Vander Linden Capitol Update 1/15/2015
Vander Linden
December Revenue Report Shows Growth
Iowa’s tax receipts experienced a major rebound in revenue growth during December, according to the Legislative Services Agency. State revenue in December was $109.8 million higher than the amount taken in during December 2013. This increase raised the revenue growth through the first six months of Fiscal Year 2015 to 5.8 percent. The state’s revenue growth for the first six months of the year has been indicative of Iowa’s strong economic position currently.
Personal income tax collections grew by $49 million in December, an increase of 16.8% over December 2013. The strong December numbers raised the fiscal year growth in personal income tax to 5.4 percent, just slightly below the Revenue Estimating Conference’s projection of 5.7 percent growth.
Sales and Use tax collections also experienced a strong month. December revenue in these categories grew by $46.7 million over the previous year, an increase of 27.5 percent. Through the first six months of FY 2015, Sales and Use tax receipts have grown by 5.8 percent. This is stronger growth than what the REC has projected for the year, setting Sales and Use Tax collections 4.4 percent higher than FY 2014.
Corporate income tax also experienced growth for the month. This category collected $12.3 million more than December 2013, which is an increase of 17.5%. Through December, corporate collections trailed FY 2014 by 1.1 percent. But this gap, created by an accounting issue at the start of FY 2014, has been closing over the past few months. The REC forecast for corporate tax revenue is growth of 3.8 percent in FY 2015.
A sizable portion of the revenue growth in December was due to timing issues. November’s revenue growth was smaller than projected due to one less processing day for the Department of Revenue. That lost processing day was picked up in December. According to LSA’s analysis, approximately $42 million of the revenue growth last month came from the additional processing day. Of this amount, $16 million was personal income tax revenue and the rest came from sales and use tax collections.
While tax refunds increased during December, overall refunds continue to lag behind FY 2014’s pace. Through December, tax refunds were down 3.9 percent.
Internet Access Takes Center Stage In Washington and Des Moines
President Obama unveiled a series of measures this week aimed at making high-speed Internet access cheaper and more widely available. His announcement, made in Cedar Falls, focused chiefly on efforts by cities to build their own Internet networks as competitive alternatives to major web providers.
The president said he’ll urge the Federal Communications Commission to help neutralize state laws that effectively protect established Internet providers against municipal networks that want to build and offer services. Federal agencies will also expand grants for both municipal and rural providers.
Wednesday’s speech opens a different front in another issue that’s before the FCC: net neutrality. The president’s communique to the FCC marks his second since November when he asked the agency to apply strong net neutrality rules on Internet providers that would ban them from charging different prices for high-content web traffic from companies like Netflix. The video streaming service also urged the FCC last year to preempt the kinds of state laws that prevent municipal Internet networks from coming online in places like Colorado, for example, where a city must hold a successful referendum before undertaking such a project.
Cedar Falls is one of many cities across the county that have built their own publicly operated network, and a high percentage of the city’s households are subscribers. Nine Iowa cities offer similar services.
FCC Chairman Tom Wheeler wrote last year that the public interest would be served if the FCC moved to “preempt state laws that ban or restrict competition from community broadband.” The FCC’s congressional charter gives it the authority to stimulate broadband deployment, a broadly worded commission that could also be used to authorize its equally controversial net neutrality rules.
Meanwhile, existing Internet providers are pushing back. In August, AT&T warned the FCC that public investments in municipal networks will only diminish private-sector investments that could both expand and enhance web access. And any move from the FCC to neutralize state laws would almost surely meet fierce–and perhaps successful–legal resistance from established providers.
President Obama’s visit coincides with the U.S. Department of Agriculture announcing a multi-million dollar loan program to help rural carriers build broadband in unserved or underserved areas. It also coincides with Governor Branstad’s Connect Every Acre initiative, which he announced during Tuesday’s Condition of the State Address. His proposal would provide a 10-year property tax exemption for broadband infrastructure in place on or after July 1, 2014. A $5 million grant program would also help spur broadband access to farms, school and rural communities.
State of the Judiciary
On Wednesday, Chief Justice Mark S. Cady, of the Iowa Supreme Court, delivered the State of the Judiciary. Each year the Chief Justice is required to deliver this speech to the general assembly. In the address, the Chief Justice may express what he believes is important for Senators and Representatives to know about the Court system.
Chief Justice Cady used his State of the Judiciary to highlight the goals and successes of the judicial branch. Those goals include; protecting Iowan’s children, providing full time access to justice; operating an efficient and full services court system; providing faster and less costly resolutions of legal disputes; remaining open and transparent; and, providing fair and impartial justice for all.
The Chief Justice focused on the ways in which courts are working for all Iowans. From specialty courts that focus on families to easier access to court documents through technology. Iowa Courts, now more than ever, are more accessible to all.
Keeping the courts open and accessible has been a major focus for the legislature. With additional funding appropriated in the past several years, Court Houses in Iowa were able to expand their hours and ensure better access to justice, no matter where a person is in the state, through the use of the Electronic Data Management System (EDMS). As of today, over 4 million documents have been uploaded on the EDMS system.
Iowa Courts are continuing to focus on providing justice for all. Justice Cady promised that members of the Judicial Branch will be reviewing specialty courts, sentencing and other procedures in order to ensure all Iowans are treated fairly.
With the conclusion of the State of the Judiciary, members of the Justice Systems Budget Subcommittee will begin meeting to evaluate the funding for the Courts for the 2016 budget. This Subcommittee will work to ensure the Courts receive appropriate funding to continue their work.
Opening Week Comments
Monday was the start of the 86th General Assembly and the beginning of my third term. This week has been filled with speeches including House Speaker Kraig Paulsen, Majority Leader Linda Upmeyer, Chief Justice Mark S. Cady and Governor Terry Branstad. Each laid out their legislative priorities and expectations for the upcoming session. Although discussion has begun on many of these priorities, there is a lot of work to do.
I am once again chairing the House State Government Committee. I am also on the Ways and Means Committee, Commerce Committee, Administration Rules Review Committee and the Administration and Regulation Budget Subcommittee.
Please feel free to contact me any time with any questions or comments you may have throughout the session.
