Vander Linden Capitol Update 3-19
Vander Linden
Key House GOP Bills
Collective Bargaining/Arbitration Reform
The playing field is wildly tipped in favor of public-sector unions and against the taxpayers. HF 549, sent to the Senate this week, begins to level that playing field for school boards and administrators in negotiating contracts with teachers unions and helping rein in costs and align them with revenue. School districts, like the rest of government, should not spend money it does not have. School districts need the tools to contain costs. The bill makes three changes to the binding arbitration section of the Iowa Public Employment Relations Act:
Private Sector Comparison: Requires an arbitrator to consider a private sector worker’s comparison of wages, hours, and conditions of employment when rendering an arbitration decision. Under current law an arbitrator can only look at a comparison of other public sector worker’s wages and benefits.
Ability to Pay and Tax: Prohibits an arbitrator to consider the ability of the public employer to levy taxes, and the ability of the public employer to finance economic adjustments. Currently arbitrators are required to consider the fact that the public employer can raise taxes to pay for increased wages or benefits.
Selection of a Midpoint: Allows an arbitrator to pick between the two parties final impasse item offers, rather than one or the other which is required by current law.
Democrats attempted to make the case the HF 549 continues a trend that attacks school district staff. The facts say the opposite: In the last ten years, teacher salaries have gone up 36.6%. Increasing teacher salaries has been a priority for Republicans in the House for over a decade. In addition to teacher salaries going up, the number of full-time teachers, administrators and total school employment are all up. The numbers below clearly show school district staff are NOT under attack.
• In the last ten years, student enrollment has gone down 1.3%.
• In the last ten years, the number of full-time teachers has gone up 2.4%.
• In the last ten years, school employment has gone up 4.3%.
• In the last ten years, the number of administrators has gone up 3%.
House Democrats also made the case that the current collective bargaining law is working great and doesn’t need to be changed. Yet it was Democrats who attempted to gut the collective bargaining law and our Right to Work law by passing the Forced Unionism bill in 2007 and the Open Scope Bargaining Bill in 2008. The Open Scope Bargaining Bill was so flawed Gov. Culver was forced to veto it over impending property tax increases.
Let the Kids Sled!
A winter without sledding is no winter at all. Unfortunately, several cities in Iowa have banned sledding and other activities on public property for fear of law suits. House File 570 aims to change that and allow municipalities to open public property to recreational activities without fearing frivolous lawsuits.
Under current law, municipalities have limited liability protection when certain activities are conducted on public property. These activities have a normal risk of injury and the law limits the liability of the city if negligence was not involved in the accident. These activities include skateboarding, in-line skating, bicycling, unicycling, scootering, river rafting, canoeing or kayaking. The current list did not include normal activities like sledding or tubing. House File 570 strikes the list and replaces it with the phrase “recreational activities” to ensure activities enjoyed by Iowans are included.
In addition to allowing recreational activities on public land, the bill allows public facilitates to be used for other recreational activities. This would include opening up facilities for recreational activities for children, senior citizens and others. While it seems common sense that Iowans should be able to use public facilities for recreational activities, the risk of lawsuits under current law was a large concern for many communities.
House File 570 passed the House with unanimous bi-partisan support, 93-0. The bill now moves to the Senate for further consideration.
House Ways and Means Passes $520 Million Income Tax Cut for Iowa Taxpayers
This week the House Ways and Means Committee passed
House Study Bill 215 out of committee with a vote of 13-11. The bill provides for an alternative income tax system with a 5 percent flat rate on all taxable income. It also provides for an increased standard deduction as compared to the current system as well as a complete exemption of all pension income from income tax. The result is a $521.4 million tax savings for Iowans.
The bill establishes a new calculation of base income. The calculation will start from the same place as the current system—Federal Adjusted Gross Income. From that number, the taxpayer makes the following adjustments:
• Subtract the standard deduction ($6,235/$12,470). This is more than triple the current system’s standard deduction ($1,920/$4,740).
• Subtract interest and dividends from federal securities (federal law).
• Subtract the amount of social security benefits taxable under section 86 of the Internal Revenue Code.
• Subtract the total amount of a governmental or other pension or retirement income including defined benefit or defined contribution plans, annuities, IRAs, plans maintained or contributed to by an employer, and deferred compensation plans or any earnings attributable to the deferred compensation plans. The current system does not provide for this full exemption of pension income— with the exception of military pensions. The current system provides for an exclusion of the first
$6,000/$12,000 of pension income.
After these adjustments are made—a tax of 5 percent is imposed on the balance (base income). The bill also provides that if a taxpayer makes the election for the alternative flat tax system—the taxpayer will not be able to claim any refundable or nonrefundable credits allowed in the current system with the exception of credits for withheld tax and estimated tax paid.
House Study Bill 215 states that the elderly taxpayer filing thresholds of $24,000 and $32,000 apply to the alternative flat tax system. The bill is retroactive to January 1, 2015 for tax year 2015 and beyond.
House Republicans continue to support a flatter, fairer, and simpler income tax system for Iowans. This legislation provides the opportunity for Iowans to choose the income tax system that gives them the greatest benefit. There are no losers—only winners. House Study Bill 215 now moves to the House floor for further consideration.
What Organizations Does the State of Iowa Belong to?
After last week’s examination of how much of the General Fund was being spent on organizational dues, some Iowans have asked what types of organizations the state of Iowa belong to. Here is a review of some of the groups receiving taxpayer money, as identified by the Legislative Services Agency last December.
LSA’s report to the Legislative Fiscal Committee points out some interesting situations where the state has multiple agencies making payments to the same organization. Both the State Auditor’s office and the State Treasurer’s office paid $3600 to the National Association of State Auditors. They each have paid $3700 in FY 2015 to this group. The Department of Agriculture and Land Stewardship paid $500 to the National Institute For Animal Agriculture in FY
2014. That is the same amount paid by the Department of
Homeland Security and Emergency Management Services.
And both the Department of Administrative Services and Department of Public Health paid $1000 to the Wellness Council of Iowa in 2014.
Organizational dues are sometimes funded out of multiple accounts in a single agency. An example of this is the Department of Education’s payments to the Council of State Chief School Officers. Beyond the General Fund, three separate accounts were tapped to pay this organization. In total, the Department paid the Council of State Chief School Officers $211,300 in FY 2014.
The Fiscal Committee report also discloses the difference in cost between similar bodies. For example, the state Banking Superintendent paid $93,027 to the Conference of State Bank Supervisors in Fiscal Year 2014. In the same year, the Superintendent of Credit Unions paid just $8,620 to the National Association of State Credit Union Supervisors.
State agencies have made payments to state organizations that lobby the Legislature. Examples of these would include the Alcoholic Beverages Division which made payments to the Iowa League of Cities. The Iowa Economic Development Authority paid $1500 to the
Professional Developers of Iowa in 2014 and $300 to the
Iowa Wind Energy Association. And the Department of Transportation paid the Iowa Bicycle Coalition $1000 that same year.
Membership in local chambers of commerce is another popular choice for many state agencies. In Fiscal Year 2014, the Department of Administrative Services paid $235 to the Des Moines West Side Chamber of Commerce. The Department for the Blind paid $225 to the Des Moines East and South Chamber. Vocational Rehabilitative Services made payments to eleven different chambers groups across the state. Both the Department of Natural Resources and Iowa Workforce Development have made payments to a number of chambers across Iowa over the past few years.
Another type of group frequently listed in the LSA report are national organizations of professional licensing boards. The Department of Commerce’s Professional Licensing Division and the Department of Public Health made payments in FY 2014 to numerous licensing groups ranging from the Association of Appraiser Regulatory Officials to the National Association of Barber Boards of America.
One organization that is frequently mentioned by some in the Capitol is the American Legislative Exchange Council. In FY 2014, the state paid nothing to this group. In fact, a payment to ALEC by the state of Iowa has not happened since Fiscal Year 2011 when the Legislature paid $6400. That is significantly smaller than the $153,427 paid that year to the National Conference of State Legislatures.
Iowans can review the full 20 page list of organizations (organized by agency) at this link:
https://www.legis.iowa.gov/docs/publications/IH/563044.pdf
Reviewing the exhaustive list of organizations the state is paying raises several questions. What is the policy to determine which groups the state will pay organizational dues to? Is there a policy to ensure that the state is not making multiple payments to one organization when one would be sufficient? And, is there an analysis to determine what value, if any, Iowa taxpayers are receiving for the payments to these groups?
