FROM THE DESK OF REPRESENTATIVE DE BOEF

April 14, 2005

With only two weeks left in the 2005 Session, the activity level is beginning to slow down in the House chambers because most of our work is already done.  We have passed nearly all of our appropriations bills and are now debating the few bills that have come to us from the Senate.  The Senate has a great deal to accomplish in the remaining time.  Some people are saying we will be in Des Moines most of May as a result of this.  This creates a great hardship on a large number of our citizen legislators.  Many of them have other jobs which require their attention.  Some of them are teachers who are expected to be back in the classroom by the first of May and our farmers need to be able to put in the crops.  The per diem allowance runs out April 29^th; this allowance is to cover our housing and food expense.  The lack of money to cover these expenses tends to expedite the end of Session.  Only time will tell how it plays out.

One of the issues that we were asked to vote on this week was the proposal to give the Newton Motor Speedway an exemption from paying either $12.5 million in state sales tax or exemption from paying sales tax for 10 years – whichever comes first.  This would be sales tax on the proceeds earned through ticket sales, vendor sales and all money obtained on the grounds of the track itself.  The track is a proposal being made by private investors hoping to build the track in Newton.  At first glance it would appear is it is very unfair to approve this exemption.  It is important to note, however that this is state revenue Iowa would not be receiving if the track is not built. 

If the track is built, the effect on the state would be profound.  The total economic impact for construction and first year operations is $99 million.  The speedway can expect a figure of $67 million in total dollar impact of annual operations.  6,327 Iowa firms, 118,000 Iowa employees and 50 Iowa counties would feel the impact of the speedway.  The state would be able to expect over $3.3 million in annual sales tax receipts. 

The Newton Motor Speedway would provide a significant boost to the tourist industry.  For example, 40% of all attendees will come from outside Iowa’s borders accounting for 52% of all spending due to lodging, gasoline, etc.  The average Iowa tourist spend $50.00 per day.  In contrast, the average race fan spend $188.00 per day.  The bottom line is the speedway would have a widespread positive impact on Newton, the area surrounding and the state of Iowa as a whole.

Because this presents no risk to the state and because it is very specific to this one request at Newton, I joined with 80 of my colleagues to vote “aye” on it.  I prefer a system of tax incentives to encourage new attractions in the state over grant money being given up front.  If state money is committed upfront, the state is assuming some risk.  In this case the state is not.

Question of the Week…

The Governor is proposing the state spend $40 million on early childhood programs in the public school system.  The Republican proposal invokes spending $12 million which would go to local empowerment areas to administer to help with both private and public preschool programs.  Which proposal do you support?

I would appreciate your input.  My phone number at the Capitol is 515-281-3221, or e-mail me at betty.deboef@legis.state.ia.us.  I would welcome visitors at the Capitol, too!