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Iowa Legislature Update – Week Ending Mar. 13, 2020

3/13/2020

by Charlotte Eby - Managing Director of Government Affairs, LS2group

View the Iowa Legislative Bill Tracker

Overview/Major Events
First COVID-19 diagnoses in Iowa
Gov. Kim Reynolds activated the State Emergency Operations Center Sunday after three Iowans tested positive for coronavirus or COVID-19, the first such cases in the state. State public health officials continued to report additional Iowa cases as the week wore on. As of Thursday morning, a total of 14 Iowans had tested positive for the virus.

The people at the center of the first cases are from Johnson County and had recently been part of a cruise in Egypt. The individuals were isolated at their home to avoid transmission to others. The other diagnosis was in Pottawattamie County on the western edge of the state. State Epidemiologist Dr. Caitlin Pedati said public health officials were assessing potential exposure to additional individuals.

“These cases are an important reminder that all Iowans need to help prevent the spread of illness by washing hands frequently, staying home when ill, and covering coughs and sneezes with a tissue,” she said.

The state’s three public universities – Iowa State University, the University of Iowa, and the University of Northern Iowa – announced classes would move online for two weeks starting March 23 to help mitigate any potential spread on campus. Students were strongly encouraged to stay home during this time, although residence halls and dining services will remain open.

“We know how disappointing and disruptive this is to our students, faculty and staff,” said Iowa State University President Wendy Wintersteen in a statement. “This decision was made in consultation with the Board of Regents out of an abundance of caution to prioritize health and safety as the outbreak continues to spread and circumstances rapidly evolve.”

Iowa Legislature Update – Week Ending Feb. 28, 2020

2/28/2020

by Charlotte Eby - Managing Director of Government Affairs, LS2group

View the Iowa Legislative Bill Tracker

Overview/Major Events
Chambers have busy week of floor debate
The Iowa House and Senate passed a flurry of bills this week, working to advance legislation before a second funnel deadline will winnow the number of bills under consideration. Legislative leaders lined up their top priorities for debate this week.

Among the issues advancing included a Senate bill that funds efforts to help teachers and schools address violent student behavior in the classroom. Gun advocates flooded the Capitol on Thursday, anticipating debate on a bill that would limit cities or counties from enacting restrictive gun measures.

To remain alive, bills that have passed in one chamber will have to gain approval in a committee in the opposite chamber before a March 19 funnel deadline. The Legislature’s tentative adjournment date for the year is April 19.

Governor signs school funding equity bill to cover busing costs
Gov. Kim Reynolds this week signed a bill that will provide funding to rural schools for their transportation and busing needs. SF2164 will funnel $7.2 million to schools that spend more on annual transportation costs than the statewide average of $347 per pupil. A total of 204 Iowa schools will receive additional dollars.

“This legislation will help Iowa’s many rural school districts absorb transportation costs and put more money into the classroom,” Reynolds said. “Education is always a top priority, and we will continue to look for ways to provide every school, educator, and student with the tools for success.”

Iowa Legislature Update – Week Ending Feb. 14, 2020

2/14/2020

by Charlotte Eby - Managing Director of Government Affairs, LS2group

View the Iowa Legislative Bill Tracker

Legislative “funnel” deadline looming
Lawmakers raced this week to advance bills before next Friday’s so-called “funnel” deadline. It’s the day policy bills must gain committee approval in one chamber to remain alive for the remainder of the legislative session.

Dozens of subcommittee meetings were scheduled each day this week, creating a chaotic atmosphere at the Capitol. Among some of the higher profile proposals to advance in the House included a constitutional amendment declaring there is not a right to an abortion.

Statehouse observers predict another hectic committee schedule next week. Tax and spending bills are not subject to the funnel and are often considered near the end of session. Key legislators will start crafting the fiscal year 2021 budget when they get a report in March projecting state revenues.

Iowa Legislature Update – Week Ending Jan. 31, 2020

1/31/2020

by Charlotte Eby - Managing Director of Government Affairs, LS2group

View the Iowa Legislative Bill Tracker

Overview/Major Events
Trade deal praised as good for Iowa farmers and manufacturers
The North American trade deal inked this week known as USMCA earned praise from Gov. Kim Reynolds, who said it would expand markets for Iowa producers with Iowa’s top trading partners – Mexico and Canada.

“President Trump successfully negotiated a strong, balanced and reciprocal trade agreement that will benefit Iowa and the entire nation,” Reynolds said in a statement. “Years from now, USMCA will prove to be a major boost to Iowa’s economy, especially for families, farmers, manufacturers and small businesses.”

Gov. Reynolds makes appointment to the Iowa Supreme Court
Gov. Kim Reynolds this week appointed Swisher attorney Dana Oxley to serve as a new justice on the Iowa Supreme Court to fill a vacancy created by the death of Chief Justice Mark Cady last year. Oxley practices with a prominent Cedar Rapids law firm and serves as an adjunct law professor at the University of Iowa College of Law.

“Dana Oxley is an exceptional lawyer with a uniquely Iowa story,” Reynolds said in a statement announcing the appointment. “She will be a valuable new addition to the Iowa Supreme Court. I look forward to watching her serve Iowans in this important role for years to come.”

Iowa Legislature Update – Week Ending Jan. 17, 2020

1/17/2020

by Charlotte Eby - Managing Director of Government Affairs, LS2group

Legislature begins 2020 session with new leadership
Iowa lawmakers dropped the gavel on the 2020 session Monday, pledging to address challenges that include a shortage of skilled workers and limited access to affordable child care for some across the state.

The biggest change at the State Capitol for the 2020 session is the new leadership in the House. Republican Rep. Pat Grassley of New Hartford, grandson of U.S. Sen. Chuck Grassley, took over as Speaker. He assumes the role from retiring Speaker Linda Upmeyer, the first woman in Iowa to serve in the position. In another leadership change, Rep. Matt Windschitl of Missouri Valley is serving as the new House Majority Leader.

Speaker Pat Grassley was accompanied by his grandfather and family to mark the occasion. He previously served as chair of the powerful Ways and Means Committee, setting budget policy for the state. In his opening address, he called on fellow House members to work together in a bipartisan fashion to reach common goals and show they are not like their counterparts in Washington D.C.

November Rural Mainstreet Index Rises to Highest Reading for 2019: Bankers Expect Holiday Sales to Grow by only 1.3% from 2018

11/25/2019

November Survey Results at a Glance:

Overall index climbs to highest reading for 2019. It also marked the fourth time in the past five months that the overall index has risen above growth neutral.
The trade war with China and the lack of passage of the USMCA are driving confidence and the economic outlook lower for most areas of the region.
On average, bankers, expect a 1.3% expansion with 17.1% of bank CEOs anticipating a decline in retail sales from last year.
Bankers reported that approximately 16.7% of farmers and 5.5% of business owners in their area had no organization succession plan.

OMAHA, Neb. (Nov. 21, 2019) – The Creighton University Rural Mainstreet Index (RMI) for November climbed above growth neutral for the fourth time in the past five months, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

Overall: The overall index rose to 54.2 from 51.4 in October. Although still tepid, this is the highest reading for 2019. It also marked the fourth time in the past five months that the overall index rose above growth neutral.

“Federal agriculture crop support payments and somewhat higher grain prices have boosted the Rural Mainstreet Index slightly above growth neutral for the month. Given a continued weak rural economy, bank CEOs, on average, expect holiday buying to increase by only 1.3% above last year’s levels,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Jeff Bonnett, president of Havana National Bank in Havana, Illinois, reported that, “The latest harvests are showing significant declines in test weights leading to the point that 2019 harvest production looks to be running below average.” Bonnett goes on to say that grain prices are still sitting at extremely low levels for such yields.

Farming and Ranching: The farmland and ranchland-price index for November increased slightly to a weak 40.4 from October’s 40.3. This is the 72nd straight month the index has remained below growth neutral 50.0.

The November farm equipment-sales index declined to 37.5 from October’s 39.7. This marks the 74th month the reading has remained below growth neutral 50.0.

October Rural Mainstreet Index Climbs Again: Trade War and Stalled USMCA Batters Economic Confidence

10/21/2019

October Survey Results at a Glance:

After falling below growth neutral in August, the Rural Mainstreet Index jumped slightly above 50.0 for September and October.
Bank CEOs across the region reported significantly lower corn and soybean yields.
Economic confidence fell to lowest level in two years.
Almost three of four bankers reported negative impacts from the trade war.
Approximately 43% of bankers support halting Federal Reserve rate hikes over the next 12 months.

OMAHA, Neb. (Oct. 17, 2019) – The Creighton University Rural Mainstreet Index (RMI) for October climbed above growth neutral, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

Overall: The overall index rose to 51.4 from 50.1 in September. Although still weak, this is the highest reading since June of this year. It also marked the third time in the past four months that the overall index has risen above growth neutral.

“Federal agriculture crop support payments and somewhat higher grain prices have boosted the Rural Mainstreet Index slightly above growth neutral for the month. Even so, almost three of four bank CEOs, or 73%, reported continuing negative impacts from the trade war,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

But as stated by Jim Stanosheck, CEO of State Bank in Odell, Nebraska, “What is happening in the economy today is exactly what voters voted for.”

Farming and Ranching: The farmland and ranchland-price index for October slumped to a weak 40.3 from September’s 43.1. This is the lowest reading since March of this year and the 71st straight month that the index has remained below growth neutral 50.0.

Jeff Bonnett, president of Havana National Bank in Havana Illinois, said, “Hopefully the true corn acres planted, and more importantly, overall yields will be made public here soon now that we are well into harvesting this year's crop. I am not sure why this is such a secret and why we do not get more accurate information based upon certification of acres planted back in July?”

The October farm equipment-sales index improved to 39.7 from September’s 35.9. This is the highest reading for the index since June of this year, but marks the 73rd month that the reading has remained below growth neutral 50.0.

September Rural Mainstreet Index Bounces Back Above Growth Neutral: Four of 10 Bankers Report Recessionary Conditions

9/23/2019

September Survey Results at a Glance:

After falling below growth neutral for August the Rural Mainstreet Index jumped slightly above the 50.0 reading for September.
More than four in 10 bank CEOs report that their local economy is in a recession.
As a result of continuing weakness in the farm sector, more than half of bankers reported increasing collateral for farm loans, and one in four rejected a higher percent of farm loan applications.
Bankers expect farm equipment sales in their area to decline by another 7.4% over the next 12 months.

OMAHA, Neb. (Sept. 19, 2019) – The Creighton University Rural Mainstreet Index (RMI) for September climbed above growth neutral according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

Overall: The overall index rose to 50.1 from 46.5 in August. This marks the third time in the past five months that the overall index has risen above growth neutral.

The trade war with China and the lack of passage of the USMCA (NAFTA’s replacement) are driving confidence and growth lower for most areas of the region.

“Despite a $16 billion federal government support package this year and somewhat stronger grain prices, more than four in 10 bankers are reporting that their local economy is in a recession,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

As reported by Dale L. Leighty, chairman and CEO at First National Bank of Las Animas, Colorado, “Grain prices are (still) a big negative for our customers.”

Rural Mainstreet Index Drops to Lowest Level in Two Years: Trade War Having Negative Impacts

8/19/2019

August Survey Results at a Glance:

The Rural Mainstreet Index fell below growth neutral to its lowest level in almost two year.
Three of four bank CEOs reported the trade war was having a negative impact on their local economy.
Seven of 10 bankers support continuing, or even raising tariffs on imported Chinese goods.
Despite worsening economic conditions on the farm, bankers expect only a modest 4% rate of farm loan defaults over the next year.
Business confidence index plummeted to its lowest level since October 2017.

OMAHA, Neb. (Aug. 15, 2019) – The Creighton University Rural Mainstreet Index (RMI) fell below growth neutral for the only the second time this year. According to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy, the RMI for August indicated negative growth for the region.

Overall: The overall index slumped to 46.5 from 50.2 in July. This is the lowest reading for the index since October 2017. The index ranges between 0 and 100 with 50.0 representing growth neutral, and an RMI below the growth neutral threshold. 50.0, indicates negative growth for the month.

“The trade war with China and the lack of passage of the USMCA (NAFTA’s replacement) are driving growth lower for areas of the region with close ties to agriculture. Despite a $16 billion federal government support package coming soon, a drop in farm income is negatively affecting the Rural Mainstreet Economy,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Three of four bankers reported the trade war was having a negative impact on their local economy.

As stated by Jeffrey Gerhart, CEO of the Bank of Newman Grove in Newman Grove, Nebraska, “Trade wars have been and will continue to be a drain on our ag economy”.

“Despite the negative impact of tariffs and the trade war, only 28.2% of bankers support cutting tariffs on imported goods from China,” said Goss.

Rod Cornelius, market president for Pinnacle Bank in Grand Island, Nebraska reported, “I quickly surveyed 12 local producers, a majority indicated (U.S. should) increase tariff pressure - go big or go home. Although the majority again indicated the tariffs are negatively impacting the local economy.”

June Rural Mainstreet Index Climbs Above Growth Neutral: Farm Woes Raise Loan Defaults for One-Fourth of Bankers

6/21/2019

June Survey Results at a Glance:

For the sixth time in the past seven months the Rural Mainstreet Index climbed above growth neutral.
More than one in four bank CEOs reported rising loan defaults due to farmer financial woes.
Almost half of bankers reported that due to crisis level farm income, farmers in their area have responded by selling the farm, or otherwise leaving the farm.
Almost seven of 10 bank CEOs support continuing or raising current tariff levels.

OMAHA, Neb. (June 19, 2019) – The Creighton University Rural Mainstreet Index (RMI) for June rose above growth neutral for the month. According to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy, the RMI for June indicated positive growth for the region.

Overall: The overall index climbed to 53.2 from 48.5 in May. This is the sixth time in the past seven months that the index has risen above growth neutral. The index ranges between 0 and 100 with 50.0 representing growth neutral, and an RMI below the growth neutral threshold. 50.0, indicating negative growth for the month.

“Higher agriculture commodity prices and rebuilding from recent floods boosted the Rural Mainstreet Index (RMI) for the month. Furthermore, despite the negatives from the trade war, 69.4 percent of bankers support either raising, or continuing current tariffs,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Jeff Bonnett, president of Havana National Bank in Havana, Illinois, said it has been estimated that anywhere from 15 to 20 million acres were not planted in corn.

According to Bonnett, “Based upon this information, corn prices should be in the $5.75 to $6 (or more) a bushel range. What are we missing? Will the true corn acres planted be revealed after the required certification through FSA due by July 15th?”