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Government Affairs Weekly Report - Week 16: Apr. 23-26, 2018

4/27/2018

by CBI Lobbyist Jeff Boeyink - Partner, LS2 Group

Overview / Major Events
This will be an abbreviated report this week as Session has drug into a second week of overtime and little has changed since last week. That said, the LS2group lobby team has been a constant presence at the Capitol and will be likely working well through today.

Tax Deal Reached (but no language yet available)
It has been confirmed that House and Senate leaders, as well as the Governor’s office, have reached agreement on the framework of a tax reform package. It is not currently available in bill form (nor has anyone released a summary document), but here is what I believe may be included (this is not an exhaustive list):

First year tax cut of up to 10% on individual income taxes (there would NOT be any change in federal deductibility the first year).
Second year and beyond there would be additional individual income tax rate cuts that are tied to gradual elimination of federal deductibility.
Iowa’s 12% top corporate income tax rate will be reduced to less than 10% through the elimination of corporate federal deductibility.
NO changes to any tax credit programs, with that conversation moved to an interim study.
Additional business tax reductions through Section 179 coupling and qualified business income deductions.
Some form of triggers will be included to slow down the tax cuts in year two and beyond if revenues fall below certain levels (protection against a Kansas situation).

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Government Affairs Weekly Report - Week 15: Apr. 16-19, 2018

4/20/2018

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by CBI Lobbyist Jeff Boeyink - Partner, LS2 Group

Overview / Major Events
Day 100 has come and gone (it was on Tuesday). We are now officially in OVERTIME and the per diem paid to legislators has ended.

This week marked minimal floor activity in the General Assembly, but a great deal of behind-the-scenes work on budget and tax policy between the House, Senate, and Governor’s office.

Governor Reynolds canceled an economic development trip to NYC this week to remain at the Capitol and directly engage with House and Senate leaders in negotiations on the tax legislation.

According to a number of knowledgeable sources, the issues on the tax legislation have been significantly resolved and a deal could be consummated as early as the end of this week. If this comes to pass, budget differences will quickly fall into place and we could make a run to adjournment next week.

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Government Affairs Weekly Report - Week 14: Apr. 9-12, 2018

4/13/2018

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by CBI Lobbyist Jeff Boeyink - Partner, LS2 Group

Overview / Major Events
This will be an abbreviated Weekly Report, as Session is currently in a grind to nowhere and yet requires a constant presence in the Capitol that makes compilation of this Report a challenge.

No Budget Deal. No Tax Deal.
Despite on-going discussions and negotiations, House and Senate leaders have not been able to agree on a joint tax cut deal or joint budget targets. In fact, on the tax front, it appears the parties are farther apart than when the week began.

Unless there is a major breakthrough by the end of this week, we will all need to settle in for significant overtime (Session expenses run out on April 17). Adding to the uncertainly, it is rumored that a significant number of legislators are not able to be in Des Moines the week of April 23 (meaning we could be looking at early May before all is complete).

House Republicans Release “The Middle Class Tax Relief Act”
On Wednesday night House Republicans announced the details of their own tax cut plan called “The Middle Class Tax Relief Act”.

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Government Affairs Weekly Report - Week 13: Apr. 2-5, 2018

4/6/2018

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by CBI Lobbyist Jeff Boeyink - Partner, LS2 Group

Overview / Major Events
Today marks the 88th day of what is scheduled to be a 100-day Session. On April 17 the per diem expenses paid to members will end and legislators will begin to work at their own expense. This circumstance normally triggers enhanced efforts to finish work for the year.

There are two key (and closely related) decisions that must be made prior to making a run to adjournment:

Size of the tax cut for FY19 (while there is desire to do a multi-year tax reform package, settlement of the reduction amount for FY19 would help set the table for starting FY19 budget work).
Joint budget targets for FY19 (agreement between the House and Senate on the total spending amount for each budget area is essential to efficient floor work on the 10 budget bills that must be approved by both Chambers).

As of today, neither of these decisions has been made (or, has been made public). This suggests we still have at least two weeks of additional work before Session ends (and means we are likely to exceed the 100-day expense limit).

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Rural Mainstreet Index Remains Positive: Dodd-Frank Limits Lending for Most Rural Banks

4/5/2018

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March Survey Results at a Glance:

For a second straight month the overall index rose above growth neutral.
Approximately 16.8 percent of grain farmers are expected to suffer negative cash flow for 2018. This is down slightly from 12 months earlier.
The percent of farmland purchases for cash (not financed) declined from 23 percent to 20 percent over the past 12 months according to bankers.

OMAHA, Neb. (March 15, 2018) – The Creighton University Rural Mainstreet Index slipped in March, but remained above growth neutral for a second straight month, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy. This is the first time since the middle of 2015 that we have recorded two straight months of overall indices above growth neutral.

Overall: The overall index dipped slightly to a solid 54.7 from 54.8 in February. The index ranges between 0 and 100 with 50.0 representing growth neutral.

“Surveys over the past several months indicate that the Rural Mainstreet economy is trending upward with improving, but slow economic growth. However, weak agriculture commodity prices continue to weigh on the rural economy,” said Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Jim Eckert, president of Anchor State Bank in Anchor, Illinois, reported, “Recent commodity price increases have helped the mood of our farmers. Our area is somewhat dry and good spring rains will be essential for a good 2018 crop.”

Farming and Ranching: The farmland and ranchland-price index for March dropped to 42.7 from February’s 46.3. This is the 52nd straight month the index has fallen below growth neutral 50.0.

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Rural Mainstreet Index Highest in Almost 4 Years: Bankers Expect 7% 2018 Farm Equipment Sales Decline

4/5/2018

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February Survey Results at a Glance:

The overall index from February’s survey bounced above growth neutral to its highest reading since May 2014.
Almost two-thirds of bank CEOs expect farm equipment sales to trend lower for 2018.
On average bankers expect farm equipment sales to decline by 7 percent in 2018.
One-third of bankers reported no change in their farm lending practices over the past year, while 45.2 percent indicated that their bank had raised collateral requirements for farm loans.

OMAHA, Neb. (Feb. 15, 2018) – The Creighton University Rural Mainstreet Index sprang higher in February from January’s below growth neutral reading. This is the first time since July 2015 the overall index has advanced above 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 overall index soared to 54.8 from 46.8 in January, the highest reading for the overall index since May 2014. The index ranges between 0 and 100 with 50.0 representing growth neutral.

“Given that fewer than one in four, or 23.9 percent, of bankers reported economic growth in their area, the solid February reading surprised me. However, weak agriculture commodity prices continue to weigh on the rural economy,” said Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Jim Eckert, president of Anchor State Bank in Anchor, Illinois, reported, “We are seeing farmers with somewhat reduced income and moderate operating loan carryovers. However, without rain prior to planting, 2018 could be a bad year.”

Farming and Ranching: The farmland and ranchland-price index for February rose to 46.3 from 42.2 for January. This is the highest reading since July 2014, but it is the 51st straight month the index has fallen below growth neutral 50.0.

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Government Affairs Weekly Report - Week 16: Apr. 23-26, 2018

Government Affairs Weekly Report - Week 15: Apr. 16-19, 2018

Government Affairs Weekly Report - Week 14: Apr. 9-12, 2018

Government Affairs Weekly Report - Week 13: Apr. 2-5, 2018

Rural Mainstreet Index Remains Positive: Dodd-Frank Limits Lending for Most Rural Banks

Rural Mainstreet Index Highest in Almost 4 Years: Bankers Expect 7% 2018 Farm Equipment Sales Decline

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