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Terry Branstad

Iowa Gov. Terry Branstad delivers his 2016 Condition of the State address Jan. 16 before a joint session of the Iowa Legislature at the Statehouse in Des Moines.

The legislators who make up the 2017 General Assembly will face a number of pressing state issues.

DES MOINES — Candidates across the state are knocking on doors and speaking at forums, seeking a seat in the Iowa Capitol for next year’s session of the Iowa Legislature.

Critical election races will help determine who controls the agenda when legislators resume their work in January. That’s especially true for seats in the Iowa Senate, where, going into the election, Democrats occupy just two more seats than Republicans.

With the Nov. 8 election in mind, here are some of the top issues that legislators will face in 2017.

Water quality

Legislators in 2016 were unable to agree on a way to fund water quality improvement projects, so the task falls on the next group to continue the effort.

The state needs an estimated $4 billion to fully fund a plan to reduce pollutants in its waterways. The federal government has ordered the state to take action because those pollutants are flowing into the Mississippi River and Gulf of Mexico, where they are killing marine life.

Adding attention to the issue is a lawsuit brought by a Des Moines water utility that claims it incurs extra costs to clean water for its customers because of pollutants introduced into the Raccoon River by drainage districts in three northwest Iowa counties.

Gov. Terry Branstad made water quality a top priority during his condition of the state address to legislators prior to the 2016 session, but no action was taken after legislators could not agree on a funding mechanism.

Branstad proposes splitting future revenue from the school infrastructure sales tax with water quality efforts. Republicans in charge of the House proposed shifting money from other sources to water quality projects. Democrats in charge of the Senate did not act on any proposals.

Support from interest groups continues to build for a sales tax increase to fund a natural resources trust fund created by voter approval in 2010. The trust fund would be devoted to a variety of natural resources programs, including those designed to improve water quality.

But strong opposition to a tax increase remains.

“Legislators have heard a growing uproar over the lack of action over drinking and recreation waters. Iowans want more than a drop in the bucket solutions. They want to see measurable water quality improvements,” Ralph Rosenberg, executive director of the Iowa Environmental Council, said in an emailed statement.

The council is among the groups calling for the sales tax increase to finance the trust fund.

The trust fund “provides sustainable funding to support Iowa’s diverse natural resources that is immediate and accountable,” Rosenberg said. “We cannot wait.”

Medicaid oversight

Legislators will be involved in oversight of the new private management of the state’s $5 billion Medicaid program.

In 2016, Branstad transferred management of the Medicaid program to three private health care companies, saying the move would provide better care options, more efficient service for recipients and save money for the state.

Branstad maintains the transition has been successful, but some patients say they are losing services, and providers say they are not being adequately reimbursed.

“We’ll be talking about oversight because (the transition) has not gone smoothly,” said Rhonda Shouse, an advocate from Marion. “I think oversight is definitely the top thing we will be talking about (with legislators).”

Education funding

More than half of the state’s general fund goes to funding for public schools, including K-12 schools and the state’s regent universities. And legislators in recent years have engaged in many a contentious debate over those funding levels.

In addition to haggling over general funding levels, legislators will face other public school funding issues.

Many school districts want legislators to alter the state’s school funding formula because of inequities in permitted per-pupil spending levels and transportation costs.

Schools are set to start a summer reading program to help struggling readers catch up and avoid having to repeat early grades.

“There’s a bottom, baseline funding that affects all students across Iowa that has been insufficient,” Tammy Wawro, president of the Iowa State Education Association, said about general state aid. “And then there’s our children who are in our most needy areas who need some extra help and extra support.”

School choice proponents in recent years have proposed increasing tax credits for tuition assistance and creating education savings accounts.

And the board that governs the University of Iowa, Iowa State University and the University of Northern Iowa has asked for additional funding to help keep tuition from increasing.

Medical cannabis

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Advocates for an expanded medical cannabis program in Iowa have put heavy pressure on legislators in recent years. That is likely to continue in 2017, when the current, limited program is scheduled to expire.

Current law allows parents to possess cannabidiol, a medicinal byproduct of the marijuana plant, to treat children who suffer from epileptic seizures. But it is challenging for parents to acquire cannabidiol, because many states that produce the product do not allow sales to non-residents and it is against federal law to carry the product across state lines.

Advocates for an expanded program want the state to permit the growth, production and sale of cannabidiol. They also want more medical issues to be covered by the law, including cancer, multiple sclerosis, post-traumatic stress disorder and others.

Opponents say there is insufficient evidence to support cannabidiol as a medicinal product.

“We have to have something new to protect the kids with epilepsy that are already seeing great results. They obviously still need access,” Sally Gaer, a West Des Moines advocate whose daughter suffers from epilepsy, said while calling for a more expansive program that treats more ailments and allows for the product to be produced and distributed in Iowa.

Tax policy

Tight state budgets have prevented much in tax policy changes since the landmark commercial and industrial property tax reform approved in 2013.

Legislators in 2016 debated whether the state should tweak its tax laws to match changes made to federal tax laws.

Ultimately, legislators did make the changes to state tax laws, which are known as “coupling,” and prevented an additional $95 million in taxes from being levied on farmers, small business owners and teachers who expected the tweaks. The coupling debate could return in 2017.

Republicans in recent years have proposed broad income tax policy reform, including a simplified state tax code that would cut rates to 20 percent across the board or a two-tiered system that would allow taxpayers to file under the current structure or under a flat rate — different proposals in recent years have been 4.5 percent and 5 percent — with few or no deductions.

Opponents to that brand of tax reform, mostly Democrats, cite a concern for the lost state revenue, which could affect program funding.

The Iowa Taxpayers Association, in conjunction with the national Tax Foundation, this summer published a report that detailed other potential tax policy changes.

Jeff Smith, president and CEO of the Iowa Taxpayers Association, said his group is aware of the state’s budget constraints and will suggest to legislators tax structure changes rather than tax cuts.

“Our focus is not so much on tax cuts, but more on tax structure, trying to make the code more simpler and more fair across the board,” Smith said. “Budget neutral, I think, at least initially, is going to be a key factor if any tax discussion is even going to be brought to the table.”

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