Hite Capitol Update – March 26th, 2021

by Dustin Hite

This was another busy week in the House. We dealt with a range of topics from CDL testing to ABLE accounts for Iowans on Medicaid and SSI. Two bills that passed the House this week were second chance legislation. This year, the Iowa House again took the first step in amending the state’s constitution to allow felons to vote after they have served their sentence. In addition, I managed House Files 831 and 820 on the floor. HF 831 provides for expungement of non-violent Class D felonies after 10 years and HF 820 provides for the sealing of certain FED court records. Both of these bills are good second chance legislation which passed the House unanimously, 94-0. I look forward to seeing these bills be taken up in the Senate in the coming weeks.

Education continued to be the focus of the Iowa House, with a strong push for parental choice. In certain areas of the state, parents have many choices for educating their children—from public schools and private schools to home schooling. In other areas of the state, or for those parents who are unable to afford private school and unable to devote the time to homeschooling, the options are limited. House File 813 provides more options for those parents. Under current Iowa law, new public charter schools must be approved by the local school board. Currently, there are only two such charter schools in the state. House File 813 provides another way to start public charter schools by allowing an application directly to the state Board of Education. Charter schools will remain a part of the state’s program of public education and are required to accept and educate all students who apply. The charter school program allows flexibility for charter schools to meet the educational needs of their students.

Usually one of the last things that the legislature does before adjourning session is pass the state’s budget. The budget must be set on the lowest of the March or December Revenue Estimating Conference. This past Friday, the REC met and projected additional revenue growth in the current fiscal year and the next. The three-person panel raised their forecast for General Fund revenue in Fiscal Year 2021 to $8.0789 billion, which is a growth rate of 1.9 percent. For the next budget year – FY 2022 – the REC raised state revenue to $8.3856 billion or 3.8 percent growth.

In its review of the state’s economy, the panel said Iowa is “remarkably resilient” thanks to our largest sectors – ag, manufacturing, and financial services –being less vulnerable to impact from the pandemic. Employment in Iowa recovered swiftly last summer from the pandemic recession. But that recovering is now like a reverse checkmark, with employment growth slowing.

The panel noted that the Department of Labor’s household employment survey has found that currently there are 117,000 fewer Iowans employed than in January 2020. But this doesn’t mean employers aren’t looking to hire. In fact, Iowa Workforce Development’s database of available jobs has over 65,000 positions looking to be filled.

While the panel expects growth to continue, there are still potential speedbumps ahead. Inflation was mentioned as a possible problem. Some parts of the Iowa economy are already experiencing significant price hikes. In home construction, the price of the lumber in an average-sized new home is $24,000 higher than last year. Supply concerns are another issue, as manufacturers are dealing with shortages of all types of inputs due to production shutdowns last year and shipping issues.

Finally, I wanted to touch on something that all of us are doing this time of the year, taxes. The Treasury Department and Internal Revenue Service announced last week the federal income tax filing due date for individuals will be automatically extended from April 15, 2021, to May 17, 2021. The IRS will be providing formal guidance soon. Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed.

Additionally, the Iowa Department of Revenue is likely to extend its income tax filing deadline again this year as a result of the pandemic. Iowa’s state income tax filing deadline is traditionally April 30. Iowa Department of Revenue has publicly confirmed the state is likely to change this date but is waiting on more details from the IRS before finalizing its decision. Stay tuned to the Department’s website for details forthcoming.

Next week is the second funnel week, and it looks to be another busy week under the golden dome. If you would like to schedule a visit to the Capitol while we are still in session this year, or if you have any questions, comments or concerns please feel free to contact me at dustin.hite@legis.iowa.gov.