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Iowa Legislature Update – Week Ending Jan. 24, 2020

1/24/2020

by Charlotte Eby - Managing Director of Government Affairs, LS2group

View the Iowa Legislative Bill Tracker

Overview/Major Events
Lawmakers gaveled in for a short week, with the Capitol and state government closed to mark the Martin Luther King Jr. holiday on Monday. Subcommittee meetings on bills, which allow stakeholders and the public to comment on legislation, began in earnest.

Among the issues considered and advancing at the committee or subcommittee level this week:

Ban on public vaping
Cost-share limits for patients using insulin with prescription drug coverage
Allowing emergency medical technicians to obtain professional gun permits
A ban on health policies excluding pre-existing conditions if the Affordable Care Act is struck down

Governor Reynolds Unveils School Safety Bureau
Governor Kim Reynolds on Tuesday announced a new initiative to provide law enforcement expertise to Iowa’s K-12 schools. The newly created Governor’s School Safety Bureau will have a group of full-time instructors dedicated to providing school safety training, as well as a new reporting tool to anonymously share safety concerns with authorities.

"Today's announcement is about what the State of Iowa is doing to act, not react, on the critical national issue of school safety," Reynolds said. "We are working to ensure our schools and local law enforcement are prepared to both respond to and deter threats to the safety of students, teachers and staff. Sensible actions today can prevent tragedy tomorrow."

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.”

July Rural Mainstreet Index Above Growth Neutral: Bankers See Negative Tariff Impacts on Economy

7/22/2019

July Survey Results at a Glance:

For the seventh time in the past eight months the Rural Mainstreet Index remained above growth neutral.
Bankers reported that approximately one in 10 farm operating loans from 2018 were not repaid and were rolled into 2019 loans.
Less than half of bank CEOs think the Federal Reserve should reduce short-term interest rates at its July meetings.
Almost nine of 10 bankers reported that tariffs and trade skirmishes have had, or will have, a negative impact on their local economy.

OMAHA, Neb. (July 18, 2019) – The Creighton University Rural Mainstreet Index (RMI) for July 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 July indicated positive growth for the region.

Overall: The overall index fell to 50.2 from 53.2 in June. This is the seventh time in the past eight months that the index has remained 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, indicates negative growth for the month.

“Higher agriculture commodity prices and rebuilding from recent floods supported the Rural Mainstreet Index (RMI) for the month. Furthermore, almost nine of 10 bankers reported tariffs and trade skirmishes have had, or will have, a negative impact on their local economy. This is up from eight of 10 recorded last September,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

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?”

Rural Mainstreet Index Slumps Below Growth Neutral: Farm Loan Defaults Expected to Double from 2017 Rates

5/20/2019

May Survey Results at a Glance:

For the first time since November the Rural Mainstreet Index (RMI) fell below growth neutral.
Bank CEOs project the percentage of farm loan defaults over the next 12 months will double the default rates for 2017.
In reaction to weak farm income, almost two-thirds of bankers have increased collateral for farm loans.
More than one in four bankers reports rejecting a higher percentage of farm loans due to declining farm income.
The economic confidence index dropped to its lowest level in almost two years.

OMAHA, Neb. (May 16, 2019) – The Creighton University Rural Mainstreet Index (RMI) for May slumped below 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 May indicated negative growth for the month for the region, after five months of growth.

Overall: The overall index for May slipped to 48.5 from 50.0 in April. This is the first time since November of last year the index has fallen below growth neutral, indicating negative growth for the month. The index ranges between 0 and 100 with 50.0 representing growth neutral.

“The trade tensions and tariffs are hammering the farming economy. Grain farmers throughout the region continue to experience losses produced by trade issues and plentiful global supplies. On the other hand, the expanding U.S. domestic economy is supporting livestock producers in the region. For May, according to bankers, the negatives far outweighed the positives,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

According to Lonnie Clark, president of the State Bank of Chandler in Chandler, Minnesota, “The current low farm commodity prices are a negative to farmers.”

Government Affairs Weekly Report - Week 15: Apr. 22-27, 2019

5/3/2019

by CBI Lobbyist Jeff Boeyink - Partner, LS2 Group

Overview / Major Events
The 2019 Session of the Iowa General Assembly came to a close around 2:30 pm on Saturday, nearly a week EARLY (Session was scheduled for 110 days this year and that day doesn’t arrive until this Friday—May 3). The Governor now has 30 days to act on all the budget bills and a host of policy bills that will be delivered to her in the coming days. That said, expect her to act on the Health and Human Services budget early this week (as it includes a significant supplemental appropriation to keep the Medicaid system fully funded through the end of the current fiscal year).

Governor Reynolds weighs in on Session accomplishments
“We made historic investments into pre K-12 Education and put more money into community colleges and our public universities. We protected job creators who hire individuals with past criminal offenses and funded the Future Ready Iowa Initiative, so that Iowans can get the skills they need for cutting-edge careers. Our judicial nominating system was reformed to give Iowans a greater voice. Iowa will also have a first of its kind Children's Mental Health System. And with the Governor’s Empower Rural Iowa Initiative, Iowa is one step closer to seeing growth and prosperity in every single corner of our state.

“While a lot was accomplished, we’re not finished yet. Next year, I will push again for a constitutional amendment to restore felon voting rights and work to expand access to contraception. We will also continue our focus on growing the economy as well as create opportunities to attract top talent to Iowa by sharing our story as a vibrant, affordable, and welcoming state."

View the Legislative Bill Tracker.