At approximately 11:30 p.m. Wednesday, May 19, the 2021 legislative session ended at the capitol. The term for ending the session is called Sine Die, which in Latin means to adjourn for the last time. The session was interesting to say the least. There were dramatic changes made in tax policy this past session. The legislature and governor also made a big change in broadband funding as well as child care. I will give some of the highlights of the session as I see them.
Broadband is one of the important pillars to strengthening rural Iowa’s vitality. Broadband service is necessary for growth of new and existing businesses, big and small. As more jobs can be done from home, it is possible to work for companies that have headquarters in any of our 50 states. But these jobs require fast and dependable internet capability. Iowa has some catching up to do so we can compete with other states, especially in our rural areas. The legislature has put $100 million into broadband investment for next year and then looking at the needs from year to year from that point on.
In past years, you have heard me speak about the child-care cliff, where a low-income Iowan would lose all childcare benefits if he/she took a small raise. A parent could lose up to $1,500 a month in benefits by accepting $100 a month extra in pay. It penalized Iowans for working harder; it penalized a person for trying to be more successful. This bill that was passed creates stair steps out of the program by decreasing benefits as income rises, instead of cutting off benefits completely. This is an important piece of the puzzle to incentivize Iowans who want to work.
The fiscal year budget for this coming year starts on July 1, 2021, and ends on June 30th, 2022. The agreement between the House and Senate calls for $8.118 billion in spending. I am glad that we were able to raise the funding for justice systems by $35 million. This important appropriation will help fund family courts, which have been successful in reducing recidivism. It will also fund equipment for highway patrol and the hiring of more personnel, and Department of Corrections to hire more personnel as well.
The final Appropriations bill also raises Community College funding by $6 million, nursing home funding by $20 million, and home- and community-based services by $11 million.
Tax Omnibus Bill
The tax bill that was passed out the House and Senate is the most dramatic tax bill that we have passed since I took office in 2015. It has many moving parts, and so here we go:
— Child-care tax credit expansion
— Repeal of income tax on any COVID-related grants, state or federal
— State inheritance tax will be proportionately phased out over the next four years
— Bonus depreciation change allows for immediate deduction of capital assets (coupling with IRS)
— Elimination of the mental health property tax levy being accessed at the county level
— Elimination of the property tax backfill on commercial property over five or eight years
The state will be funding the mental health services phased in over the next two fiscal years. I’ve always felt that funding mental health through property taxes is unfair. General fund appropriation makes more sense. I believe that Iowa may be the only state to fund it through property taxes.
The part I like the least about the new tax bill is the elimination of the commercial and industrial property tax backfill. I’ve fought against this, because I know that it creates more pressure on our municipalities. I do believe that we have approached this responsibly enough to ease that pressure. The phase out will not begin until next fiscal year (2023) and then will take place over five or eight years, depending on growth in property tax valuation compared to statewide growth.
The bill that didn’t pass (Bottle Bill)
I am very disappointed to report that the Bottle Bill did not pass again this year. I have stated publicly and at the capitol that we have to get another penny to the redemption centers. Without bringing the centers up to 2 cents per can or bottle, the whole system will eventually implode from within. The problem is that a lot of people have different ideas on how to address the issue, but they aren’t able to agree on the details to get a bill written.
Special session for redistricting
In Iowa, we use the U.S. Census numbers to determine how to assign the congressional maps and also state House and Senate districts. Iowa’s system to draw the maps is done by the Legislative Services Agency (LSA). The LSA is a non-partisan agency that works at the capitol. When they draw the map to determine the new districts, we as a legislature vote on the map as written. If the map is not approved, a second map is drawn. If the second map is not approved, the third drawing becomes the final and official map. This process is usually taken care while we are in session but was pushed back this year because Census numbers are late due to COVID-19. We will most likely need to go back in August for a special session to vote on the new district maps as drawn. Iowa’s system is considered one of the best in the nation. It does not allow for gerrymandering by the party that is in power.
This year has been a little different at the capitol as we were trying our best to work around the restrictions of COVID-19, but we got through it with flying colors. I want to thank the constituents of District 12 for the amazing honor of being your voice at the Iowa Capitol for the last seven years.