Government : Statehouse News

Just reminder before we get started, the Legislative Listening Post is in Shellsburg's American Legion, this coming Saturday at 1:30. Be there or be square.

The Tax Coupling Bill

The tax coupling bill has an impact on the FY 2016 ending balance and the FY 2017 on-going revenue levels. Any agreement will impact discussions on school aid and budget targets.

The Governor has already recommended a plan for coupling that has a negligible effect on FY 2016 revenue while adding an additional $48.5 million to FY 2017.

One thing that can change the level of the state’s ending balance and the amount of on-going General Fund revenue is the coupling bill. The coupling bill updates Iowa law to conform with certain tax changes enacted by Congress. It is always important that this bill is passed quickly as tax preparers and accountants need to know what deductions Iowans can take on their 2015 income taxes.

The Governor’s plan is to not couple at all for tax year 2015. That means that taxpayers would not be able to take advantage of any of the tax extenders Congress just passed that have an Iowa component when they do their taxes this April.

The Governor then recommends permanently coupling with the IRC in tax year 2016 with the exception of Section 179 expensing or bonus depreciation. The Governor’s plan permanently leaves out those provisions. Section 179 expensing is an accelerated depreciation mechanism for business purposes and bonus depreciation is something similar to that except for larger expenses. The Governor’s recommended coupling provisions are estimated to have a negligible impact on FY 2016 General Fund revenues while increasing FY 2017 General Fund revenues by $49.2 million.

The House approved a different plan on Thursday, Jan. 28. The House plan couples with everything except bonus depreciation in tax year 2015. It also does not add the permanency of the Governor’s plan. There is a $95.7 million impact on FY 2016 revenue/ending balance. That money goes directly to taxpayers. Additionally, $86.5 million is added to FY 2017 on-going revenue with roughly $55 million of that available for appropriation under the state’s expenditure limitation law.

Senate Democrats have given no indication on their plan for tax coupling which complicates and slows down the budget process this session.

DNR Touts Water Quality Success in 2015

On Thursday, January 28, 2016, the Iowa Department of Natural Resources (DNR) issued is electronic environmental issue newsletter ‘EcoNewsWire” which contained an article announcing that efforts of Iowans in 2015 to improve Iowa’s lakes, rivers and streams have resulted in success stories across the state, and more efforts are underway for 2016. Working with groups statewide, including the Iowa DNR’s Watershed Improvement Program, Iowans are making changes on the land to improve our waters. The DNR works with other state and federal agencies to help Iowans organize local and regional watershed improvement efforts by providing technical and financial assistance to create long-term, comprehensive plans. With watershed management plans, local groups work with landowners and residents to make changes on the land in areas that can make the largest impact on water quality.

For example, Lake Darling in southeast Iowa is a whole new lake – and park – following a four-year, $12 million renovation. The lake was drained, the dam replaced and the lake size restored to 305 acres. The silt trucked out from the lake would cover a football field 12 stories high. This followed extensive work on the land by a large network of landowners and organizations coming together. Through a watershed project, they installed 162 conservation practices, from ponds and basins to terraces and soil-holding grasses, many stretching across property lines. The practices slow runoff from the land and filter out silt, nutrients and bacteria before they can reach the lake. With additional conservation work on state land, the practices have reduced the amount of sediment reaching the lake by 60 percent.

IDALS Releases Iowa Water Quality Initiative 2016 Legislative Report

On Thursday, January 28, 2016, the Iowa Department of Agriculture and Land Stewardship (IDALS) issued a press release in which Iowa Secretary of Agriculture Bill Northey highlighted the Iowa Water Quality Initiative 2016 Legislative Report during his presentation to the Agriculture and Natural Resources Appropriations Subcommittee.

The 8-page report provides an update on the $3.5 million made available for statewide cost share for water quality practices and on the 29 demonstration projects that were operating across the state last year to help implement and demonstrate water quality practices. The report also gives and update on Tracking/ Accountability and efforts by the Iowa Nutrient Research Center at Iowa State University. The Iowa DNR also provided an update on the efforts of point sources that is included in the report. During the hearing, Agriculture Secretary Northey also highlighted the $10 million request for the Water Quality Initiative would allow IDALS to continue offering cost share statewide to farmers trying new water quality practices, expand work in targeted watersheds to achieve measurable water quality improvements, and continue to develop new programs to help engage all Iowans in water quality efforts. IDALS received $9.6 million for the current fiscal year for the Water Quality Initiative.

A copy of the report can be found at www.IowaAgriculture.gov under “Hot Topics” or at http://www.cleanwateriowa.org/news-and-blog.aspx.

Last fall Northey announced that 1,800 farmers committed $3.5 million in cost share funds to install nutrient reduction practices in each of Iowa’s 99 counties. The practices that were eligible for this funding are cover crops, no-till or strip till, or using a nitrification inhibitor when applying fall fertilizer. Participants include 980 farmers using a practice for the first time and more than 830 past users that are trying cover crops again and are receiving a reduced-rate of cost share. Farmers using cost share funding contribute 50% or more to the total cost of the practice. In addition, 32 demonstration projects are now located across the state to help implement and demonstrate water quality practices. This includes 16 targeted watershed projects, 7 projects focused on expanding the use and innovative delivery of water quality practices and 9 urban water quality demonstration projects. More than 100 organizations are participating in these projects. These partners will provide $16.72 million dollars to go with the $11.11 million in state funding going to these projects.

Iowa Veterans Cemetery

You can tell the Iowa Veterans Cemetery is special when you first drive in. The picturesque and well-maintained cemetery not only serves veterans in Iowa, but heroes from around the country as there is no state residency requirement to be interred in the cemetery. Currently, the cemetery has burial space for up to 80,000 burials.

Groundbreaking for the cemetery occurred on Veterans Day in 2006. Construction began immediately thereafter and the cemetery was dedicated on July 3, 2008. At that time, over 1,000 veterans and dependents had already been determined eligible. Interments began on July 7, 2008.

The Iowa Veterans Cemetery is located approximately 10 miles west of Des Moines and runs south along Interstate 80 in Dallas County near Van Meter. More information on the cemetery and interment eligibility is available at: https://va.iowa.gov/vetcemetery/ eligibility_burial.html.

Mailing of Form 1099-G

Tax return season is upon us, and it is important to make sure the appropriate forms are obtained in order to properly file a return. A 1099-G is a form to report unemployment compensation as well as any state or local income tax refunds you have received that year. The Iowa Workforce Development (IWD) announced that they completed mailing 1099-G forms on January 26, 2016.

The 1099-G form includes any unemployment insurance benefits issued December 31, 2014, through December 30, 2015, and it also contains any federal and/or state taxes that were withheld. The Internal Revenue Service and the Iowa Department of Revenue were also provided 1099-G form information.

If you have changed your address since you last claimed unemployment insurance benefits, you need to update your mailing address with IWD. If you have not received your 1099-G form, please contact the IWD unemployment insurance customer service number at 866-239-0843 or email uiclaimshelp@iwd.iowa.gov to request a duplicate copy be mailed to you.

SAVE Bills Receive Action in the House

Several subcommittees occurred this week on bills dealing with the Secure an Advanced Vision for Education (SAVE) Fund, the statewide 1% (or 1-cent) sales tax that provides infrastructure dollars to school districts. (See the January 13, 2016 newsletter for more details on the fund). Set expire in 2029, extended this deadline is a priority for school districts and a number of legislators.

There are currently three competing plans that all involve extending the sunset, but each comes with different uses of the money:

The Governor’s Plan

The Governor has already stepped forward with a proposal for extension that he has labelled as one of the boldest proposals of his tenure. His plan diverts a portion of the estimated growth in the fund to be used for water quality purposes, guaranteeing the first $10 million of growth in each year to go to school districts first, with the remainder of the growth addressing his water quality plan. Details of the plan are still to emerge, and it has not received committee consideration to date.

The Ways and Means Committee Plan

Loosely titled, as the full Committee has yet to consider it, this plan is intended to take SAVE back to its roots, when it started as the SILO, School Infrastructure Local Option tax. SILO, also a 1% (1-cent) sales tax for school infrastructure, was a local option, decided on by the residents of the district. SILO was converted into SAVE and made mandatory state-wide in 2008. HSB 548 caps the SAVE fund at the current per pupil level and requires the additional generated revenue be used for property tax relief. Additionally, projects over $1 million in cost require a vote of the people, requiring tax-payer approval of big projects. The bill had a subcommittee early in the week with intention to continue meeting on future dates.

The Education Committee Plan

Loosely titled, as the full Committee has yet to consider it, this plan keeps the funding in the education world, but opens up the fund to address several inequities that exist in education funding. HSB 549 and HSB 551 both allow the fund to be used by school districts to address:

1. transportation costs (some districts spending up to $1000 per child to transport),

2. a varying level of spending authority district-by-district in which some districts have a higher District Cost Per Pupil (DCPP) allowing them to generate more funding per student than other districts

and districts with high property taxes due to low property value in the district, causing some districts to have higher property taxes to generate the same revenue as a district with lower taxes due to higher property value.

HSB 549 caps growth on the SAVE fund, meaning district still receive the same per pupil amount, while sending the new growth to fund these inequities. HSB 551 allows the growth in the fund to continue but adds these inequities as additional allowed expenses at the district level as determined locally.

Both bills had a subcommittee earlier this week and passed out on party lines. They are expected in committee later this week.

Regardless of which plan passes the Education Committee the bills will be sent to the Ways and Means Committee for consideration before Floor debate, making the Ways and Means Committee the ultimate decider on which plan will move forward this session.

Wellcare Appeals Decision in District Court

WellCare is one of the four companies that were awarded a state contract to manage Iowa’s Medicaid program. The WellCare contract was thrown out after the Director of the Department of Administrative Services (DAS) issued a decision in December in which she said the the company failed to disclose certain fines and litigation in their bid to the Department.

WellCare went before District Judge Robert Blink on Monday to appeal the DAS decision. Lawyers argued that the information in question was given to the evaluation committee after the proposal was initially submitted. They argued that the Director of the Department of Human Services, Charles Palmer, knew about Wellcare’s fines and litigation and chose not to disqualify them from the process.

The managed care program is set to go live on March 1, 2016. Judge Blink expects he will issue his ruling before that time.

Help Combat Student Hunger in the Summer

The Department of Education put out a call this week across the state to find sponsors for their Summer Food Service Program, a program which provides nutritious meals and snacks to children in low-income areas during the summer months.

It’s a great opportunity for families in need of such a program to take advantage of the opportunity. Too many Iowa children are likely going without proper nutrition when the final school bell rings at the end of the year. The Department estimates that of the 200,000+ kids eligible for free and reduced price lunches, 90% don’t have access to meals when school ends.

The program is becoming more widely available, but this call is an effort to increase the availability even more as the program still remains vastly under-utilized. From 2002 to last year the number of kids served through the program has increased from around 6,500 to 21,000. But those children are only a small percentage of the approximately 200,000+ eligible.

Sponsoring means acting as the organizer for the sites. Sponsors must be able to provide a capable staff, supervision and food service capabilities. Typical sponsors include public and private nonprofit schools, local government agencies, and private nonprofit organizations with serving sites located in schools, churches, community centers, parks, libraries, housing complexes, or camps.

The summer meals program is funded through the U.S. Department of Agriculture. Funds are available to offset the cost, which is based on a per-meal reimbursement. Reimbursement funds can be used for both operational and administrative expenses.

A free informational webinar on sponsorship, for those interested, will be held on Tuesday, Feb. 18, from 1:30 to 2:30 p.m. and can be found on the DE’s site here: https://www.educateiowa.gov/event/summer-food-service-program-informational-webinar

IWD Launches Redesigned Data and Workforce Information Website

The Labor Market Information (LMI) Division of Iowa Workforce Development (IWD) has launched a redesigned website to provide data and information related to Iowa’s labor market and workforce. This redesigned site is replacing the current labor market information site, IWIN (Iowa Workforce Information Network) as of January 31, 2016.

The new website (iowalmi.gov) will contain, but is not limited to, information about the following areas: employment; unemployment; wages; industry and occupational employment; industry and occupational projections; unemployment insurance statistics; Laborshed Studies; employ-er surveys; education outcomes; career information; and other labor market related publications.

Tax Fraudsters Beware

The Iowa Department of Revenue estimates they had more than 10,000 fraudulent tax returns last year. Of those, more than 2,000 were for refund claims using identities stolen from Iowans. To combat that, this tax season the department will up their technology game to track fraud, validate bank accounts, and share information with the IRS and other states.

Iowa was not alone last year in reporting a slew of fake state returns filed through TurboTax software preparation. Many states reported that thieves had stolen 2013 tax returns to help them file a fraudulent return in 2014.

Many of the new anti-fraud procedures came out of a security summit the IRS hosted where government officials, tax software companies, and state departments decided to really work together. Iowa and other states are strengthening measures to keep taxpayer information se-cure. Iowa is also restricting refunds to prepaid cards because of their known preference by fraudsters due to the difficulty in tracking them.

The Iowa Revenue Department has added six temporary employees to assist with phone calls during tax season, which is well underway.