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Overview / Major Events
The first week post-funnel #1 has been dominated by floor work in the House and Senate as policy committees take a break and bills are debated and sent to their opposite Chambers. Most current work involves legislation that is not controversial or has a high level of consensus amongst the members. That said, next week expect debate on more controversial subjects such as the energy omnibus bill (SF 2311) and workers’ comp fraud (SF 2305), which do not have House companion legislation and will need to clear a House committee prior to March 16 to remain eligible.
The biggest news of the week arrived with the release of the Senate Republicans’ tax reform package—the most significant overhaul of the tax code proposed in more than three decades.
Senate Republicans Propose Sweeping Tax Reform and Relief
On Wednesday, Senate Republicans introduced SSB 3197, a sweeping and comprehensive reform of Iowa’s state income tax code (both personal and corporate). The bill was quickly fast-tracked through subcommittee and full Senate Ways and Means Committee on Thursday and will be eligible for full Senate consideration next week.
Rural Mainstreet Index Sinks for January: Rising Farm Loan Defaults Identified as Greatest 2018 Challenge
January Survey Results at a Glance:
OMAHA, Neb. (Jan. 18, 2018) – The Creighton University Rural Mainstreet Index declined slightly in January from December’s weak reading, remaining below growth neutral, according to the latest monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.
Overall: The index, like all indices in the survey, ranges between 0 and 100 with 50.0 representing growth neutral, fell to 46.8 from 47.8 in December. Though the overall index remained below growth neutral, it is significantly higher than the reading for January 2017.
“While the overall Rural Mainstreet Index (RMI) for January declined and remained below growth neutral, year-over-year indices are trending higher. Clearly, based on our recent surveys, the negatives are getting less negative,” said Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.
When asked to name the greatest 2018 economic challenge for their banks, four in 10 bankers reported that loan defaults represented the biggest challenges for the year ahead. This is well ahead of the second ranked challenge of competition from Farm Credit coming in at 15.6 percent.
Farming and Ranching: The farmland and ranchland-price index for January rose to 42.2 from 39.8 in December. This is the 50th straight month the index has fallen below growth neutral 50.0.
Rural Mainstreet Index Improves for December: Retail Sales Soar to Highest December Reading Since 2014
December Survey Results at a Glance:
OMAHA, Neb. (Dec. 21, 2017) – The Creighton University Rural Mainstreet Index improved from November’s weak reading but remained below growth neutral, according to the latest monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.
Overall: The index, like all indices in the survey, ranges between 0 and 100 with 50.0 representing growth neutral, expanded to 47.8 from 44.7 in November. While the overall index remained below growth neutral, it is up approximately 11.4 percent from December, 2016.
“While the overall Rural Mainstreet Index (RMI) for December remained below growth neutral, this is the highest December reading that we have recorded since 2014. Clearly, based on our recent surveys, the negatives are getting less negative,” said Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.
Only one-fifth, or 20.4 percent, of bank CEOs reported that their local economy was expanding. While this indicator remains bearish, it is well up from the 8.7 percent reporting an expanding local economy in February 2016.
by Dave Caris, CEO - Community Bankers of Iowa
Tax reform legislation has not yet been introduced in the Iowa Legislature, but the Governor, the House and the Senate are all expected to release their versions of tax reform legislation in the next several weeks. Tax or Ways and Means Committee bills are not subject to the funnel deadlines of the Legislature, so comprehensive tax reform, including the issue of credit union taxation, will be a live issue until the end of the Legislative Session in April. Prior to the introduction of legislation and the resulting debate, the Credit unions have launched a massive media and grassroots campaign in an effort to maintain their "FREE RIDE."
It's important that bankers speak out to policy makers on this critical issue to counter the onslaught of contacts from credit unions. The Iowa Bankers Association has developed an excellent and quick method of finding and emailing your State Legislator to speak out on this issue. Just click here. The IBA and CBI are united on this major issue. We urge you to email your State Senator and Representative and, in your own words, tell them it's time to end the free ride. The following are a few key points you may want to consider:
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