Pella Chronicle

February 18, 2011

Weekly Report

Jim Van Engelenhoven - State Representative
The Chronicle

Pella — House File 111 passed the House on February 2.  By passing this Bill, Iowans’ rights to make decisions about their health care are asserted; it places Iowans in a better position to make decisions about their health care than bureaucrats in Washington and tries to ensure that many of the jobs in the insurance industry located in Iowa, will be here for years to come.  Iowa has over 70,000 jobs related to insurance and financial services and it is important to preserve these jobs while helping these companies to create new ones.  Iowans should be concerned about some of the provisions in the federal health care reform bill.  The federal health care law doesn’t increase competition or choice.  It forces a consolidation of health insurance offerings that will raise our costs.  The Bill requires employers with 50 or more employees to provide coverage or pay a $2,000 fine per worker.  This discourages local businesses from expanding.

House File 149 passed the House on February 2.  This Bill requires State economic development materials advertise that Iowa is a Right to Work state.  Iowa’s Right to Work law protects Iowans from being forced or coerced into joining a union to keep or get a job.

On January 27, Governor Branstad delivered his budget recommendations for FY 2012 and 2013.  The Governor reduces spending and also cuts tax rates to promote job creation.  According to the Governor, the FY 2011 budget spent $6.35 billion including $872 million in expenditure shifts – General Fund expenditures that were funded by one-time and other funds.  The Governor’s recommendation for FY 2012 General Fund expenditures is slightly more than $6.1 billion, a decrease of $185 million to adjusted FY 2011.  This proposal aligns ongoing revenue with ongoing spending, which has not been done the past five years.  Most agencies are cut six percent compared to FY 2011.  The Governor does propose fully funding K-12 education (0 percent allowable growth costs $215 million in State funds) and funds Medicaid with an increase in General Fund expenditures of $529 million, most of which replaces one-time funds used for Medicaid in the previous fiscal year.  The Governor did not include funding for the Culver salary increases which means the State agencies must fund the raises (15% over the two-year contract) with existing resources.  The Governor also recommended two major tax reductions to encourage job growth.  He recommends changing the corporate income tax from a graduated system of six percent, nine percent, and twelve percent to a flat six percent rate.  This reduces corporate income tax revenue by roughly $200 million per year once it is fully implemented.  The second recommendation is that new corporate property be taxed at 60% over the next five years.  

The Governor recommends increasing the tax on casino profits from 22% (for riverboats) and 24% (for racetracks) to a flat rate for both of 36%.  This would generate approximately $200 million per year in new revenue.  

Please feel free to contact me regarding issues that are or will be before the Legislature at (515) 281-3221 or Jim.Van.Engelenhoven@ legis.state.ia.us