 | Overview / Major Events Only one week remains until the second legislative funnel takes place and significantly reduces the number of policy bills still in play for the remainder of the 2016 legislative session. This week was dominated by extensive floor debate in both Chambers as legislators raced to get bills passed in time to be considered by committees in the opposite house by the March 11 deadline. Next week expect a combination of committee meetings and floor work to round out the list of eligible bills. That said, the most significant policy decisions yet to be made are not even on the radar screen this week as negotiations on issues such as school aid, tax coupling, and water quality are continuing in private. State Revenue Stagnant in February and Below Estimates for the Year The Department of Management released the February state revenue numbers and the report shows revenue growth has recently stagnated—with year-to-date numbers now falling a full percentage point behind estimates. General fund receipts for February 2016 grew only 0.7% over the same period last year. And, year-to-date receipts have grown by 2.7% while the Revenue Estimating Conference had pegged estimated growth at 3.7%. (And while one percentage point might not sound like much, each point is equal to more than $70 million.) |
| Here are the year-to-date numbers for each key revenue category, compared to the REC estimate on which the current FY16 budget was based:
The Revenue Estimating Conference will meet on March 16 to review estimates for the current fiscal year (FY16) and for the next fiscal year (FY17). Any reduction in the REC estimate for FY17 will trigger a reduction in the state spending limit and could require the Governor to submit a new revised budget based on that lower number. The Deal that Would Ensure an April Adjournment For each of the last five years the General Assembly has run past the scheduled adjournment date—in two of those years the Session ran well into June (2011 and 2015) as budget negotiations were slow to conclude. This year, there are key differences between the House and the Senate on the growth of state aid to our K-12 schools and over whether or not the state will couple with federal changes on Section 179 expensing. On school aid, the Senate has set a growth level of 4.0% and the House sits at 2.0% (with the Governor at 2.45%). On coupling the House has passed legislation to couple on Section 179 expensing for the 2015 tax year, while the Senate has resisted this $95 million charge to the state treasury (with the Governor NOT including coupling in his proposed budget). And do not forget, any deal brokered between the House and the Senate is of little worth if they do not have the blessing of the Governor (and given the vetoes of last summer, that key factor hangs large in the current discussions). Thus, for a deal to get done (and there is a deal to do here), everyone needs a win—including the Governor. And getting a deal done is key to getting the General Assembly out of town by its mid-April scheduled adjournment date. What might such a deal look like?
Efforts on Behalf of Community Bankers of Iowa:
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