January 24, 2008
Now that all the ceremonial activities are completed, we began to tackle the tough issues facing this session. One of the biggest challenges is the budget. The Governor’s budget proposals were laid out in a summary issued by the non-partisan Legislative Service Bureau. As I said last week, I am pleased the Governor pledged to ”limit spending, live within our means, and protect the cash reserves”.
What makes me skeptical is his budget proposes a 20% increase in the budget over a 2 year period. Part of the way he intends to raise revenue to meet the demands of this huge budget is to spend money that is supposed to go into the Senior Living Trust Fund (SLTF). This fund was funded by Federal money to help keep seniors in their homes instead of going into a nursing home.
In 2006 we passed a bill that requires paying back the whole $300 million that which was borrowed from the SLTF during tough times. Any surplus money that comes in “after the general fund expenditure limitation is met” is supposed to be divided between the cash reserve fund and the Senior Living Trust Fund. One troubling fact about the Governor’s proposal is this: the Democratic Leadership is saying they have put $182 million into this fund, the LSA summary shows there is only currently $75.9 million in the fund and the Governor’s proposal for FY 2009 show only $2.5 million left in the fund. It is very troubling that during a time when there was 10% growth in revenue the last six months, the Senior Living Trust Fund is still being raided.
One day this week we had a joint meeting with all members of the House & Senate Agriculture, Natural Resources, Economic Growth & Environmental Protection Committees. We attended a presentation by DUPONT/Pioneer concerning their investment in the bio-economy. One of the things they mentioned as essential for them to continue to invest in Iowa and provide a stimulus for our economy is to have a “business-friendly” climate in the slate in regard to tax and regulatory issues. They specifically stated that increasing the corporate income tax would be a detriment to them growing in Iowa.
Unfortunately, one of the proposals the Governor has proposed is changing the corporate tax so the state will realize an additional $75 million in corporate tax. It is interesting to note that according to a Jan. 21, 2008 article in Financial Week magazine, “during a hearing last week of the Joint Economic Committee, chairman Sen. Charles Schumer (D-N.Y.) said “targeted business tax cuts” could help stimulate job creation. Sen. Max Baucus (D-Mont.), who chairs the Senate Finance Committee, plans to hold two hearings on economic stimulus proposals later this week that may focus on such tax cuts. Congressional leaders plan to meet with administration officials Tuesday to hash out the details of Mr. Bush’s plan.”
In November 14, 2006, an editorial in The Wall Street Journal stated, “Everyone makes mistakes, but raising taxes amid a housing decline doesn't sound like brilliant policy to us.” Yet Governor Culver and Legislative Democrats are looking at a variety of targeted tax increases include raising corporate income taxes. Thus we Republicans are referring to this as the “anti-stimulus” package.
Congratulations to Sigourney Schools for being one of two schools in the state who have a new hybrid diesel/electric bus to help save the environment and tax dollars!
Visitors to the Capitol
Tim Rodibaugh with Doll Distributing of Grinnell. Phil Striegel on behave of Marriage and Family Therapists. Dan Taghon, Rick Danowsky, and Superintendant Todd Abrahamson with Sigourney/Keota Schools.
Question of the Week…
In August District Judge Robert Hanson ruled that Iowa’s current law defining marriage as a union between one man and one women is unconstitutional. Do you support a constitutional amendment defending the law he overruled?
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!