James Van Fossen - Iowa State House Representative

Jamie Van Fossen

The Week In Review
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April 7, 2006 E-mail: jamie.van.fossen@legis.state.ia.us	Session Week 13 Fax: 563-355-9954
IOWA WORKFORCE DEVELOPMENT SCANDAL ROCKS STATEHOUSE The joint Government Oversight Committee, in conjunction with the Economic Development Appropriations subcommittee, is addressing recent concerns over activities at Iowa Workforce Development (IWD) and a subcontracting regional agency called Central Iowa Employment and Training Consortium (CIETC). The state Auditor’s Office has been investigating the matter with the help of IWD whistleblower Kelly Taylor. Taylor is a budget analyst with IWD and is in charge of auditing the regional subcontractors for IWD; he will appear at the hearing scheduled for Thursday. Allegations of misappropriation of federal funds as well as IWD preferential treatment were brought to the forefront by Taylor. Taylor discovered after little effort that not only were the CEO Ramona Cunningham and COO John Bargman of CIETC receiving astronomical salaries compared to their other regional counterparts, but were also receiving bonuses approved by CIETC board director Archie Brooks that brought Cunningham’s salary to $795,384 and Bargman’s salary to $767,575 over the past two and-a-half years. Auditor David Vaudt presented his report to the Government Oversight committee on Tuesday. The committee was allowed to ask questions of the Auditor to clarify the origin of the information and publication of the report. Government Oversight Chair Rep. Dwayne Alons requested that Cunningham and Brooks appear at the next meeting. Vaudt indicated that the state taxpayers might be on the hook for the $1.8 million in salaries and bonuses to CIETC leaders. The money involves federal job training funds and excessive use of those funds for salaries and bonuses is a disallowed use of the money. Late last evening, Co-Chair of the Oversight Committee Sen. Mary Lunby and Co-Chair of the Economic Development Budget Subcommittee Sen. Pat Ward delivered a letter to IWD requesting that IWD sever the contract with CIETC and that Barto be immediately placed on administrative leave. Meanwhile back at the CIETC offices, television news crews spotted Cunningham packing up her office while wearing a wig to disguise her appearance. Today, Director of Iowa Workforce Development Rich Running and Deputy Director and Legislative Liaison Jane Barto appeared before the committee. Running dismissed the letter from Sen. Lunby and Sen. Ward and indicated there would not be any disciplinary action taken against Barto. Barto defiantly answered questions regarding her role in the fiasco and instead attempted to shift any blame for lack of oversight to the State Auditor. CEO Ramona Cunningham and COO John Bargman failed to appear before the committee today. The Oversight Committee is considering using it’s subpoena power to compel Cunningham and Bargman to testify. Strangely, the Governor has been silent in regards to Running’s future at the agency. Running claims, he was unaware of any wrongdoing regarding CIETC; he plans no action against Barto and has not indicated what, if any, disciplinary action he plans to take. Running is a Vilsack appointee and a former state legislator with strong organized labor ties. The Government Oversight committee will continue to meet regularly with in conjunction with the Economic Development Appropriations subcommittee and the public. The budget subcommittee is the panel that is in charge of dispersing general fund monies to Iowa Workforce Development. UPDATE: Top Iowa Workforce Directors Resign Des Moines (KCCI-TV) -- Gov. Tom Vilsack announced in a news conference on Wednesday night that both the Iowa Workforce director and its deputy director have resigned. "Effective immediately, I have asked for and have received director Rich Running's resignation. I have also accepted deputy director Jane Barton’s resignation, and I'm announcing today that interim director Dave Neil will take over the responsibilities at the Workforce Development," Vilsack said. Troopers Seal off Workforce Development Building Des Moines (KCCI-TV)-- The scandal roiling through a state-affiliated employment agency deepened early Thursday morning as state troopers surrounded dumpsters behind the offices of the Central Iowa Employment Training Consortium. CIETC is a non-profit agency housed inside the state's Workforce Development offices near the Statehouse. An anonymous caller to KCCI-TV said a secretary to former Workforce Development deputy director Jane Barto was inside the offices at 4 a.m. Thursday dumping documents. Capitol police and state troopers arrived and have now confiscated one Dumpster outside the offices and several inside. NewsChannel 8 witnessed troopers interviewing a woman who was in tears.	SMALL EMPLOYMENT HEALTH INSURANCE BILL MOVING TO THE FLOOR The House is nearing debate on one of the most discussed issues of the 2006 session – finding ways to help small employers provide affordable healthcare for their employees. Since 1991, most employers with 2-50 employees have had their health insurance through small group coverage. Unfortunately for many small businesses with 2 to 50 employees, the requirement of being in small group coverage has priced them out of the healthcare market. Business groups have advocated for a change that would allow them to offer association health plans to their members. By bringing together the employees of a number of businesses, these groups believe that they would see lower growth in costs. There are a few existing association health plans in the state. The most often cited ones are offered by the Iowa Bankers Association and the Auto Dealers Association. While their plans have seen price increases in the past, they have been less than what other small businesses have experienced in small group coverage. The insurance industry is very wary of allowing association health plans to once again be offered in Iowa. They feel that allowing an expanded use of association health plans would allow for cherry picking and encourage younger, healthier employees to forego coverage. Another major concern is that small employers leaving small group will drive up the cost for remaining employers. House File 2790 gives bona fide associations the ability to establish an association health plan, if they and their members meet a series of requirements. The bill also imposes time requirements for participation in the plans, so that an employer does not bounce back and forth from small group and the association plan based on that year’s cost. One area of agreement is the need to provide additional incentives for wellness efforts. House File 2790 includes new language to encourage Iowans to utilize wellness initiatives offered by their employers and their insurers. Insurance companies would be allowed to pass along savings generated from wellness initiatives to the employers paying the premiums. ACTUAL REVENUE SLIGHTLY ABOVE NEW REC ESTIMATE On April 3, Fiscal Services released the revenue figures through the first three quarters of the fiscal year. Despite the Revenue Estimating Conference (REC) recently increasing the revenue estimates, revenue continues to exceed expectations. Year-to-date revenue through the first three quarters of the fiscal year increased by $90.6 million, or 2.3 percent, compared to actual FY 05 and is above the REC annual estimate of $115 million (2.1 percent). The major general fund revenue components continued to show growth through March. Personal income tax receipts were up 5.1 percent compared to FY 05 when the reduction in income tax withholding is taken into account. This is on top of 9 percent growth in personal income tax receipts in FY 05. Sales and use tax receipts were up $58.8 million, or 4.3 percent compared to FY 05. Corporate income tax receipts were up $25.6 million, or 14.6 percent compared to FY 05. Other receipts were up $3.8 million (19.6 percent) compared to FY 05. The strong revenue growth is expected to continue in the final quarter of the fiscal year and should tax refunds come in lower than estimate (which is a strong possibility given the reduction in withholding), that would increase the ending balance for FY 06. Under the March 24^th estimate, the House GOP budget will fund the property tax credits at $160 million and deposit $21.5 million into the Cash Reserve Fund (filling the CRF to 7.5 percent) and $21.5 million into the Senior Living Trust Fund (SLTF). Any additional excess above the REC estimate will be split between the SLTF and the Economic Emergency Fund. Under the current estimate, the EEF will have $24 million in it, which leaves it roughly $100 million short of being filled. These numbers are proof that the economy continues to be strong. However, due to uncertainty about the economy in future years and the possibility of a pandemic flu outbreak, these funds need to be saved in order to deal with any potential economic problems that may occur going forward Ways & Means Update Bills introduced in committee this week: HSB 776- An Act relating to the policy and technical administration of the tax and related laws by the department of revenue, including administration of and tax exemptions under the income, sales, use, and property taxes, updating the streamlined sales and use tax, and including effective and retroactive applicability date provisions. HSB 777- An Act relating to electronic technology in county government and providing a fee. HSB 778- An Act relating to school funding by increasing the foundation property tax levy, increasing the regular program foundation base, providing on-time funding for school districts with increasing enrollment, replacing the local option sales and services tax for school infrastructure purposes with an increase in the state sales and use tax rates, making an appropriation, and including an effective date provision. Bills passed out of committee this week: HF 2584- An Act relating to devices used for weighing and measuring, by providing for the regulation of the devices, motor fuel, and persons who service the devices, and providing for fees and penalties. HSB 776- An Act relating to the policy and technical administration of the tax and related laws by the department of revenue, including administration of and tax exemptions under the income, sales, use, and property taxes, updating the streamlined sales and use tax, and including effective and retroactive applicability date provisions.
Week in Review Archives 2006 Session 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