The Rozenboom Report – March 17, 2017
The Iowa Senate continued floor debate and voting on a number of bills this week including HF203, which allows state primary road funds to be allocated to secondary and municipal road systems in exchange for the state retaining all or a portion of federal aid road funds that would otherwise be allocated to counties and cities. This bill helps increase the efficiency of the planning and construction of city and county roads by eliminating federal requirements that are attached when federal money is used. This change will save our cities and counties 15-20 percent on road and bridge projects, thus allowing them to complete more projects. The counties and cities still receive the same total amount of money, just state dollars instead of federal dollars.
SF447 protects our state’s good livestock producers. The bill provides an affirmative defense and a cap on compensatory damages for animal feeding operations that comply with applicable federal or state statutes and regulations. This bill passed the Senate 31-18 because it protects the good producers who abide by our state and federal laws, while not offering protection to those who do not use best practices.
Senate File 404, known as the ‘Right to Try’ bill, allows a person with a terminal illness to have the opportunity to use treatments that are currently being evaluated, but are not yet FDA approved, that could potentially save their life when all other treatments have failed. Eligible patients have a terminal illness, have tried and failed all other treatment options approved by the FDA, have a recommendation from their physician for a drug or product, have given informed, written consent, and have documentation from their doctor stating the individual meets these requirements. The bill passed the Senate unanimously.
This week the Revenue Estimating Conference projected an additional reduction of state revenues for fiscal year 2017 of $131 million, compounding the budget problems identified by the December REC estimates. The December forecast forced the legislature to make painful cuts of $118 million for FY17. This latest revenue report forces us to dip into the state’s reserve funds to fill the budget gap for the rest of the fiscal year. With only three months left in this fiscal year, any further cuts would cripple our schools, public safety, and many other essential services.
As long as the price of corn, soybeans, and other farm commodities remain below the cost of production for Iowa farmers our state revenues will continue to lag. This makes it even more important that we focus on policies promoting growth all across Iowa. As we move forward to crafting our budget for the next fiscal year, we must continue to look at all aspects of government spending and how we will spend the taxpayer’s dollar wisely. We must look at tax credits and how we can streamline government services in our quest to put our state on better financial footing and responsible budgeting.
One of the first five bills we introduced in January was a provision that would add the 99 percent expenditure limitation to the state constitution. Though state law does require the legislature to spend no more than 99 percent of anticipated revenues for the next fiscal year, this amendment to the Iowa Constitution would help ensure the state meets its financial obligations.
Why is a constitutional amendment necessary if this practice is currently in the Iowa Code? Well, this year’s budget problems are a classic example of what could have been avoided with this constitutional amendment in place. Past legislatures circumvented the 99 percent expenditure limitation three times (FY 2006, 2007, and 2009) when it used the March REC estimate, which was more than the December estimate, contrary to law. If this constitutional amendment had been in place before, the $927 million budget surplus of just four years ago could not have been squandered as it was.
Senate Joint Resolution 9 cracks down on spending by capping the rate of spending growth, prohibiting the legislature from circumventing the law, and by eliminating the surplus from calculation of the expenditure limitation. Putting the 99 percent expenditure limit into the state constitution also limits the increase in spending from year to year. This legislation allows state spending to grow by no more than 4 percent than the previous year’s net revenue estimate, which places spending more in line with historic revenue growth.
Approving this constitutional amendment can give Iowans the sense of certainty they desire when it comes to investing in our state and creating jobs. It also provides much-needed predictability for our budget and helps avoid financial situations like we currently face. SJR9 was approved in the Iowa Senate by a vote of 38 – 10, and now moves to the House. Before SJR9 becomes part of Iowa’s constitution, it must also pass the 88th General Assembly in 2019-20, and be approved by a vote of all Iowans.