is net budgeted. Salary funds are provided in the previous year and then returned to the State the following year. Approximately 21% of the veteran home budget is from the State General Fund appropriation.

Iowa Battle Flags $220,000 Infrastructure FundThis continues previous year’s appropriations to restore Iowa’s Battle Flag collection.

Fast and Lose with the Veterans Trust Fund RevenueApproximate Current Balance $5,000,000FY08 General Fund Appropriation $500,000Estimated 07 Reversions from County Grants $500,000 (Assumes on 50 counties will Total $6,000,000 receive the grants in FY07)

ExpendituresVietnam Veteran Bonus $500,000Civil War Muster Rolls $150,0002 DVA positions $150,000 Total $800,000

Fund BalanceVeterans Trust Fund Estimate $5,200,000*

*If more than $5.0 million is left in the Veterans Trust Fund it will automatically go to the Veterans Homebuyers Program.

(Contact: Kelly Ryan, 2-5290)

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Tax Changes Signed Into Law

Targeted Jobs Pilot Project Changes – House File 95House File 95 makes changes to the targeted jobs pilot project by providing that if two eligible cities are approved that are located in the same county and the total county population is leas than 45,000, the two approved cities are considered as one pilot project city. The bill also provides that if one of the two cities (in the same county) loses its status as a pilot project city, the other pilot project city will not lose its status.

This bill also eliminates the requirement of the Department of Management to make the determination of which cities hold the most potential to create new jobs or generate capital. This section requires only the Department of Economic Development to make the determination.

The House approved House File 95 on January 30, 2007 by a 96-0 vote and was signed by the Governor on February 6, 2007.

Earned Income Tax Credit Expansion – Senate File 590

Senate File 590 increases the amount of the state earned income tax credit from 6.5% to 7% of the federal tax credit and makes the tax credit refundable.

The House approved Senate File 590 on April 27, 2007 by a 94-1 vote and was signed by the Governor on May 15, 2007.

Iowa income tax provisions are rooted in federal tax law and many of the credits that are allowed to taxpayers under federal law are allowed on Iowa tax returns as a percentage.  Senate File 590 provides that the state EITC is a refundable state credit and is allowed against any Iowa income tax at the rate of 7 percent of the federal EITC. Previously, this had been a non-refundable credit of 6.5% of the federal credit.

The federal EITC is a refundable income tax credit for low-income working individuals and families.  Congress originally approved the tax credit legislation in 1975 in part to offset the burden of social security taxes and to provide an incentive to work.  When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit (for federal tax purposes only)A taxpayer may be eligible for the EITC based on the following general requirements:

The taxpayer earned less than $12,120 ($14,120 if married filing jointly) and does not have an any qualifying children

The taxpayer earned less than $32,001 ($34,001 if married filing jointly) and has one qualifying child The taxpayer earned less than $36,348 ($38,348 if married filing jointly) and has more than one qualifying

child To receive the credit, taxpayers must file a tax return, even if they did not earn enough money to be obligated to file a tax return.

The EITC has no effect on certain welfare benefits. In most cases, EITC payments will not be used to determine eligibility for Medicaid, Supplemental Security Income (SSI), food stamps, low-income housing or most Temporary Assistance for Needy Families (TANF) payments.

The federal EITC can be worth up to $4,500 for tax year 2006.

Ways and Means

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While SF 590 helps to benefit low-income Iowans, there is a potentially downside. Making the credit refundable allows Iowans who don’t hold steady employment to receive a refund from the state.  While middle class taxpayers failed to receive any income tax relief and continued to watch their property taxes grow State government didn’t do anything for middle-class Iowans. It would seem that low-income Iowans, along with Iowans who are failing to pay their taxes or just plain cheating on them are the only people to see any real tax relief this session.

Cigarette and Tobacco Tax Increase – Senate File 128Senate File 128 increases the state cigarette tax from 1.8 cents per cigarette to 6.8 cents per cigarette. This increases the Iowa Cigarette Tax to $1.36 per pack of twenty. Additionally, the bill creates a new Health Care Trust Fund in the Office of the State Treasurer. The fund specifically consists of revenues generated from the tax on cigarette and tobacco products that are appropriated from the General Fund. Moneys in the Health Care Trust Fund are to be spent only on:

Purposes related to health care Substance abuse treatment and prevention Tobacco use prevention, cessation and control

Senate File 128 also creates a new standing appropriation from the General Fund to the “Health Care Trust Fund.” Beginning on July 1, 2007, there is a standing appropriation of $127.6 million from the General Fund to the Health Care Trust Fund (the $127.6 million is to be from the revenues of the cigarette and tobacco tax that is paid to the General Fund).

The House approved Senate File 128 on March 13, 2007 by a 58-40 vote and was signed by the Governor on March 15, 2007.

Utility Replacement Tax Task Force – Senate File 278Senate File 278 was recommended by the Utility Replacement Tax Task Force. The task force meets several times throughout the year and at the November 6, 2006 meeting the task force recommended changes to the replacement tax law, which were put forward Senate File 278.

The changes include:

Correcting a significant site tax allocation issue when an electric generating plant is sold (if the plant is in service prior to January 1, 2003). Under current law, only a fraction of the former site replacement tax is at the site upon a sale. HSB 104 defines a “new electric power generating plant” and kept the first $45 million of taxable value at the site.

The task force is extended until January 1, 2010 (the task for expired at the beginning of this year) Adds language which requires a taxpayer to notify the Department of Revenue when property is sold or

transferred.

Senate File 278 was approved by the House on April 17, 2007 by a 99-0 vote and was signed by the Governor on May 11, 2007.

Internal Revenue Code Update – House File 319House File 319 couples the Iowa Income Tax Code with the federal Internal Revenue Code.

House File 319 updates the provisions in the Iowa Code for the Iowa research activities credit to include revisions in the federal research credit, which is the basis for the Iowa research activities credits. The Iowa code sections which define the Internal Revenue Code for Iowa income tax purposes are also updated so that all of the 2006 federal changes which affect the computation of Iowa net income for individuals, corporations and financial institutions are adopted.

Other tax provisions: extends the increase in the expensing under Section 179 of the Internal Revenue Code for small businesses to tax years 2008 and 2009; the deduction for educator expenses, the tuition and fees deduction for higher

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education, and the deduction to deduct state sales/use tax in lieu of state income taxes, were extended through the 2007 tax year.

House File 319 was approved by the House on February 28, 2007 by a 99-0 vote and was signed by the Governor on March 9, 2007.

Bills Awaiting Governor’s Action:

Web Search Portal Tax Exemptions – House File 912House File 912 adds a new sales and use tax exemption for the following:

Sale or rental of computers and equipment that are necessary for the maintenance and operation of a web search portal and property connected to:

o Cooling systems, cooling towers and other temperature control infrastructureo Power infrastructure for transformation, distribution or management of electricity used for the

maintenance and operation of the web search portalo Racking systems and cabling trays used for maintenance and operation

Back-up power generation fuel used in the items above Electricity

Additionally, the bill provides for a property tax exemption for the property (machinery and equipment) used by a web search portal in the operation of the web search portal.

The House approved House File 912 on April 25, 2007 by a 95-1 vote.

Streamlined Sales Tax Clean-up – Senate File 592Senate File 592 provides legislative changes to the Iowa sales and use tax laws that are based on the streamlined sales and use tax agreement in order to remain compliant with the national streamlined sales and use tax agreement.

The bill adds Puerto Rico as a state that can be included in the streamlined sales and use tax agreement; specifies under what circumstances a purchaser is relieved of liability for tax, penalty, and interest.

Senate File 592 was approved by the House on April 26, 2007 by an 89-8 vote.

Tax Amnesty – Senate File 580Senate File 580 requires the Director of the Department of Revenue to establish a tax amnesty program to apply only to taxpayers who have a delinquent tax liability as of December 31, 2006, including any tax due on returns not filed, tax liabilities owed to the Department as of December 31, 2006 or tax liabilities not reported or established, but delinquent as of December 31, 2006.

The tax amnesty shall run from September 4, 2007 through October 31, 2007.

This bill authorizes a taxpayer, during the amnesty period, to pay any outstanding tax liability plus one-half of the interest that would normally be due without being subject to further penalty or civil and criminal prosecution. If a taxpayer fails to pay all of the delinquent tax liability, then the amnesty is invalid. A taxpayer who participates in amnesty must relinquish all administrative and judicial rights to challenge the imposition of the tax and the tax amount, except for adjustments pursuant to a federal audit.

The House approved Senate File 580 on April 27, 2007 by a 55-38 vote.

Loan Agencies Tax Repeal/Withholding Tax Changes – House File 904

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House File 904 repeals the loan agencies tax . In a ruling dated March 28, 2006, the Polk county district court in General Motors Acceptance Corporation v. Polk County, Iowa, et al., ruled that this tax facially discriminated against interstate commerce and violated the United States Constitution's commerce clause because this tax was only imposed on out-of-state corporations, and was not imposed on Iowa-based corporations. This tax is no longer being enforced by the Iowa Department of Revenue and the county treasurers who administered and collected this tax.

House File 904 also amends the state individual income tax withholding provisions to allow additional exemptions from withholding to account for such items as contributions to individual retirement accounts and the additional standard deduction for persons who are aged and blind.

The House approved House File 904 on April 26, 2007 by a 96-0 vote.

House Republican Talking Points

Debunking the Democrat’s claims of “fiscal responsibility”

The final increase in spending in FY 07 was $555 million over enacted FY 07 approps, which is 10.5 percent above enacted appropriations. 

When the $52 million in supplemental appropriations are shifted into their correct year -- this would be any supplemental that notwithstands Chapter 8.33 of the Code so it can be spent in FY 08 -- it's an increase of roughly $580 million, or an increase of 11 percent. 

The Democrats will claim that the increase is "only" $483 million, or 9 percent.  They will claim this because of the way the supplemental appropriations are calculated -- even if they've stretched the definition of "supplemental" beyond its limits.

The bottom line is even if Iowans take Democrats at the “word”, they still increased spending by 9 percent. If Iowans want the truth they will see that Democrats increased spending by 11 percent. Does the 2 percent difference matter? Only if you think $97 million is a lot of money.

As for the built-ins for FY 09 – or the “out” year the Democrats refused to acknowledge, the "official" number for built-ins will be roughly $630 million over FY 08.  However, when "expected appropriations" like Regents, community colleges, etc. are included, the number balloons to over $700 million for FY 09.  It would take 12 percent revenue growth to cover that amount of spending.  The average revenue growth is 4 to 5 percent per year.

If the budget grows by $528 million this year and $743 million next year, that is $1.27 billion in two years.

From FY 96 ($3.84 billion) to FY 07 ($5.30 billion) -- which is 12 fiscal years -- the budget grew by $1.46  billion, or an average of $122 million per year.

In addition, the Ds are adding 558 new state employees.  That's 558 new AFSCME members to pay unions dues.

Democratic leaders are telling Iowans that the reserve funds are at the highest level in years after GOPers had raided the funds.

The only reason the reserves are at their highest level is because the D’s approved the biggest budget in the history of the state!

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State law requires the reserves to have 10 percent of projected general fund revenue.  Due to the big tax increase, that required an additional $50 million be placed in the reserves.  The only reason that the reserves were full to 10 percent in the first place was due to prior legislatures not spending all of the surpluses, which allowed the reserves to be refilled.  (Essentially they are taking credit for our work -- big shock!)

The Democrats essentially walked in and put the icing on the cake after Republicans worked for years to avoid raising taxes, to balance the budget within existing state revenues AND protect the reserves.

As far as the Senior Living Trust Fund is concerned, according to Fiscal Services, using current assumptions the SLTF will be completely empty in FY 09.  It will be hard for the Ds to take credit for refilling it when they are draining it to fund the budget as soon as the money goes to repay it.

The next time you hear a Democrat take credit for “replenishing” the SLTF, ask them what they plan to do in FY 09 when it will be completely empty due to their reckless budget decisions?

In response to claim by Democratic leaders that House GOPers criticism of the D's budget is disingenuous since we offered amendments to spend more than $700 million -

The $700 million in GOP amendments to the Democrat's $5.9 billion budget doesn't mean we tried to spend $700 million more than than them, it means we tried to spend $5.2 billion less than them!  GOPers didn't support the reckless budget Democrat's approved, that's why we voted against the budget bills and offered amendments to spend taxpayer dollars more efficiently and more prudently.

Building a Tax Increase

The budget Democrats wrote and approved is 11% larger than the budget that Republicans passed the year before. Democrats had to raise taxes over $150 Million to make this years budget work.  Whose taxes do they plan on to raising next year?

Next year the Democrats have already built in $700 million in spending. That is at least $1.27 increase in two years. A 12% increase in revenue is needed to cover their spending. Current revenues average between 4 and 5 percent. This course of action will lead to huge tax increases. Without an infusion of new revenue to maintain this reckless level of spending, Democrats will have to make across the board budget cuts. Tax increases or budget cuts – that is the future facing Iowans if Democrats continue this rate of spending.

Teacher Quality Bill

Recent comments from Sen. Gronstal:“Gronstal said he was particularly happy with the Legislature's work when it came to teacher pay. Teachers will receive more than $5,000 in pay raises over the next two years as part of an effort to lift the average Iowa teacher's salary from 42nd in the nation to 25th.

“By most measures, our schools are in the top-five in the nation, ”Gronstal said, “and in every measure, we're in the top-10 so to be ranked 42nd was just a travesty. ... No longer will our young people have to go to Texas, Arizona or even Minnesota and Wisconsin to teach.”

The Truth: Not every teacher in Iowa will get a $5,000 raise automatically.  That’s a myth.  There’s no guarantee. This

new money must be collectively bargained and more newly mandated unfunded staff are now included in the pay plan (media specialists, nurses, librarians). 

Democrat 2007 education agenda:  “Money for Nothing.”

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o Democrats stopped amendments incorporating improved student learning as one of the various factors driving a teacher’s salary

o Instead Iowa now has yet another pilot program on performance based pay. o Governor Culver vetoed the most important part of the pilot…..a guarantee that performance based

pay would happen in 2010. Democrats certainly took time to lower student expectations.  SF 588 eliminated the goal that 80% of

Iowa’s graduates pass the rigorous ACT curriculum goals.  Iowa’s three regent universities set these high expectations for their incoming students but Democrats resorted to saying that minimum federal compliance standards are good enough for Iowa students.  The Democrats were afraid to mandate rigorous curriculum and instead said Iowa school districts “are encouraged” to adopt the rigor necessary to succeed in today’s workplace.

The Democrat’s humorously titled Plan for Prosperity also called for “lowering student tuition” and “restoring work study”.  Democrats didn’t guarantee limited tuition increases and the $2.7 million Work Study program gets $300,000 next year.  What happens to those goals?

Both Republicans and Democrats campaigned on raising teacher salaries. The difference is that while Democrats want to pay teachers more, Republicans want to pay our best teachers more. The Democrat’s plan dumps $145 million into teacher salaries without any accountability surrounding the money. Republicans don’t believe that higher pay equals better teachers or high student achievement. This bill isn’t about teacher quality, it is about payback to the powerful teacher’s union. The fact of the matter is that this bill represents genuine difference between Republicans and Democrats when it comes to education policy. The largest of those differences are the following:

1- Democrats are shifting power away from locally elected school boards to the teacher’s union.

2- Democrats continue to pass legislation that will raise property taxes.

3- Nothing in the Democrat’s plan increases student achievement – it in fact lowers student expectations and standards.

Shifting Power Away From School Boards and to the Teachers Union

Under the Democrat’s plan, the teacher’s union will negotiate terms of evaluation and how the teacher quality money is dispersed. We seriously doubt the teacher’s union will negotiate a plan that makes it harder for teachers to get pay raises. The union is going to make it as easy as possible for its members to make more money.

The Democrats also make it harder to terminate bad teachers and makes it easier to give bad teachers a raise. Most Iowans don’t agree with that. Where is the incentive for poor performing teachers to improve? If the Legislature is going let the teacher’s union, instead of administrators and school boards, dictate the terms of teacher evaluation and make it easier for the poorest performing teachers to get raises, why improve?

Raising Property Taxes

This bill is just the latest example of a shift in policy that is leading down the path of increases taxes – especially property taxes. The preschool bill we did last week allowed school districts to take funding currently allocated to K-12 needs and spend them on preschool instead. Any kind of shift will open a funding gap that will need to be filled.

Now we have this, the teacher’s union payback bill. The bill plows $145 million into teacher salaries without tying the increase to improved teacher performance to higher student achievement. The Democrat’s plan removes a restriction that prevents property taxes from being used to pay for salaries. As salaries increase, what do we think will happen to property taxes.

Student Achievement Ignored28

Research proves that paying teachers more does not appear to be associated with higher student achievement. Which means that this bill has nothing to do with helping our children become better students but has everything to do with paying back the teacher’s union for hundreds of thousands of dollars it poured into Democratic campaigns.

There needs to be accountability built into the system. This bill does just the opposite. It provides a disincentive for teachers to improve, it empowers the teacher’s union to set evaluation standards, it takes power from our locally elected school boards and finally it is yet another example of an agenda that will lead to higher taxes.

The Democrat’s Real Agenda

Raised the minimum wage from $5.15 to $7.25 per hour by 1-1-08. During the fall elections, House Democrats promised to raise the minimum wage in Iowa from $5.15 an hour to $7.25 an hour by 2009. While that’s good for low wage earners, it is bad for small employers.

Democrats are more than happy to tell constituents they have raised the minimum wage, however they failed to provide a pay hike to those Iowans who serve our youngest citizens. In FY 2006 and FY 2007, House Republicans made sure that state childcare assistance payments were increased. House Study Bill 301 does not include any funding to implement the 2006 childcare rate survey. Stagnation on commercial property tax relief after promising Iowa’s business communities they’d see action on property tax relief, the Democrats have fumbled along for two months without any progress.

Approved a symbolic bullying bill by requiring all school district to have bullying policy in place by September 1. The Democrats conveniently ignored the fact that all public and non-public schools are already required to have a student discipline policy in place addressing harassment in order to be accredited. In their rush to pass a bill they forgot to include cyber-bullying on their list. Thanks to Republicans it is now included. Below is the list of student traits or characteristics that the Democrats included on their “list”.

Age Color Creed National origin Race Religion Marital status Sex Sexual orientation Gender identity Physical attributes Physical or mental ability or disability Ancestry Political party preference Political belief Socioeconomic status Familial status.

Republican amendments to include a parent involvement policy and nonpublic school language clarifying that the bullying policy should not inhibit teachings or consideration of doctrinal matters were eliminated from the final version of the bill. Allowable growth funding levels that are suspiciously similar to the levels adopted by Republicans. Democrats adopted a 4% allowable growth rate and rejected an opportunity to approve 6% allowable growth. They also rejected a plan to have the state take the burden off local property taxpayers. Despite the opportunity to approve additional

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education dollars AND provide some property tax relief LIKE THEY PROMISED THE VOTERS LAST FALL, Democrats rejected the ideas.

Repealed Iowa’s ban on human cloning… Essentially the Democrats repealed the code section which bans human cloning and are replacing it with a new “ban” which isn’t a ban.

Chapter 707B prohibits human cloning for any purpose, whether it be for Reproductive or therapeutic cloning. A person performing or participating in cloning would be guilty of a class C felony, while transporting cloned embryos is a aggravated misdemeanor. The prohibition does not impact in vitro fertilization.

HF 287, the Democrat’s cloning bill, repeals Iowa Code Chapter 707B. It says so right on page 2, line 19 – “Chapter 707B, Code 2007, is repealed.”

What is the difference between reproductive and therapeutic cloning?

Reproductive cloning, sometimes called human cloning, is done utilizing a process called “somatic cell nuclear transfer” (SNT). SNT involves the removal of the nucleus of an adult somatic cell (any cell other than a sperm or egg). The nucleus from the cell is then transferred to an egg cell from which the nucleus has been removed. Through proper stimulation, the cell develops into an embryo that can then be implanted into the uterus. A real life example of this is Dolly the sheep.

Therapeutic cloning or nuclear transplantation utilizes similar procedures to reproductive cloning, with the difference being the end result. The embryo created for therapeutic cloning has the stem cells extracted from it. This is embryonic stem cell research.

An early childhood bill that has nothing to do with children but everything to do with ISEA recruiting. The Democrats have managed to pass a bill that:

does nothing to help the most at risk children receive quality pre-K instruction raises costs to parents of preschool children increases the red tape and regulations for private preschools specifically excludes private preschools from employing any of the teachers hired under the bill raises local property taxes to pay for it

The payoff for children and their parents? A public school teacher visiting every preschool for 10 hours a week. If one were cynical, one could argue quite convincingly that ISEA is in favor of this bill because the most tangible result is more union members for ISEA.

Pulled a fast one on the tobacco tax increase…After approving SF 128, Democrats insisted the first $127.6 million of increased tax revenue flowed into the new Health Care Trust Fund ostensibly to fund health care priorities. If the Democrats own balance sheet is truthful, 100 percent of the new revenue is deposited into the general fund NOT into the Health Care Trust Fund.

The bottom line is that all cigarette tax revenue is going to the general fund for new spending NOT for health care.

Speaker Murphy on the tobacco tax:

“Last week House Minority Leader Pat Murphy, D-Dubuque, said a cigarette tax hike isn’t needed because they state now has a budget surplus fueled by healthy tax revenues. That sounded a lot like the argument made last spring by GOP House Speaker Christopher Rants, who was criticized by Murphy for refusing to allow a vote on raising the tax.” (Sioux City Journal, 10-12-06)

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“The Iowa House is unlikely to go along with incoming Gov. Chet Culver’s proposal for a dollar increase in the cigarette tax, incoming House Speaker Pat Murphy said Friday. “I don’t think we’ll go that high,” said Murphy…Instead, he looks for a tax increase in the range of 40 cents to 60 cents a pack.” (Des Moines Register, 1-6-07)

"’Governor Culver has given some compelling arguments to go to a dollar," Murphy said during a taping of Iowa Public Television's "Iowa Press" program, which will air this weekend.” (Associated Press, 2-10-07)

The House Democrats claim that all of the new money generated by the cigarette tax hike will be spent on health care. However, when the joint budget targets are released, it will become evident that the bulk of the increase goes to fund increases for other areas of the budget including the Regents, teacher salaries and state employee salaries.

You may have also heard about what the Governor is calling the "smoking gap":

Governor Culver has been talking about the dramatic $187 million Medicaid gap between what the current tobacco tax brings in and what is paid out for smoking-related illnesses. Today, Iowa has the 9th lowest tobacco tax in the nation and currently brings in $90.5 million per year in revenue. Meanwhile, the annual Medicaid expenses for smoking-related illnesses amounts to $277 million per year. This leaves a $187 million gap funded mostly by non-smoking Iowans.

What he doesn't want you to know is that for every $1 the state spends on Medicaid, the federal government spends $2. Therefore, if the $90.5 million is spent on Medicaid, it will be matched with $181 million from the federal government, almost completely eliminating this so-called gap.

Killed Castle Doctrine…Castle Doctrine allows reasonable use of force to defend yourself and your home.

Shifting Power to the Teacher’s Union and Away From School Boards…Under the Democrat’s teacher pay plan, the teacher’s union will negotiate terms of evaluation and how the teacher quality money is distributed. We seriously doubt the teacher’s union will negotiate a plan that makes it harder for teachers to get pay raises. The union is going to make it as easy as possible for its members to make more money.

The Democrats also make it harder to terminate bad teachers and makes it easier to give bad teachers a raise. Most Iowans don’t agree with that. Where is the incentive for poor performing teachers to improve? If the Legislature is going let the teacher’s union, instead of administrators and school boards, dictate the terms of teacher evaluation and make it easier for the poorest performing teachers to get raises, why improve?

Raising Taxes…This bill is just the latest example of a shift in policy that is leading down the path of increases taxes – especially property taxes. The preschool bill we did last week allowed school districts to take funding currently allocated to K-12 needs and spend them on preschool instead. Any kind of shift will open a funding gap that will need to be filled.

Now we have this, the teacher’s union payback bill. The bill plows $70 million into teacher salaries without tying the increase to improved teacher performance to higher student achievement. The Democrat’s plan removes a restriction that prevents property taxes from being used to pay for salaries. As salaries increase, what do we think will happen to property taxes.

Refused to allow debate on veteran’s assistance bills…Republicans offered two amendments which would have provided free tuition to Iowa veterans who received harzardous duty pay and to the families (children and spouses) who were severely disabled or killed in action.

Expanded gambling…A bill that originally was supposed to allow veterans engage in recreational poker nights was hijacked by Democrats and turned into a bill that allowed other “qualified” organization to hold casino nights.

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The bill allows certain organizations to award cash prize for participation in any game of skill, game of chance or card game conducted during an annual game night. The cash prize in total shall not exceed $10,000 and no one individual shall be awarded more than $5,000. Under current law cash prizes are not allowed.

Flower Pots, and personal securityDemocrats have carved out cash in the state budget for flower pots at the Capitol Building and extra troopers for the personal security of the Governor and his family.

ACLU ProtectionThe ACLU is getting rich at the expense of taxpayers. For example, the ACLU sued Los Angeles County to remove a small cross visible on a Spanish Mission in the county’s official seal, the county chose to remove the cross rather than face the risk of losing the case and paying the ACLU’s legal bills. Several groups won a case in Alabama to remove a Ten Commandments display from a courthouse, taxpayers were forced to pay the ACLU and others nearly $550,000.A Pennsylvania judge awarded $2 million to the ACLU of Pennsylvania and Americans United for Separation of Church and State. The two groups sued the school board in Dover, Pa., for requiring science teachers to teach "intelligent design" alongside evolution. It is right for activist groups to exercise their right to sue a local or state government for a perceived violation of the First Amendment. But it is wrong for these well-funded activists to bring suit and demand their legal costs are paid by taxpayers.

If an activist group wants to sue to prevent a local or state government from displaying a religious image, it should pay the bill itself.

Runaway Spending and Big Tax IncreasesThe first budget written and approved by the Democrats details all their tax and spending increases. It amounts to a 10.5  percent increase in spending and $144 million in tax increases.

The total increase in the FY 08 general fund budget is $ 555 million, or 10.5  percent above the budget enacted last session.

Even when the $ 71 million in supplemental appropriations are factored into the FY 07 budget, the increase for FY 08 is $4 83  million, or  9.0 percent compared to last year.

Now comes even more bad news for taxpayers. According to figures recently released Fiscal Services, the built-in expenditures for FY 2009 approach $700 million.

The Democrats still plan to raise taxes by $150 million this session. It remains to be seen how high taxes will have to be raised to fill the revenue shortfall they are building into the FY 09 budget.

Big Fines to Businesses…Free Ride to Tax CheatsSo let’s get this right – the Democrats are hiring more OSHA inspectors to fine legitimate Iowa businesses thousands of dollars over OSHA violations. But they passed a tax amnesty bill that lets people who don't pay their taxes off the hook without paying any fines.

Iowans who have been working hard, playing by rules and paying their taxes get socked with $144 million in tax increases this year and even more next year, while Iowans who have been breaking the rules and cheating the system, get a free ride.

Top spending priority is union salariesDemocrats spent $107 million on union salary increases.

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The $107 million represents the largest increase in the budget this year. That means the top spending priority for the new Democrat majority is not for teachers, health care or economic development. It is to pay back the state employees union.

Raiding the Senior Living Trust FundThe Democrats have a balance of $142 million in the Senior Living Trust Fund (SLTF) in FY 08. This is $55 million less than the Governor’s recommendation. Also, according the LSA the SLTF will be completely drained by FY 09 unless the Democrats act

Between raising taxes, approving an unsustainable rate of spending growth and raiding trust funds, the budget blueprint put forth by the Democrats is fiscally reckless.

Fair ShareSF 413 forces non-union public employees - like teachers- to pay union dues. The only way for public employees to avoid paying union dues is to quit their jobs.

The effect of SF 413 is the same as a direct repeal of the Right to Work law.

The so-called “Fair Share” legislation is not fair. It is forced unionism.

There is nothing fair about forcing individuals to pay dues to a union or an organization they do not choose to belong.

There are amendments to SF 413 which, among other things, would do the following: Relieve public employee unions of the burden of representing non-union employees and allow them to simply

represent their members. Require an annual audit and public reporting requirements to disclose how the unions are spending the cash

raised from fair share fees. Allow a religious exemption for public employees who have a religious objection to joining employee

organizations. Other states, like Ohio for example, have this in Code. Make the bullying and harassment of public employees who do not want to join the union illegal. Prevents fair share fees from being used for any political effort or lobbying effort germane or not germane to

collective bargaining. Makes it illegal for unions to recruit and/or sign up illegal aliens. Requires that any union making political contributions to Iowa political campaigns certify that all individuals

paying dues are American citizens. Allows non-union employees who are forced to pay fair share fees the right to view and examine union

finances related to the fair share fees. Replaces all references to “fair share” in the bill to “forced union”. Allows teachers to be represented by an organization other than ISEA. Amends the scope of negotiations section of the code to allow employers and unions to collective bargain

diversity policies, harassment policies, discipline policies, promotion procedures. Requires the union to set the fair share fee based on actual historical data instead of the whims of union

leadership.

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