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IOWA HOUSE IS SET TO DEBATE TOUCHPLAY NEXT TUESDAY
The Iowa House is set to take up the controversial issue of TouchPlay this
Tuesday, with a serious debate expected on the future of the machines.
The bill,
House File 2627, completely bans the TouchPlay machines, forcing them out
within 30 days of the bill’s enactment. The same bill unanimously passed
through a Senate committee.
There is an amendment to the bill that would revoke the Lottery’s status as a
charter agency, which grants the Lottery a broad independence, and would instead
put it under the Department of Inspections and Appeals. The amendment would
also place certain restrictions on the machines, allowing them only at places
with a liquor license or beer permit – meaning they can stay in convenience
stores, restaurants and bars, but must be 20 feet from an ATM and only one
machine allowed per location.
An amendment to that amendment completely bans TouchPlay machines effective
July 1. By amending the amendment, the Iowa House of Representatives can now
have a clean, up-or-down – no amendable – vote on whether or not to eliminate
the machines from Iowa’s landscape.
This is obviously a very contentious issue at the Statehouse, and I would
appreciate hearing your opinion on the matter.
HOUSE APPROVES SIX BUDGET BILLS, STAYS ON SCHEDULE TO PASS SUSTAINABLE
BUDGET
This week the House approved six appropriations bills: Agriculture and Natural
Resources, Economic Development, Judicial Branch, Administration and Regulation,
Justice System and Transportation. This keeps the House on schedule to approve
a sensible and sustainable budget by April 18.
On Monday, the House approved
HF 2540 (Agriculture and Natural Resources),
HF 2359 (Economic Development) and
HF 2557 (Judicial Branch).
HF 2540 appropriates $36.9 million to the Department of Natural Resources
and the Department of Agriculture and Land Stewardship, which is an increase of
$100,000 over FY 06.
HF 2359 appropriates $30.8 million to the Department of Economic Development
and Workforce Development, which is an increase of $365,000 over FY 06.
HF 2557 appropriates $125.3 million to the courts, which is no change
compared to FY 06 (The courts’ salary increases will be handled in a separate
bill).
On Tuesday, the House approved
HF 2521 (Administration and Regulation),
HF 2558 (Justice System) and
SF 2232 (Transportation).
HF 2521 appropriates $82.2 million to several state agencies, a decrease of
$3.3 million compared to FY 06.
HF 2558 appropriates $449.2 million for public safety, prisons, Community
Based Corrections and indigent defense, which is an increase of $12.8 million
over FY 06.
SF 2232 does not appropriate any general fund monies, but does appropriate
$305.3 million from the Road Use Tax Fund for highway construction, an increase
of $3 million over FY 06. The bill also contains compromise language on the
drivers’ license station issue in Polk County.
Next week, the House will approve
HF 2527 (Education),
HSB 764 (Health and Human Services),
HSB 765 (Healthy Iowans Tobacco Trust) and
SF 2273 (Supplemental Appropriations bill for FY 06).
The approval of these six bills, combined with the approval next week of four
additional bills, means that the House will be on schedule to have all of the
budget bills out of the House by March 17. The only two remaining bills at that
point will be the Standing Appropriations bill and the Rebuild Iowa
Infrastructure Fund (RIIF) bill. Those will be the last two bills the House
approves, not counting bouncing bills.
Abiding by the timeline established in December means that we are on schedule
to begin talks with the Governor and the Senate and get the budget approved and
session adjourned by April 18.
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STRONG
REVENUE GROWTH CONTINUE THROUGH FEBRUARY
On Tuesday, March 1, Fiscal
Services released the revenue figures through the first eight months
of the fiscal year. The strong revenue growth of the first half of
the fiscal year continued in February.
Year-to-date revenue growth was $87.9 million, or 2.5 percent
above the first eight months of FY 05. However, this does not
include $21 million of sales tax receipts that were pushed from
February 28 to March 1 due to a processing error. If this $21
million had been counted in the February receipts, gross revenue
would have grown by $109 million, or over three percent growth
year-to-date. Due to this processing mess, the $21 million will
show up in the March gross sales and use tax receipts.
The December Revenue Estimating Conference (REC) estimate for the
entire fiscal year is $81.4 million, or 1.5 percent above FY 05.
Since the REC estimate has already been exceeded, it would take
negative revenue growth over the remaining four months to not exceed
the REC estimate. There is plenty of evidence to suggest this won’t
happen.
Through the first eight months of the fiscal year, personal income
tax receipts were down $3.7 million, or 0.2 percent. However, this
figure takes into account the change in the income tax withholding
tables. When that decrease is taken out (because it will come back
to the state in the form of payments with returns or lower tax
refunds), personal income tax receipts are up 5.6 percent. That is
impressive because that growth is on top of the eight percent
increase in personal income tax receipts in FY 05. It is further
proof that Iowa’s economy is still running strong.
In addition, sales and use tax receipts increased by $48.3
million, or 3.9 percent compared to FY 06. However when the $21
million that should have been deposited on February 28 is included,
it increases the growth to $69.3 million, or 5.6 percent above FY
05. Corporate income tax receipts are up $21.5 million, or 14.2
percent compared to FY 05. Other receipts and taxes are $22 million
above FY 05.
The next REC meeting is scheduled for March 24. Due to all of
this good economic news, it is likely that the REC will increase its
revenue estimate for both FY 06 and FY 07. Even if it does not
increase the estimate for FY 07 (which is currently three percent
above FY 06), just increasing FY 06 will cause FY 07 to increase due
to the expansion of base revenue. This is because FY 07 will be a
three percent increase over a larger amount of revenue in FY 06.
This is both good news and bad news. The good news is that the
increased revenue in FY 06 will be used to fund the property tax
credits and repay the Cash Reserve Fund and Senior Living Trust
Fund. The bad news is that the Governor and the Senate Democrats
will want to increase the FY 07 budget by ignoring the expenditure
limitation law, which says the Legislature must use the December REC
estimate to build its FY 07 budget. Unfortunately, this law was
bypassed last session so the precedent has already been set.
Once again, it will be up to House Republicans to say no to
demands for increasing the size of the budget pie. The budget
targets allow room to negotiate within the $280 million increase in
spending over FY 06 and any new spending should be added only if
something else within the $280 million is reduced.
Ways
& Means Update
Bills introduced in committee this week:
HF 2529 -An Act authorizing small employer
association health benefit
plans, a small employer health care
tax credit, wellness
incentives, a small employer catastrophic risk
program,
providing an appropriation, and providing
for effective,
retroactive, and applicability dates.
HF 2568- An Act providing for the retention of fees by licensing boards,
and the bureau of radiological health, under the purview of the Iowa
department of public health, providing for the non-transferability of
specified fees, and providing effective dates.
HF 2647- An Act relating to franchises for the provision of cable service
or video service including providing for fees and providing an effective
date.
HF 2688- An Act relating to the issuance of permits to carry weapons.
SF 2147- An Act relating to the requirement of location as an eligibility
criterion for businesses under the enterprise zone program and providing
an effective date.
SF 2183- An Act allowing cities and counties to create enterprise zones
near modes of transportation.
Bills passed out of
committee this week:
HF 2460- An Act relating to
a targeted jobs withholding tax credit to be
used for funding improvements in certain urban renewal areas.
SF 2147- An Act relating to the requirement of location as an
eligibility criterion for businesses under the enterprise zone program
and providing an effective date.
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