Hite Capitol Update: February 28, 2019

Dustin Hite Capitol Update – February 28, 2019

by Dustin Hite

Another busy week has flown by in Des Moines. Along with legislation, we released more budget targets and furthered our commitment to SAVE.

The House passed an extension of SAVE last session, but it did not move forward in the Senate. Extending SAVE is a top priority for House Republicans this session, and we have already begun advancing legislation that would do this through 2050. The bill, House File 546, has passed both the Education and Ways & Means committees overwhelmingly and in a bipartisan fashion.

SAVE is important for a number of reasons including resources for school infrastructure, improved school safety, better technology in classrooms, more robust workforce training, and significant property tax relief. An extension of the SAVE fund ensures schools have the resources they need to update and improve aging facilities for the kids. Additionally, SAVE allows schools to increase safety, and one of the requirements of the legislation is that schools prioritize upgrades like secure entrances, security cameras, and other safety enhancements before using SAVE funds on athletic facilities. Necessary technological improvements can also happen because of SAVE, as demonstrated by the fact many schools have used their SAVE dollars to bring one-to-one learning (every student is equipped with a laptop or tablet) to their classrooms. Finally, SAVE dollars can help address Iowa’s skilled worker shortage, as $1 million from SAVE each year will be directed towards the building of career academies.

All these benefits come with the added benefit of decreased property tax. Currently, 2.1% of the funds generated from the SAVE tax are devoted to reducing property taxes for local residents. Under this year’s legislation, that portion will increase to 12% over the next 10 years (a 470% increase), resulting in more than $120 million in annual property tax relief at full implementation. This is a major improvement compared to the current rate. These priorities demonstrated our commitment to funding Iowa’s classrooms and keeping the taxpayer in mind.

Speaking of funding, we released more funding targets this week. Our key priorities are increasing funding for Iowa’s Critical Access Hospitals, committing to Future Ready Iowa, improving nursing homes serving Iowans on Medicaid, and improving Iowa’s mental health system.

For Critical Access Hospitals, our targets include an additional $1.6 million dollar increase in funding, which will especially help Iowans in rural areas. And, Future Ready Iowa remains a priority, as it will receive $17.7 million in fiscal year 2020. Nursing homes that serve Iowans on Medicaid will also see a substantial increase in funding because our funding plan includes a $19 million increase to fund them. Finally, we are doubling down on our commitment to fund mental health services by increasing funding for Iowa’s Mental Health System by $5.3 million.

In the next few weeks, more details on the FY 2020 budget will be made public as the budget process picks up speed. Our budget plan represents a 0.63% increase in spending and spends just 97.45% of on-going revenue. The plan is a responsible and conservative approach that implements responsible increases in areas that Iowans have clearly indicated are priorities while also pumping up the ending balance to $298.6 million.

This week also included the passing of some important legislation. I had the opportunity to chair Senate File 220 in the House. This piece of legislation deals with Section 179 expense deductions, and it will allow more Iowans to keep more of their money. It passed through the Ways and Means Committee unanimously, and now it is on to the House Floor.

Senate File 220 provides section 179 expensing with a maximum deduction of $70,000 for corporations, financial institutions, and partnerships and limited liability companies taxed as corporations. The investment limitation in the bill is set at $280,000.

Currently, for tax year 2018, the maximum 179 expensing allowance deduction and investment limitations on section 179 property for such entities is limited to $25,000 and $200,000, respectively. Last year’s tax reform bill set the limit to $70,000 for individuals. With the passage of Senate File 220, these entities would be allowed the same deductions and subject to the same limits as individuals. The bill provides that the change is effective upon enactment and applies retroactively to January 1, 2018, for tax years beginning on or after that date. The fiscal impact of Senate File 220 will be a general fund reduction of $620,000 in fiscal year 2019 and a reduction of $430,000 in fiscal year 2020.

The Judiciary Committee was hard at work passing legislation to protect Iowa’s most vulnerable people. Iowa’s young and old are often attacked from those who could easily take advantage of them. Multiple bills have advanced this year to ensure violators are facing tough penalties for the harm they cause, and I am proud of the bipartisan support many of them have received. House File 224 deals with lascivious conduct with a minor by fixing a loophole that failed to protect those aged 14 to 15. In addition to this bill protecting minors, we passed three bills to protect the elderly. House File 328 amends the definition of “vulnerable elder” to clarify that a person’s age does not necessarily make them vulnerable, but their mental or physical condition or personal circumstances is what makes them more vulnerable after the age of 60. And, House File 323 ensures those that exploit dependent adults are punished by fixing a loophole in the Iowa Code that allowed them to go unpunished by giving stolen resources to another. Lastly, our committee passed House Study Bill 112, which protects dependent adults by punishing those that threaten to publicly humiliate them with degrading photos.

Lastly, I would like to say thanks to those of you I got to speak to this week. Representatives from the local Farm Bureau and Pella Regional Health Center came to the statehouse to meet with me, as well as Don Spotten from Pella. Please reach out to me at dustin.hite@legis.iowa.gov if you would like to meet with me, or have any questions regarding legislation.