James Van Fossen - Iowa State House Representative

February 23, 2007 E-mail: jamie.van.fossen@legis.state.ia.us	Session Week 7 Fax: 563-355-9954
DESPITE WHAT HOUSE DEMOCRATS SAY, THE CIGARETTE TAX INCREASE WILL NOT BE SPENT ON HEATH CARE Both the Senate and House Democrats have introduced bills to increase the cigarette tax by $1 per pack, which is estimated to generate $30 million in FY 07 and $138.4 million in FY 08. Both of these bills 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. Joint budget targets are due for release this Friday, February 23. If Senator Gronstal’s prediction comes true (“The Governor will get 95 percent of everything he wants…”), we know pretty much what the General Fund spending increases for each budget subcommittee will be. The Governor estimates that the tax increase will generate $30 million in FY 07 and $138.4 million in FY 08 (the total of all of the Governor’s tax increases is $179 million in FY 08.) In FY 07, the Governor has requested $55 million in supplemental appropriations. However, only $8 million of this amount is for Medicaid and therefore for health care. If you credit the $8 million towards health care, that leaves $22 million to fund the new Power Fund, Targeted Small Business and utility costs. That would mean only 27 percent of the increase was going directly to health care. Here are the major health care spending increases in the Governor’s FY 08 budget recommendations: $60.8 million to Medicaid $3.5 million for HAWK-I $7.6 million for mental health $2.8 million for anti-smoking programs That equals $74.7 million. It is a stretch to say that the increase for Medicaid is funded by the cigarette tax increase because it is an entitlement that must be funded regardless of whether or not the Legislature raises taxes. For the sake of the argument, if one assumes that the $74.7 million goes to new health care spending, that is only 54 percent of the tax increase spent on health care. That leaves the other 46 percent to fund any of the following items: State Employee Salaries -- $120 million * K-12 school aid -- $95.2 million Teacher Compensation -- $70 million Property Tax Credits -- $40 million Commercial Property Taxes -- $25 million Board of Regents -- $25 million Department of Corrections -- $24.5 million Universal Preschool -- $20 million Child Care Assistance -- $18.6 million Community Colleges -- $12.4 million All other increases -- $48.5 million * The Governor has not delivered his salary bill but that is what is available under the spending limit Both of the bills being considered, SF 128 and HF 346, state that all of the new revenue from the cigarette tax increase is to be used for health-care related purposes. However, at some point they will have to not withstand this language in order to make their budget work. It is obvious that the cigarette tax is being increased by $1 per pack in order to balance the budget. The Democrats are planning a $560 million increase in the general fund budget. Without the cigarette tax increase, they cannot meet their goals. MENTAL HEALTH TROUBLE GROWING ACCORDING TO COUNTY ASSOCIATION SURVEY One of the major issues facing Iowa but not getting much attention in the media is the state’s mental health system. Since the implementation of Senate File 69 in 1995, the state and counties have worked to identify ways to maximize their combined funding to address the needs of Iowa’s most vulnerable citizens. Expanding Medicaid definitions to obtain federal matching funds, lowering county mental health fund balances, and other efforts were effective in preserving the system for over a decade. As we enter Fiscal Year 2008, the ability of these steps to control costs and maintain services has been outpaced by the demands on the system. With the increase in the minimum wage, expanded eligibility action is now required before Iowa’s mental health program is challenged in court or the system collapses.	How do we know we have a problem? Iowa State Association of Counties (ISAC) is currently conducting a survey of county Central Point of Coordination (CPC) administrators to determine how counties are handling the funding issues. So far, 69 counties have responded to the survey. For the current year, 14 counties reported that they had to reduce services from their county mental health plans. Some counties chose to provide additional local funds to supplement their mental health fund. According to the ISAC survey, 25 counties have done that in FY 2007. For FY 2008, the picture is even grimmer. Of the counties responding to the ISAC survey, 31 already have planned to reduce services in their mental health plan. Polk County has already stated that they will have to reduce the number of people they serve by almost 1,000. Linn County has said they will have to cut 700 off their programs. The options facing the state are very limited. ISAC and the state Mental Health Commission have asked the Legislature for a $23 million increase in funding for FY 2008. This would fund the allowed growth in the system and put back funds that former Governor Vilsack and then-DHS Director Jessie Rasmussen took out of the system during the budget crisis in 2001. The other option being advocated by some is to lift the cap on county mental health property tax levies. This was frozen when Senate File 69 was implemented and the state assumed half of the funding responsibility. MAJOR GENERAL DARDIS ADDRESSES THE LEGISLATURE On Tuesday, February 20, Major General Ron Dardis, the Adjutant General of the Iowa National Guard, addressed members of the Legislature, Governor, and other statewide elected leaders. He provided the State of the National Guard Address. Dardis began his address by reporting the Iowa National Guard is strong, quite possibly the strongest it has been in generations. He stated the Iowa National Guard set recruiting records by enlisting more new soldiers during that period than ever before. In fact, both the Iowa Army and Air National Guard remain over 100% strength. Dardis also thanked the Legislature for its commitment to the Guard’s infrastructure and facility programs. He stated the state has provided quality facilities in which our service members can work and train. The state dollars allow the guard to leverage federal dollars to upgrade and refurbish armories and maintenance facilities in critical locations around the state. He also addressed other resources. Dardis said the guard continues to have sufficient resources to meet the homeland security requirements despite equipment challenges cause by the global war on terrorism and service transformation. He told the body the Guard has adequate equipment to perform their 10 core capabilities for homeland security/defense missions. He did indicate they do have shortfalls but when it comes to having what they need to perform their state mission, he was confident they could get the job done. Dardis indicated over the next seven years their equipment would be replaced and upgraded. Dardis also addressed the global war on terrorism. He described the National Guard as a uniquely American organization, with a proud military lineage and strong community ties. He said the National Guard is a community-based organization with global responsibilities. According to Dardis, it plays a unique role in our national defense strategy. Due to the cuts to the size of the active duty military after the Cold War, coupled with federal mobilization and sourcing policies, the military has to rely on the reserve component forces or the National Guard forces. The Iowa National Guard has been at the forefront of the global war on terrorism. It has mobilized and deployed more than 9,500 soldiers and airmen – more than 100% of the Guard’s authorized strength. As part of his comments regarding the global war on terrorism, Dardis addressed the desire to limit deployments to 365 days, start to finish, including pre-deployment training and boots on the ground time. This is a change from the 18 to 24 month call-ups. There is also a goal to lengthen the time between mobilizations to a minimum of 60 months between mobilizations. Due to the change in policy, the clock has been reset for all units and all members are not eligible for immediate involuntary call-ups. This has resulted in this goal not being met. Finally, Dardis honored and thanked soldiers, families of soldiers, and support groups after his speech. Ways & Means Update Bills introduced in committee this week: HSB 225 – A study bill for increasing the earned income tax credit under the individual income tax and including a retroactive applicability date. HSB 226 – A study bill relating to classification of assisted living property for purposes of property taxation and providing an effective date. HF 403 – A bill for an act providing for an assessment on ethanol for export, and providing penalties. Bills passed out of committee this week: HF 346 – A bill for an act increasing the taxes imposed on cigarettes and tobacco products and providing for deposit of the revenue generated in the healthy Iowans tobacco trust, and providing an effective date.
Week in Review Archives 2007 Session 02-16-07 02-09-07 02-02-07 01-26-07 01-12-07 2006 Session 05-05-06 04-28-06 04-21-06 04-14-06 04-07-06 03-31-06 03-24-06 03-17-06 03-10-06 03-03-06 02-24-06 02-10-06 02-03-06 01-27-06 01-20-06 01-13-06 2005 Session 05-20-05 05-13-05 05-06-05 04-29-05 04-22-05 04-15-05 04-08-05 04-01-05 03-25-05 03-18-05 03-11-05 03-04-05 02-25-05 02-18-05 02-11-05 02-04-05 01-28-05 01-21-05 01-14-05 2004 Session 09-07-04 04-28-04 04-16-04 04-09-04 04-02-04 03-26-04 03-19-04 03-12-04 03-05-04 02-27-04 02-20-04 02-13-04 02-06-04 01-30-04 01-23-04 01-16-04 2003 Session 06-04-03 Special Session 05-30-03 Special Session 05-02-03 04-25-03 04-18-03 04-11-03 04-04-03 03-28-03 03-21-03 03-14-03 03-07-03 02-28-03 02-21-03 02-14-03 02-07-03 01-31-03 01-17-03 01-24-03 2002 Session 05-28-02 Special Session II 05-10-02 Special Edition 04-22-02 Special Session I 04-12-02 04-05-02 03-29-02 03-22-02 03-15-02 03-08-02 03-01-02 02-22-02 02-15-02 02-08-02 02-01-02 01-25-02 01-18-02 2001 Session 05-04-01 04-27-01 04-20-01 04-13-01 04-06-01 03-30-01 03-23-01 03-16-01 03-09-01 03-02-01 02-23-01 02-16-01 02-09-01 02-02-01 01-26-01 01-19-01 01-12-01 2000 Session 04-28-00 04-21-00 04-14-00 04-07-00 03-31-00 03-24-00 03-17-00 03-10-00 03-03-00 02-25-00