2010 Session Highlights: Recovering and Rebuilding

Unlike many other states hit by the national recession, the Iowa Legislature balanced the state budget responsibly without raising taxes. We expanded efforts to rebuild and recover from the recession and historic natural disasters of 2008, to create jobs and improve Iowa’s business climate, and to encourage the production of Iowa-produced renewable fuels.

Fiscally Responsible State Budgeting

These are difficult times for both family budgets and the state budget. We faced significant challenges this year, but Republicans and Democrats in the Legislature worked together to focus on the priorities of middle-class Iowans and small businesses.

Because of the lingering national recession, the Legislature focused on three fiscal goals this session:

Balancing the state budget without raising taxes.
Eliminating wasteful government spending by streamlining services to save taxpayer dollars.
Approving a fiscally responsible budget that maintains Iowa’s priorities while cutting spending in targeted areas.

We made tough choices while taking steps to create good-paying jobs, make health care more affordable, improve student achievement and expand the production of Iowa-produced energy.

We’re preparing Iowa for a brighter tomorrow and ensuring recovery from the national recession more quickly than other states.

Making State Government More Efficient

This session, the Legislature enacted the first substantial reorganization of state government in nearly 25 years. This is a major step forward in creating a state government that is leaner, more responsive to Iowans, and better able to handle the challenges ahead.

After we announced plans to reorganize state government last April, we asked Iowans from every corner of the state to give us their ideas. Their message was loud and clear: state government should be leaner, services ought to be more efficient, and we must eliminate waste. Our reorganization efforts will help Iowa do more with less.

Highlights of this landmark legislation:

We will consolidate the state’s information technology. By being smarter in our use of technology, we’ll save money this year, next year and every year that follows. At the same time, we’ll make government more responsive and efficient for taxpayers.
We will pool the state’s purchasing power to get a better deal for taxpayers. Departments and agencies will be required to coordinate certain purchases, which will allow the state to provide the same services at a lower cost.
The non-partisan Legislative Fiscal Service has estimated that this legislation could save as much as $125 million.

For more information on Iowa’s state government reorganization, check out these links:

Senate File 2088: http://tiny.cc/sf2088
Fiscal Note on SF 2088: http://www3.legis.state.ia.us/noba/

A separate early retirement package for state employees is estimated to save an additional $190 million over five years and will significantly reduce the size of government.

Serving as the Fiscal Watchdog to Protect Your Tax Dollars

Iowans are angry that current and former employees of the Iowa Association of School Boards misused—or even stole—taxpayer dollars intended for schools, teachers and students. In response, the Legislature’s Government Oversight Committee launched an investigation into the allegations.

In these difficult economic times, everyone, including families, schools and state government, is cutting back. Unfortunately, it appears that employees at the Iowa Association of School Boards have been spending taxpayer money on exotic vacations, kickbacks to for-profit organizations and padding their own salaries.

The Senate took the first step toward ensuring accountability by passing bipartisan legislation requiring the Iowa Association of School Boards to comply with open meetings and open records laws. Republican and Democratic members of the Legislative Council granted the Committee the authority to subpoena IASB employees who wouldn’t cooperate.

We will get to the bottom of this. Iowa taxpayers want every penny of their money to be well spent, and families deserve to know why scarce dollars are not being used to improve student achievement. By demanding answers for local schools, teachers and students, we’re holding the Iowa School Board Association to the highest standards of transparency and accountability.

Infrastructure Budget Creates Jobs, Prevents Future Disasters, and Invests in Communities across Iowa

To create jobs and lay the groundwork for future economic growth, the Legislature approved nearly $274 million for infrastructure projects, to continue the I-JOBS public works program and to help small businesses grow. [SF 2389]

Here are some of the highlights:

$30 million for a new Disaster Prevention Smart Planning Local Grant Program that will be administered by the I-JOBS Board. The grant process is similar to the local infrastructure grants under I-JOBS, but will focus on projects in cities and counties that incorporate smart planning principles and guidelines. Grants will be available for construction projects that prevent future disasters and use smart planning techniques, such as sustainable designs for low-impact development. This includes replacement or reconstruction of local public buildings to mitigate damages from future disasters, like flooding.
Adjusts the Phase III bonds authorized last year [SF 477] by changing them from appropriations bonds to revenue bonds, and increasing the amount of net proceeds from $105 million to $150 million.
$30.9 million for targeted disaster relief and rebuilding, flood mitigation and construction projects. Most of the projects had applied last year for the $118.5 million in funding that was available through the I-JOBS Board [SF 376] but were deferred.
Establishes an Iowa Smart Planning Task Force to help develop statewide goals for state agencies, local governments and other public entities during planning, zoning, development and resource management decisions.
$2 million for flood plain management and dam safety and $1.3 million for the Iowa Flood Center at the University of Iowa. The Flood Center will also receive $10 million in federal Community Development Block Grant money for flood plain mapping.
$1.5 million to help open Community-Based Corrections facilities in Davenport, Waterloo, Sioux City and Ottumwa.
$2 million for grants under the Housing Trust Fund Program, which helps ensure safe and affordable housing for Iowans through the Local Housing Trust Fund and the Project-Based Housing Program. These programs aid in the development and rehabilitation of single-family and multi-family housing.
$10 million for lake restoration, dredging and water quality projects. The funds are used for projects identified in the Department of Natural Resources’ Lake Restoration Annual Report and Plan.
$5 million for state parks infrastructure improvements that will include replacing sewer lines, upgrading public drinking water systems, replacing shower buildings, constructing restrooms, replacing trail bridges, extending trail areas and providing open-air interpretive shelters and exhibits. The projects are slated for multiple fiscal years. State parks received $20 million in Rebuild Iowa funding to make improvements in preparation for the 100th Anniversary of State Parks in 2020.
$2 million for vertical infrastructure capital projects for the Iowa Great Places Program, an initiative that draws on the uniqueness of Iowa communities in an effort to enhance local and regional cultural and economic development.

Speeding Up Iowa’s Recovery from the National Recession

For the second straight year, the Legislature acted boldly and wisely to help our state rebuild, recover and emerge stronger than ever from the lingering national recession.

The centerpiece of this year’s economic recovery effort creates jobs all across our state by investing in transportation, public buildings, disaster rebuilding and prevention, wastewater and water improvements, housing and energy.

This recovery effort has two fundamental goals:

Create good jobs to immediately ease the economic distress of families and communities.
Lay the groundwork for long-term economic growth through public infrastructure improvements and disaster prevention.

The Legislature also took other steps to boost job creation, including approving the final phase of the Iowa Power Fund, a four-year, $100 million initiative to help Iowa businesses expand production of renewable energy, alternative fuel and clean energy technology. This initiative has been growing Iowa’s energy economy, helping family farmers and reducing our dependence on foreign oil.

Putting the Focus on Main Street, not Wall Street

One of the most important jobs of the Legislature is to invest in long-range economic development that ensures future growth and prosperity across Iowa.

That’s why the Legislature maintained its commitment to the Iowa Values Fund, the state’s highly successful job-creation initiative [SF 2389]. The Iowa Values Fund provides financial assistance to businesses to create or retain good-paying, high-quality jobs in our local communities.

The Legislature took several additional steps to invest in local jobs and small businesses including:

Created a Save Our Small Business Fund by setting aside $5 million for low-interest loans to help small businesses create jobs. Loans ranging from $2,500 to $50,000 will be available to businesses with 35 or fewer employees.
Expanding one-on-one consulting at Small Business Development Centers across Iowa [HF 2522]. The technical assistance provided by our Small Business Development Centers is essential to establishing successful small businesses, creating jobs and economic growth in our local communities.
Supporting MyEntre.net, an online community for Iowa’s small businesses and entrepreneurs, by establishing a partnership with the Iowa Bankers Association to supply much-needed capital for entrepreneurs. [HF 2522]
Requiring the Iowa Department of Transportation (DOT) to set aside 10 percent of its contracts for competitive bidding by pre-qualified small businesses. [HF 2460]
Protecting jobs in small businesses across Iowa and ensuring Iowa car buyers have more choices by standing up to the auto giants in Detroit. After the auto industry bankruptcies and slowdowns, GM and Chrysler began imposing restrictive rules that could force Iowa dealerships to close. Senate File 2234 will ensure that Iowa’s auto dealers can make their own decisions about how to run their small businesses. The legislation also protects consumer privacy by preventing manufacturers from demanding customer lists from local dealers. A second bill, Senate File 2146, ensures that auto dealers receive manufacturer compensation for warranty work.
Expanding the eligibility for the Linked Investment for Tomorrow (LIFT) fund. This program, administered by the Treasurer of Iowa, provides another opportunity for Iowa small businesses to succeed by helping them negotiate for lower interest loans.
Shifting the focus of the Supplemental Research Activities Tax Credit to increase the benefit to small businesses as opposed to big Wall Street businesses.
Creating a one-stop Web site for business assistance and resources. [SF 2389]

Continuing to Make Improvements to Iowa’s Transportation Network

The Legislature moved forward with a multi-year initiative to strengthen Iowa’s economy, preserve and create good jobs, and make significant investments in improving and rebuilding the state’s transportation network.

This includes:

Expanding links between railroads and growing businesses. The Legislature approved $7.5 million to create “Rail Ports,” which are enhanced rail connections located in or adjacent to industrial parks, such as those serving Iowa’s growing wind energy industry. Seven communities have rail ports planned and ready to begin construction, but financing has been the last obstacle. The Iowa Transportation Commission will allocate grants with a 50/50 match from local communities. Additional preference will be given to counties that have lost 9 percent or more of their workforce due to a permanent factory closing.
Expanding passenger rail service. The Legislature approved new resources to expand passenger rail service in Iowa, including $3 million in fiscal year ‘10, $2 million for the next fiscal year and an additional $6.5 million for the following year. If federal funds from the Passenger Rail Investment and Improvement Act of 2008 become available, the necessary matching state funds will be there.

Ensuring Accountability for Stimulus Dollars

Iowa expects to ultimately receive more than $2 billion through the American Recovery & Reinvestment Act. These federal stimulus dollars are allowing us to maintain critical services to Iowans.

To ensure these dollars are used effectively, the State of Iowa’s new Iowa Accountability & Transparency Board is monitoring state efforts and making sure Iowans know how funds are spent to improve Iowa’s economy.

To learn more, go to the Recovery Web site at http://recovery.iowa.gov.

This year, the Legislature also required the Iowa Finance Authority to track all I-JOBS projects online and to report information quarterly. Reports will include the current status of projects, the amount and percentage of funds spent, federal money that was leveraged or matched by state funds, the number of jobs created or saved, and information on the contractors (e.g. where the employees are located). The Iowa Finance Authority must also maintain a Web site so that Iowans can track projects on a county-by-county basis.

Helping Unemployed Workers Recover from the National Recession

When one person loses a job, it’s hard for the whole family. When 20, 50 or 100 people in a community are suddenly out of work, the entire community and the local economy suffer.

At times like these, one of the best safety nets we can offer Iowa’s working families is good unemployment insurance. Unemployment benefits help families make ends meet and help communities get back on their feet.

Here is some of what we did this year to ensure unemployed Iowans get the help they need:

Made sure unemployed workers are able to connect with new employers and have easy access to state services by providing $18.3 million to Iowa’s workforce centers [HF 2522]. Iowa’s 55 workforce centers, located throughout the state, provide job counseling, training, placement and assistance.
Took steps to help laid off employees get services sooner and find new employment more quickly through the new Iowa Worker Adjustment and Retraining Notification (WARN) Act. Employers are now required to give advance warning to employees and the Iowa Department of Workforce Development of business closings that will result in a layoff of 25 or more full-time employees or of mass layoffs that reduce the workforce by at least 25 employees in a 30-day period.

We’ll continue to help workers move forward when they are laid off and help businesses find the workers they need when they expand.

Keeping Iowa a National Leader in Wind Energy

Iowa is a national and world leader in wind energy, just as it is in biofuels. Our state is #2 in the nation in wind energy production, behind only Texas. Nearly 20 percent of the electricity produced in Iowa now comes from wind.

Growth in the wind energy industry is fueling economic growth around the state. In the last several years, the Legislature has supported the production of wind energy through tax credits and favorable utility regulation. We’ve also invested in locally-owned wind energy production, which has the greatest economic benefit for local communities. Local energy production means more energy dollars are spent here at home.

Iowa is now home to multiple wind energy manufacturers. In addition, more than 200 Iowa businesses supply parts or services to support wind energy production and have seen their revenues increase by $50 million. All told, 2,300 Iowans have jobs related to the wind energy industry in our state.

Promoting Home-grown Fuels and Reducing Our Dependence on Foreign Oil

Democrats and Republicans are working together to make sure Iowa remains a leader in renewable energy. In 2007, the Legislature created a $100 million Iowa Power Fund, which has been helping Iowa businesses expand renewable energy, alternative fuel and clean energy technology industries.

The result is an increase in Iowa-produced energy, a booming industry that is helping Iowa family farmers and strengthening our national security by reducing our dependence on foreign oil.

By attracting the investment necessary to keep Iowa’s energy economy growing, we are creating the high-skill, high-wage jobs that keep more of our best and brightest graduates in Iowa to live, work and raise a family.

Tax credit reforms mean big savings, increased accountability

The recent abuses of some of the state’s film and other tax credit programs appalled many Iowans.

We’ve listened to their concerns and have made significant reforms. Tax credits will now receive the same careful, regular public examination as the rest of the state budget. This effort will save money and help ensure the dollars we do spend benefit Iowa families and small businesses.

The steps we took this year will end some tax credits, cut many remaining credits and dramatically increase accountability for all tax credits, thereby reducing Iowa’s tax credit liability by more than $115 million.

When it comes to Iowa’s tax credit programs, we’ll continue to shift the focus away from Wall Street and invest more in our Main Street businesses. The success of these local businesses benefits more Iowans because they are true job creators rooted in our local communities.

Far too often, Iowans don’t know if tax credits are creating the promised jobs and economic growth. Thanks to this year’s reforms, the public will be able to easily find out who receives each tax credit, the purpose of that credit and the dollar amount spent on it.

The legislation’s highlights include:

Suspension of the film tax credit program for three years.
Cutting the Supplemental Research Activities Tax Credit in half for large corporations and shifting part of the savings to research and development incentives for small businesses.
Lowering the overall cap on business tax credits from $185 million to $120 million.
Cutting the Iowa Fund of Funds contingent tax credits from $100 million to $60 million.
Cutting other tax credit programs by 10 percent.
New, ongoing oversight to ensure regular scrutiny of all tax credits for results. Credits that don’t produce results will be fixed or eliminated.

Look for the database at www.iowalifechanging.com/AnnualReport/2009/asp/search.aspx.

If you want to see how tax credits are being used across the state, go to the Iowa Department of Economic Development Web site where you can check out the searchable database of tax incentives awarded to businesses.

Helping Iowa Businesses during the Recession

The recession’s jobless toll is draining unemployment compensation funds across the United States so fast that 40 other states’ programs are projected to go broke within two years and will need to borrow $90 billion to keep their commitments. In Iowa, however, smart fiscal management has allowed us to continue to have a solvent unemployment trust fund. Iowa is not expected to be forced to borrow funds from the federal government.

This session we saved Iowa employers $88 million in Unemployment Insurance taxes. The Legislature voted to loan money from Iowa’s cash reserves to the Unemployment Trust Fund, which provides benefits to unemployed workers. This loan significantly cuts the 2011 unemployment tax rates while ensuring the payment of unemployment benefits to workers.

Keeping an Eye on Special Interests

Sunshine can be the best disinfectant. This session, the Legislature applied that principle in response to Iowans’ concerns about the influence of lobbyists and special interest groups.

A new law makes it easier for all interested Iowans and watchdog groups to track lobbying activity at the Statehouse. The reforms in House File 2109 will make it much easier to find out who has hired a particular lobbyist, how much they’re paid, and which bills they’re lobbying for and against. In addition, this information will be available online, instead of spread across a mix of paper and electronic sources.

This legislation was part of a bipartisan effort to increase government accountability and transparency, making state government more responsible to all Iowans.