Pella Chronicle

March 8, 2013

Education, property tax discussion dominate roundtable

Pella Chronicle

Pella — Education and taxation were two of the main topics discussed at a legislative roundtable Friday morning at the Vermeer Global Pavilion in Pella. Legislators, representing Marion and Mahaska counties, took part in the roundtable, that included approximately 30 guests.  The session opened with each legislator introducing themselves.

“We’re trying to stay relevant,” Sen. Amy Sinclair (R-District 14) said. She, along with Sen. Ken Rozenboom (R-District 40) are in the minority party in the Senate. Democrats control the Senate and set the agenda. The two of them, according to Rozenboom, have been on parallel paths, politically. Both are freshmen Senators and former county supervisors. They even sit together in the Senate.

Attending from the House were Larry Sheets, Guy VanderLinden and Greg Heartsill, all Republicans as well. Republicans control the House, which passed an education reform bill, one that is in line with Gov. Terry Branstad’s proposal and with a lower increase in spending.

Though a Republican governor made the proposal, there were concerns among those in his party about them. Sheets pointed out that he did not agree with taking experienced teachers out of the classroom. The pay increase, for a starting teacher, is now $4,000, compared to $7,000 proposed by Branstad. Sheets believed this put too much of a burden on smaller school districts, but he voted for the bill after changes were made.

“My concerns for the small schools were satisfied,” Sheets said.

One of the first questions from the audience was how Iowa can attract the best and brightest teachers. Sinclair, whose husband is a public school administrator, said that pay is the key.

“Honestly, pay increases will help us,” Sinclair said. “I think it’s a ‘let’s find efficiency to pay for it’ situation,” she added. The Legislature is considering tuition reimbursement for the top 25 percent of graduates who go into education, with more incentives for those who go into more difficult to fill positions.

Sinclair added that a quality educational system is necessary to attract quality workers for Iowa businesses. She has heard that Vermeer has struggled to find qualified workers, and when parents consider moving to take a job, the quality of the schools play a role.

Heartsill believes one of the problems with education is too much top-down control. Educators are expected to teach everyone the same way and to reach the same goals, when children learn in their own ways. Heartsill’s wife is a home school educator and has run into this issue. Heartsill wants to restore local control.

There is also difficulty in removing ineffective teachers from Iowa class rooms.

“The teachers’ lobby is strong in Iowa,” Rozenboom said.

Sinclair also discussed the potential for educational improvement by introducing more competition to the industry. This was revisited by Oskaloosa Schools Superintendent Russ Reiter. Reiter told the legislators that, as a public school, it has to take every child, and that finding the best way to reach every child is not always easy.

Reiter is also aware of the challenges presented by competition, as students in his district could easily enroll in area private schools or Pella Community Schools. He said he has no problem paying teachers more, but it will require more money, which may not always be available. Settlements with unions for future pay also present a challenge when the State dictates increases or changes.

“With every district, there come local settlements,” Reiter said.

“When you live in rural Iowa, your choices are limited,” Sinclair said. “We have to make sure we are protecting a parent’s choice.”

Teaching to the center, as Reiter described the requirements of his staff, can sometimes leave the brightest at the top from reaching their potential, while those at the bottom may not be able to reach theirs as well. There was no resolution to the discussion, but as a member of the Education Committee, Sinclair intends to take what she heard back to the Senate.

Public Schools receive a great deal of funding through property tax, and reducing the tax burden to make Iowa more business-friendly, was a promise made by Sinclair, Rozenboom, VanderLinden and Heartsill. Those in attendance want to see their taxes reduced as well.

According to Sheets, Iowa has the highest corporate income taxes and the highest average property taxes in the country. He was surprised to learn of some of the levels of taxes paid in Iowa.

VanderLinden said there are several bills drafted that address property tax, most of them with the goal of lowering taxes across the board and backfilling local governments to the extent that the state can.

“We’re trying to lower property taxes across the board,” VanderLinden said. He added that even if this Legislature passes a reform, promises could not be made that increases will not come from a future Legislature.

Sinclair would like to see a provision , in whatever reform is adopted, that would force the state to maintain its promise of backfilling losses incurred by local governments, and that they be allowed to raise taxes for essential services if necessary.

“I would want protection in there,” Sinclair said.

“Government’s never going to run out of need for money,” Heartsill said. He reminded the crowd of the Knoxville City Council’s decision to institute Franchise Fees on its electric and gas utility bills, to be prepared for any impact from property tax reform. He was critical of the City’s decision to move forward with the fees, even after it was clear that reform would not happen last year.

Knoxville City Councilor April Verwers was in attendance and told Heartsill that, even though the revenue from the fees was not needed to backfill property tax reform, the council is using the money to otherwise improve the city. For instance, the council is using some of the money to avoid sewer and property tax increases.

A question was also raised about a gas tax increase. The panel did not seem to be supportive of a gas tax increase.

“Sixty-three percent of Iowans are against it,” VanderLinden said. He would not support a gas tax increase unless it was offset by a tax reduction in some other area. Sheets questioned why no action has been taken on the gas tax for 25 years.

Sinclair, who lives in Wayne County, which is on the border with Missouri, said counties like hers lose business to neighboring states when taxes become too high. Much of her district is also rural, and the state’s funding formula for gas tax revenue distribution is not favorable to rural areas.

“I can’t support the gas tax,” Sinclair said. VanderLinden said a 10 cent increase would not provide any significant benefit to improving Iowa’s infrastructure, but would increase the burden on Iowans.

The legislators were critical of the Democrats’ budget proposal, which would increase spending by 11 percent. Republicans seek a spending increase of 3 percent, which still bothers them.

“An 11 percent increase in the state budget is unacceptable,” Rozenboom said. He said this would spend $200 million more than anticipated state revenue, though Democrats believe the state has a “surplus” that should be spent.

“This is like spending $1.05 for every dollar taken in,” Sheets added.

VanderLinden, who is in his second term in the House, said the state had a $9 billion deficit when he came in, which has been erased, while reserve funds are full.

“It’s going to be a very hard fit to get the House to move up at all,” VanderLinden said. He is disappointed that the state’s bottom line never goes down, and that the budget increases every year. For those spending items that can be justified, he would prefer to keep the spending below revenue.

“We need to be growing Iowa’s economy, not its government,” Heartsill added. In all, Iowa will spend nearly $13 billion this fiscal year, which includes $6 billion directly from Iowans and the rest from the federal government. Per capita, Iowa’s spending will outpace that of Missouri’s, and Heartsill believes the taxation is part of the reason Iowa loses business to its neighboring states.

“Where money is best treated, that’s where it will flow,” Heartsill said.

Other issues covered Friday included Medicaid expansion and mental health reform. Bob Kroese, CEO of Pella Regional Health Center, believes entering into the agreement with the federal government to expand the low-income health coverage program would bring more money to the state. Branstad has refused to expand Medicaid, an opportunity presented under the “Affordable” Health Care Act in which the federal government promises to pay 100 percent of the increased cost for three years.

“I’ve heard from every one of your employees,” VanderLinden said. “We can’t do it. We can’t pay for it. We don’t have the money.”

VanderLinden spoke on behalf of the panel that they would each like to see everyone in the state have medical insurance, but the truth is that the money is not available for the federal government to do this. He added that no one is ever removed from Medicaid, it just continues to expand, and has become a “bottomless pit” of expenses.

Kroese said the expansion provides the opportunity to bring in more money, or to lose it to other states, which will spend it on their residents. Sheets said that for every dollar the federal government spends, 46 cents is borrowed. There is a chance the federal government will have no money in 10 years, Sheets added.

“I don’t trust the federal government on Medicaid backfill,” Sinclair said. She has investigated the possibility of expanding Medicaid and asked for real world numbers. Under the expansion, if the state loses $2 million through Medicaid, the federal government would only pay $300,000.

Branstad has considered the expansion of Iowa Care, another health insurance program in the state, to help the uninsured. He has since learned that this cannot be done, and it is not a good idea, as only two hospitals in the state accept Iowa Care, one in Des Moines and one in Iowa City.

In regard to mental health reform, a law passed, requiring counties to work together to form mental health districts, is being implemented. The House has appropriated $11.6 million for transitional funding for this, which Sinclair said the Senate backs. Not every county will receive such funding, as they did not act before the deadline. Marion County did meet the deadline and should receive transitional assistance.