Senate President Pam Jochum

For Immediate Release:  May 9, 2013

Senate offers Health Care Compromise

• Concessions on health care incentives

• Resistance to increased federal, state, and local property taxes

During a meeting today with House negotiators, negotiators for the Iowa Senate today proposed a compromise plan designed to increase access to affordable health care for Iowans.

1)    In response to Republican concerns, the Senate Democratic compromise waives copays if participants participate in annual physical exams and make other healthy choices.

2)    In response to Republican concerns, the Senate Democratic compromise strengthens language on improving the health of Iowans.

3)    Senate Democrats still support the “opt-out” compromise included in the Senate’s original bill.

“We have compromised on the top concerns of Governor Branstad and House Republicans,” said Senate President Pam Jochum.  “However, we continue to strongly oppose the Republican approach which spends MORE in federal, state and local property tax dollars to provide LESS help to Iowans.”

Jochum said negotiations had reached a delicate point.

“This weekend, legislators will be at home in their districts,” Jochum said.  “Now’s the time for Iowans to speak up in support of affordable health care for low paid, working Iowans.  We can help bring these working Iowa families better health and improved financial security.”

-end-

May 9: Health Care Compromise Proposal

May 9: Health Care Cost Comparison 

Directory
0:00 Sue Dinsdale, ICAN executive director
1:30 Michelle Bartusek, Provider of income tax help to low income Iowans
3:46 Melody Webb, an Ankeny resident who benefited from the EITC
7:14 Sen. Joe Bolkcom

Senator Joe Bolkcom, chair of the Senate Ways and Means Committee
Prepared remarks for April 29, 2013 news conference

“When it comes to the stalemate over taxes, Governor Branstad has no one to blame but himself and his two earlier vetoes of an increase in the working family tax cut.

“This year, an effort to increase the refundable Iowa Earned Income Tax Credit to 20% of the federal tax credit was approved by the Iowa Senate by a vote of 35 to 15 (Senate File 422, March 20).

“Compared to other tax cut proposals, this legislation cuts taxes for the Iowa taxpayers that pay the highest percentage of their income in state and local taxes. It helps about 210,000 working families that are home to almost 40 percent of all Iowa kids. *

“Can we reach a deal on taxes?  I’m certain we can.  And I’m also certain that any deal must include a tax cut for Iowa’s working families by increasing the Earned Income Tax Credit.”

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* Iowa Department of Revenue. Iowa’s Earned Income Tax Credit Tax Credits Program Evaluation Study, revised February 2012. www.iowa.gov/tax/taxlaw/EITC2011_revised.pdf

Joint statement by Senators Jochum, Hatch, Ragan, and Bolkcom

“We welcome the fact that Governor Branstad is finally engaging in the health care debate.

“Yet the ‘true side-by-side comparison’ he issued today is a disappointment.  Below is a factual rebuttal.

“At stake is health insurance for struggling working Iowans, lower health care costs for all Iowans, and the long-term strength and competitiveness of our state’s health care system.

“Based on public statements and private conversations, we are confident that the Iowa House and Senate will do what is necessary to move Iowa forward in this area.”

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Governor’s document can be found here: http://tinyurl.com/br5gjan

Branstad Claim: “Iowans with below 100% FPL will be served by the Healthy Iowa Plan,…”

89,000 uninsured working Iowans making less than 100% of FPL would be covered under the Governor’s “Healthy Iowans Plan,”  under the federal waiver the governor hopes to receive.
If the Governor receives such a waiver, Iowa will pay 40% of the cost while the fed pay 60%.  Under Medicaid expansion, Iowa would pay at most 10% while the feds pay at least 90% after the 7^th year.  There is no state share for the first three years.

Branstad Claim: “…Iowans above 100% accessing health care through the affordable health benefits exchange.”

61,000 uninsured working Iowans who earn between 101 and 138 % of FPL would buy private insurance throughout the federal exchange.  Each person covered in this way will cost the federal government up to $3000 more than if they were covered by Medicaid.  To recover some of that extra expense, Iowa small businesses will penalized as much $19 million by the federal government.

Branstad Claim: “Rewards Quality Health Care Outcomes: Yes, in Year 1”

Everyone knows this claim is not true.  The governor is talking about Accountable Care Organizations (ACO), a complex new approach to improving health care outcomes.  There is only one ACO currently in Iowa, a pilot project located in Fort Dodge.  There is no simply no realistic way for the Governor’s untried approach to implemented next year.  Establishing working ACOs will take several years to accomplish.

The Senate plan for Medicaid expansion expands “medical homes,” the cost-effective coordination of a single patient’s care by medical and community support providers.  The study referred to by the governor is the Senate’s responsible strategy of working with Iowa’s health care providers so the move to ACOs will be successful.

Branstad Claim: “Member Contributions: Yes, similar to the successful and popular Hawk-I program”

The Governor’s effort to rebrand insurance premiums as “member contributions” will be rejected by the federal government.  Medicaid funds clearly cannot be used for premium-based insurance schemes for persons under 150 FPL.

In addition, charging struggling working people premiums for insurance results in denying them insurance.  Under the Governor’s plan, Iowans who pay their rent, buy food, or make car payments and therefore miss a premium payment, will lose their insurance for a year.  By failing to insure these people, the Governor’s plan will drive every other Iowan’s health costs.

Branstad Claim: “Estimated Cost to the State of Iowa at Full Implementation: Branstad Plan – $23 million”

Governor’s claim that his plan costs $23 million leaves out the following annual costs:

• $43 million in property taxes from every county in Iowa, an action which will likely torpedo the new mental health reform effort
• $42 million from Broadlawns Hospital
• $13 million from the University of Iowa Hospitals
• $42 million dollars in general fund money

Branstad Claim: “Estimated Cost to the State of Iowa at Full Implementation: Medicaid Expansion – $83.4 million”

The $89 million listed by the Governor is the estimated cost of for a FULL year of the Senate plan for Medicaid expansion in 2020, when the state share finally reaches 10%.  For the first three years, the state share is 0%.  After that, it increases to a maximum of 10% of 2020.

The true apples- to-apple cost of each plan in the first full year is $162 million for the governor’s plan and $5 million for the Senate Democratic plan.  This $5 million is for administrative costs, no matter which plan is approved.

The true apples- to-apple cost of each plan in 2020 is difficult to determine.  Since the Governor’s plan costs $162 million in 2014 and increases from there, the cost is certain to be more than the estimated $89 million cost of the Senate plan in 2020.

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Senator Brian Schoenjahn

April 3, 2013

Statement by Senator Brian Schoenjahn, chair of the Senate Education Budget Subcommittee

“Senate Republican Leader Bill Dix has issued a news release claiming a procedural ruling on a Republican amendment to non-budget legislation shows that Senate Democrats oppose lowering tuition at Iowa’s Regent Universities.

“That claim is patently ridiculous.

“Soon, however, Senate Republicans can back up their own rhetoric with their votes. They can help Senate Democrats prevent college tuition increases that will result from inadequate education budget passed by House Republicans, House File 604, becomes law.”
 
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Senator Tod Bowman of Maquoketa

DES MOINES, March 18, 2013 – Tax evaders using out-of-state shell corporations to avoid paying registration fees on million-dollar RVs or other luxury vehicles will face criminal charges and penalties under a bill approved by the Iowa Senate today.

Senator Tod Bowman of Maquoketa, chair of the Iowa Senate Transportation Committee, proposed Senate File 364 to make it easier to crack down on those who deliberately evade paying registration fees. The bill was approved on bipartisan 46-2 vote.

“These wealthy individuals have decided that they are above the law and don’t need to follow the rules the way the rest of us do,” Bowman said. “I’m working to shut down this scam.”

Under Iowa law, a citizen who purchases a vehicle pays a 5 percent fee for new registration. The fee on a $25,000 car, for example, would be $1,250. That money goes to Iowa’s Road Use Tax Fund to pay for the upkeep of our roads and bridges.

Bowman said the scam works like this: “A wealthy Iowan purchases, for example, a million-dollar RV. Instead of filing the title in Iowa and paying the new registration fee, they register the vehicle in the name of a shell corporation in the State of Montana. Montana, unlike Iowa, does not charge a fee for new registrations. The scammer maintains their Iowa residency and has no other affiliation with the State of Montana outside the fake corporation. The vehicle is housed here in Iowa and used on our roads.”

Under current law, the Iowa Department of Transportation (DOT) can only issue a $150 simple misdemeanor citation if the scam is detected. Senate File 364 would change that starting July 1. Under the bill, if investigators from Iowa’s Transportation and Revenue departments determine that a vehicle is owned by an out-of-state shell business, they will be presume that the Iowan using the vehicle is the real owner and will notify them that they must title and register the vehicle in Iowa within 30 days.

A person who willfully evades payment of the fee for new registration is guilty of fraudulent practice. In addition to any criminal penalty, the person will be assessed a penalty of 75 percent of the amount of the fee unpaid and required to be paid.

“These scofflaws are stealing millions of dollars needed to pay for Iowa roads. That’s unfair to every Iowan who plays by the rules and relies on our roads and bridges for safe travel,” Bowman said.

Since January 2011, the DOT’s Motor Vehicle Enforcement Office has referred for collection, investigations involving 36 out-of-state shell businesses created specifically to evade more than $827,000 in fees for new registration, plus Iowa title and annual registration fees. Currently, DOT’s Motor Vehicle Enforcement Office is investigating another 14 out-of-state shell businesses involving 31 vehicles that owe more than $318,000 in new registration fees to Iowa. The office also has pending investigations on an additional 60 out-of-state corporations.

“As I’ve worked on this bill, I’ve appreciate the support from Iowans, as well as my Republican and Democratic colleagues in the Senate. I’ll work with members of the House to get it to the Governor for his signature.”

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“Today Governor Branstad rightly drew attention to a study noting that Iowa is now in the top 10 when it comes to the nation’s healthiest states.* Iowa won’t stay there long, however, if he refuses to expand Medicaid and denies health insurance to 150,000 Iowans.”

“Seven out of the top ten states are expanding Medicaid. Their citizens will receive better care for chronic conditions, for mental health, prescription drugs and have on-going, preventive care relationships with their doctors.

“Iowa will fall behind if we don’t expand Medicaid.”
* Governor’s news release: https://governor.iowa.gov/2013/02/branstad-issues-statement-on-iowa%e2%80%99s-move-into-the-top-10-in-the-gallup-healthways-well-being-index%c2%ae/

Sources for the following table:

Gallup-Healthways Well-Being Index, the study cited by Governor Branstad
http://www.well-beingindex.com/

Medicaid Expansion status:
http://www.advisory.com/Daily-Briefing/2012/11/09/MedicaidMap#lightbox/1/

 
Top 10 Healthiest States:
7 out of 10 back Medicaid Expansion

Rank State Medicaid Expansion
1        Hawaii      Yes
2       Colorado  Yes
3      Minnesota Yes
4      Utah            Undecided
5     Vermont    Yes
6      Montana   Yes
7     Nebraska   Leaning no
8     New Hampshire Yes
9     Iowa            Leaning no
10  Massachusetts Yes
 

 
END

“150,000 Iowans in need are one step closer to having health insurance, something important to everyone’s piece of mind,” said Senate President Pam Jochum of Dubuque, the chair of the subcommittee. “We’ve got to stop sending people to the hospital for treatment after they’ve become so sick they can’t take it anymore. That approach is inhumane and helps make U.S. health care the most expensive in the world.”

Iowa Governor Terry Branstad continues to oppose Medicaid expansion, making him one of a declining number of Republican governors continuing to hold that position. Yesterday Governor Rick Scott of Florida said, “While the federal government is committed to paying 100 percent of the cost of new people in Medicaid, I cannot, in good conscience, deny the uninsured access to care.”

Governor Branstad plans to talk about these issues tomorrow in Washington, D.C., with Kathleen Sebelius, the U.S. Secretary of Health and Human Services. He is seeking special permission to continue the IowaCare program.

“Iowa Care costs the state of Iowa more, covers fewer Iowans, and provides fewer services than Medicaid expansion,” said Senator Jack Hatch of Des Moines, a member of the subcommittee. “It is time to end the partisan fighting and listen to the overwhelming majority of Iowans involved in health care. Expanding Medicaid will go a long way towards the Governor’s goal of making Iowa the healthiest state in the nation.”

A full committee vote is expected to be held next Wednesday, February 27th, at 2:00 pm in Room 22.

Senator Matt McCoy speaking at a press conference on Thursday.  Senate Majority Leader Mike Gronstal is on his right.

DES MOINES – In hopes of expanding Iowa’s middle class, Democrats in the Iowa Senate plan to propose a Main Street Tax Cut to reduce commercial property taxes by $250 million.

FACT SHEET 

“This plan reduces commercial property tax rates for 4 out of 5 Iowa businesses to a rate equal to residential property. That’s nearly 43% tax cut,” said Senator Matt McCoy of Des Moines. “This is a job creation measure favors Iowa’s small businesses. That’s the key difference between it and other proposals.”

Commercial property owners currently pay taxes on 100 percent of the assessed value of their property, about twice what residential property owners pay. The Main Street Tax Cut is a 40 percent commercial property tax cut for 80 percent of Iowa commercial properties.

If the Main Street Tax Cut becomes law, $50 million a year will go into a new Business Property Tax Relief Fund beginning July 1, 2014. The permanent, on-going appropriation will grow by $50 million each year that the state’s revenue increases by at least 4 percent. Once the $250 million goal is reached, the annual investment will be maintained.

“This is a tax cut that makes sense for all Iowans,” McCoy said. “The Main Street Tax Cut does not increasing taxes on residential property owners or harm local schools and public services. State dollars will replace every property tax dollar that used to go to schools, local governments and community colleges.”

Compared to Governor Branstad’s proposal for a 20 percent across-the-board cut in commercial property taxes, the Main Street Tax Cut costs the state less while providing more commercial property tax relief to almost all Iowa commercial property owners. That’s because the Governor’s approach sends tens of millions of dollars into the bank accounts of large, out-of-state corporations. 9 out of 10 Iowa businesses do better under the Main Street Tax Cut than under Governor Branstad’s tax cut.

In 2011, a similar plan was the only commercial property tax cut plan to pass either chamber of the legislature with overwhelming bipartisan support, passing the Senate by a vote 46-4. By way of comparison, the Main Street Tax Cut is larger and also applies the tax credit to the full commercial property, similar to Governor Branstad’s proposal. The previous legislation only applied to the commercial buildings, not the land included in the property.

“Iowa’s local property tax system works against efforts to create jobs and bring new businesses to Iowa,” McCoy said. “The Main Street Tax Cut addresses that problem. At the same time, it does not reduce commercial property taxes by simply shifting the burden onto residential property taxes or by cutting local schools.”

The Senate is expected to vote on the proposal before the end of the session.

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SF 106 is legislation designed to conform Iowa’s internal revenue code to the updated federal tax code.  Many Iowa tax credits and deductions are matched to federal provisions, but we must reference federal legislation that makes changes to those provisions.  By matching federal tax provisions, it makes it easier for Iowans to prepare their taxes and for the Department of Revenue to process tax returns.

The American Taxpayer Relief Act (ATRA), which was passed by Congress on January 1, 2013, contained many permanent or temporary extensions of existing federal tax policy.  With the passage of the ATRA, most taxpayers avoided increases in their income tax rates and the loss of expanded tax credits.  By passing SF 106, we will enable Iowa taxpayers to take advantage of beneficial tax policy extensions that will help families, farmers, and small businesses when filing their state income taxes.

Items that were included in ATRA that we will be extending to Iowa taxpayers include:

• Permanently extending the child tax credit at its current level of $1,000 (would have been reduced to $500)
• Extend through 2017 expansions to the Earned Income Tax Credit (EITC) for families with three or more children, as well as making permanent the increased income phase-out range for married couples filing a joint return
• Permanently extend the child and dependent care tax credit at its current level of  care expenses of $3,000 for one child and $6,000 for two or more (would have reverted to expense levels  of $2,400/$2,800)
• Permanently extending the student loan interest deduction
• Extend the deduction for up to $250 of out-of-pocket expenses by teachers for two years
• Allow small businesses and farmers to expense, rather than depreciate, the first $500,000 of equipment cost for purchases in 2012 and 2013.  This provision is estimated to save those taxpayers $10.2 million in FY13 and $8.5 million in FY14

These changes will help working Iowa families, Iowans with student loans, and small businesses and farmers who are looking to invest in their operations.  Moving quickly on this legislation is the right thing to do because it benefits Iowans and will give them certainty moving forward with their taxes and business decisions.

You can find the Legislative Services Agency fiscal note here.

Senate Staff, 2/4/2013

FOR MORE INFORMATION

Representative Sharon Steckman: 641-583-2484 (cell)

Senator Herman Quirmbach: (515) 291-8984 (cell)

A preliminary finding from
the 2013 Iowa Superintendent Survey:

“73% of Iowa superintendents will increase class sizes if action is not taken quickly to set local school funding (allowable growth) for 2013-2014 year or if it is set at 0%.”

Complete, final results on the negative impacts
on students from continued failure to set
local classroom funding will be released today.

News Conference
Monday, Jan 28 at 12:30 PM

Room 22, Iowa Statehouse

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