School Funding. March 19, Inside This Issue:

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1 March 19, 2015 Talynn Griggs, Trevor Griggs and Chip Baltimore in the House Chamber. This past week we had an extra helper Trevor Griggs of Boone, IA. Trevor spent his spring break at the Iowa Capitol following Chip Baltimore to learn about state government. School Funding Inside This Issue: School Funding 1 House Approves Measure to Allow Property Owners to Observe DNR Investigations 2 IDALS Announces Funds for Conservation Research and Demonstration Projects is Now Available 2 Iowa Teacher of the Year Nominations due April 25 2 DNR Director: Enforcement Difficult if Water Lawsuit is Successful 3 House GOP Addresses Mental Health Issues 3 Let the Kids Sled! 4 House Passes Binding Arbitration Changes for School Districts and AEAs 4 Continuing the Fight Against Deadly Synthetic Drugs 5 More Iowa Counties become Home Base Iowa Communities 6 House Ways and Means Passes $520 Million Income Tax Cut for Iowa Taxpayers 6 Closing Thoughts 7 Legislative Democrats are not focused on student achievement or learning. They are focused on education spending. There is a difference and the facts clearly support that the Democrats top goal is increasing spending, not improving student achievement. There is no link between setting the supplemental state aid figure and rising student achievement. There is, however, a link between spending more than the state collects and forcing across the board cuts after the fact. House Republicans are not going to spend more than the state collects. The House position continues the legislature s trend of providing significant increases to the state s K-12 system, bringing the 5 year total increase to over $570 million, a nearly 22% increase. According to the Department of Education s Allocation Summary documents, Iowa will spend $10,231 per student in FY 15. That means in classroom of 20, Iowa spends just over $200,000. Current revenue collections are trailing the December estimate. Actual returns are lagging behind the REC projection. If revenue continues to come in below expectations, the March revenue estimate (due March 19) may require that the 1.25% SSA already approved by the House to be revised downward. Spending more taxpayer money above the 1.25% level requires real reductions in other areas of the state budget like Medicaid or it requires an immediate tax increase. During debate in January on the SSA bill, House Democrats suggested raising business taxes and using money originally targeted for debt reduction to increase spending on education.

2 Senate Democrats have taken the position that the Legislature needs to enact a 4% increase now, regardless of the current state revenue numbers, and then figure out how to fund it later. These are same flawed practices former Gov. Culver used to get the state into a huge financial mess during his only term in office. House Approves Measure to Allow Property Owners to Observe DNR Investigations House File 578 was passed by the House on March 7, 2015 by a unanimous 95-aye vote. The bill proposes to explicitly state in the Iowa Code that an owner or person in charge of a property subject to a Department of Natural Resources (DNR) investigation for an environmental regulation violation has the right to be present while the DNR personnel investigates any possible violation and may take independent samples or photographs. The instigation for this legislation are reports that there have been instances in which a property owner does not know that there is a pollution event that is being investigated until they are presented with an administrative fine and a bill for wildlife loss/damages. At that point, the physical evidence of-- for example killed fish have disappeared downstream and so the property owner has no means of contesting or corroborating the departmental accusation and finding. IDALS Announces Funds for Conservation Research and Demonstration Projects is Now Available On Friday, March 13, 2015, the Iowa Department of Agriculture and Land Stewardship issued a press release in which Iowa Secretary of Agriculture Bill Northey announced the State Soil Conservation Committee Research and Demonstration Fund has assistance available to support research or education/demonstration projects that explore sustainable agriculture and projects focused on reducing nonpoint pollution. Funds are available to collaborative teams of scientists, farmers, institutions, soil and water conservation districts and educators. Applications must be submitted to the State Soil Conservation Committee by May 22, A July 1st start date for selected projects is anticipated. Proposals must address issues of nonpoint pollution control. Successful projects should be focused on sustaining and improving environmental quality or the natural resource base on which agriculture depends. Applications should also explain how the projects would enhance the quality of life for farmers, rural communities, and society as a whole. Proposals should clearly explain expected outcomes for the project and how they will assist in working toward these objectives, how project outcomes will be evaluated, and the impact of projects. Funding level for the grant program is established by the State Soil Conservation Committee and it is anticipated that $150,000 will be available this year. Individual grants cannot exceed $50,000 total over a two year period. More information about applying for assistance can be found at The State Soil Conservation Committee has operated this program for several years and there are currently 15 active grant projects. Iowa Teacher of the Year Nominations due April 25 The Department of Education sent out notice this month that the deadline to nominate the 2016 Iowa Teacher of the Year is April 25. The award is an opportunity to recognize an exceptional Iowa teacher who is helping to redefine education. Nominations will be accepted from anyone, including students, parents, school administrators, colleagues, college faculty members and associations. Nomination forms can be found on the Iowa Department of Education s website: The Iowa Teacher of the Year award was established in The annual program is sponsored by the Iowa Department of Education through an appropriation from the Iowa Legislature. 2

3 The Teacher of the Year serves as an ambassador to education and as a liaison to primary and secondary schools, higher education and organizations across the state. Clemencia Spizzirri, a middle-school Spanish teacher from the Des Moines Public Schools, was named the 2015 Teacher of the Year. The 2016 Teacher of the Year will be announced this fall. DNR Director: Enforcement Difficult if Water Lawsuit is Successful On Tuesday, March 17, 2015, the state Environmental Protection Commission (EPC) met in Windsor Heights, at the State DNR office there and at that meeting DNR Director Gipp made comments concerning the lawsuit between Des Moines Water Works and three northwest Iowa counties and noted that it boils down to whether the water coming from the tile drainage districts is considered groundwater or surface water. The crux of the situation is that if a court decides it is groundwater and consequently a point-source of pollution because it discharges from a pipe into a regulated water, it would require a permit under federal law. DNR Director Gipp noted that it would be difficult to implement. Agricultural stormwater discharge, seen as coming from many different sources, is now explicitly exempted from the federal Clean Water Act; as is irrigation return water which in many instances is also removed by subsurface drainage tiles. The Des Moines Water Works utility officially filed its lawsuit against Sac, Buena Vista and Calhoun counties Monday, March 16, The lawsuit alleges the water from the counties drainage districts contain high nitrate concentrations that are almost entirely groundwater and that pollution has since 1995 required the utility to operate its nitrate removal equipment 673 days with a recent spate of 97 days consecutive days. The utility alleges that drainage tiles used to make farmland more productive short-circuits natural conditions that otherwise keep nitrates from entering streams and rivers and contributes to high levels of nitrates that make their way into the Raccoon River. It seeks damages, penalties and other relief in federal court. While about 500,000 central Iowa residents rely on the Raccoon River for drinking water, and the reported cost to operate the nitrate removal equipment is reportedly ~$7,000 (though if one calculates the reported $540,000 over 97 days it comes to just under $5,600 per day) this expense amounts over the last 20 years to about just under $5-million or $250,000 per year or less on average of 50-cents per person per year. In contrast, the likely expense or lost income to farmers to treat 100% of the water which the utility uses less than 1%; is at least 100 times more costly and may even be a magnitude higher (approaching 1,000 times more costly). Director Gipp has indicated that he expects the lawsuit could take up to a decade to be resolved and would likely make its way to the U.S. Supreme Court. He was quoted in a Des Moines Register article published on March 18, 2015, that: This is a hugely impactful case, no matter where you are on the issue. House GOP Addresses Mental Health Issues In the last two weeks, the Iowa House has passed multiple bills that address mental health concerns. These bills are a result of an ongoing need to improve Iowa s mental health system as a part of mental health redesign. The House passed the following bills: Senate File The bill allows the mental health regions to contract with hospitals in bordering states to secure substance abuse or mental health treatment for people. The goal of this legislation is to allow people that need treatment to get services closer to their home and family members. The bill passed the House with a vote of The bill will now go to the Governor s office for his signature. House File Currently, when a person in a hospital is waiting for a mental health bed to open somewhere across the state, their transportation to that bed is uncertain. This bill will allow regions to contract with private entities to 3

4 transport people with a mental illness or substance disorder. This will provide for the safe and secure transport of the person in crisis to another location. This bill passed the House with a vote of House File For years, Iowa hospitals have been struggling to determine where beds are located for mental health patients that come to their emergency rooms in crisis. Patients in crisis have to wait hours in emergency rooms before a bed is found. Once a bed is found, there is no guarantee the bed will remain open until the person arrives at the placement. This bill requires DHS to set up a bed tracking system. After the new system is set up, providers will be able to contact a central access point that will tell them where the nearest bed is located. The bed will now be held for the person until they arrive. This bill passed the House with a vote of Let the Kids Sled! A winter without sledding is no winter at all. Unfortunately, several cities in Iowa have banned sledding and other activities on public property for fear of law suits. House File 570 aims to change that and allow municipalities to open public property to recreational activities without fearing frivolous lawsuits. Under current law, municipalities have limited liability protection when certain activities are conducted on public property. These activities have a normal risk of injury and the law limits the liability of the city if negligence was not involved in the accident. These activities include skateboarding, in-line skating, bicycling, unicycling, scootering, river rafting, canoeing or kayaking. The current list did not include normal activities like sledding or tubing. House File 570 strikes the list and replaces it with the phrase recreational activities to ensure activities enjoyed by Iowans are included. In addition to allowing recreational activities on public land, the bill allows public facilitates to be used for other recreational activities. This would include opening up facilities for recreational activities for children, senior citizens and others. While it seems common sense that Iowans should be able to use public facilities for recreational activities, the risk of lawsuits under current law was a large concern for many communities. House File 570 passed the House with unanimous bi-partisan support, The bill now moves to the Senate for further consideration. House Passes Binding Arbitration Changes for School Districts and AEAs On Wednesday, after two days of debate, the House passed House File 549, which would narrowly change the binding arbitration process for school district and Area Education Agency (AEA) employees. The bill makes three small, yet very significant changes to what an arbitrator is allowed to consider when rendering a decision on union contracts. For too long the scale of fairness has been tilted in favor of labor and against taxpayers during contract negotiations for school districts and AEAs. School boards and their negotiating teams have been forced to build 3-4% yearly raises into their budgets, regardless of district revenues, putting a financial strain on districts. House File 549 seeks to remedy this problem and even the playing field in labor negotiations for teachers. The three changes that the bill would make are solely focused on school districts and AEAs as a cost-containment measure. First, an arbitrator no longer is required to pick one or the other of the two parties final offers on an item when there s an impasse. Instead, the arbitrator is authorized to choose a point between the two offers. This ensures that a compromise position can be reached where both sides can come away from negotiations happy. Second, an arbitrator is no longer be able to consider the public employer s authority to levy taxes to finance an increase in compensation packages. Unions point to government s unlimited ability to raise taxes as the basis for pay increases beyond what current revenues can afford. 4

5 Third, an arbitrator is required to look at a comparison of public and private sector wages, hours, and conditions of employment for workers doing comparable work to get a true and fair comparison. Current law only requires an arbitrator to look at a comparison of other public sector workers. During debate Democrats filed numerous amendments, all of which were not germane to the bill. Six of the amendments expanded the scope of negotiations to include class sizes, teacher prep time, overtime, classroom-expense reimbursements, continuing education costs, and the costs associated with renewing licenses. Another amendment set State Supplemental Aid at 4%, and another dealt with a school financing issue. Additionally, one Democrat Rep offered an amendment which he then divided into 16 separate amendments, mostly reversing the changes that House File 549 makes, and then adding numerous other factors that an arbitrator must consider when rendering a decision. One amendment was adopted during debate however, which was offered by Rep. Greg Forristall. This amendment expands the provisions of House File 549 to all workers employed by a school district or AEA, rather than just teachers. This ensures that all functions of the public education system would be equally affected by the bill. After several hours of debate and five Democrat caucuses, the bill finally passed on a party-line vote of House File 549 now heads to the Iowa Senate where it faces an uncertain future. Continuing the Fight Against Deadly Synthetic Drugs House Republicans have been leading the fight against synthetic drugs in Iowa for the past five years. Starting in 2011, House Republicans passed strong legislation aimed at stopping the spread of deadly synthetic drugs. Unfortunately, it takes more than one or two changes in the code to keep up with these ever changing drugs. This year, House Republicans with the help of County Attorneys, the Criminalistics Laboratory, and others, brought forward House File 567 in an effort to get ahead in the fight against these drugs. House File 567 focuses on three key areas in the law; 1) changing how synthetic drugs are categorized, 2) ensuring imitation controlled substances are appropriately prosecuted and 3) allowing the legislature two years to evaluate the temporary designation of scheduled substances. On Tuesday, the bill passed with overwhelming bi-partisan support They go by different names (K2, Kronic, Black Mamba, MoJo), all synthetic drugs are poison and extremely dangerous. The effects on the user can be different every time. Countless different chemicals are sprayed on plant material to create these drugs. Depending on the chemicals used, and the amount sprayed, the effects can differ drastically each time a person uses. Common side effects include: hallucinations, intense paranoia, anxiety, increased blood pressure, confusion, vomiting, and in some cases it can lead to death. Several Iowans have died after using these drugs and many others have been severely injured. Under current law, the chemicals that make up common synthetic drugs are in several different areas of the code. This makes it difficult for prosecutors to find all the chemical formulas and to ensure that each of the formulas is covered under the same penalties. HF 567 properly groups synthetic drugs as schedule I controlled substances and adds several more chemical formulas discovered by the Criminalists Laboratory. While this may seem like a simple change, keeping these chemicals categorized as schedule I controlled substances helps ensure these drugs will be hard to find and those selling them will face penalties. A major problem faced by County Attorneys when prosecuting sellers of synthetic drugs occurs when the product they are selling is an imitation controlled substance. An imitation controlled substances is one that is not a controlled substance, but because of its look, appears to be a controlled substance. Often times, synthetic drugs, that aren t yet on the schedule drug list, are packaged in a way to make them appear to be illegal synthetic drugs. These imitation controlled substances can have the same or worse effect of the scheduled drug. Until HF 567, selling an imitation controlled substances was how many dealers of synthetics drugs attempted to get around the law. The bill would include imitation controlled substances in the same category as simulated and actual controlled substances. Penalties are increased for imitation controlled substances to match the penalty for selling a simulated or an actual controlled substance. While some argue that these penalties are too strong, the penalty increase is another effective way to help stop the spread of synthetic drugs. 5

6 The law allows Board of Pharmacy to designate a new substance as a controlled substance if federal law also designates that substance the same way. If the board designates a substance as controlled, the designation is only temporary and will be repealed, under current law, if the General Assembly doesn t act within 60 days of session beginning. HF 567 would allow the General Assembly two years to concur with the Board of Pharmacy designation. This ensures there is enough time for the legislature to understand the substance and determine if the designation should become permanent. Synthetic drugs have taken the lives of several Iowans and destroyed the lives of many others. These drugs have no practical purpose and only poison those who use them. House File 567 takes necessary steps to help stop the spread of deadly synthetic drugs in our state. More Iowa Counties become Home Base Iowa Communities This month five Iowa counties joined in becoming Home Base Iowa Communities. Home Base Iowa Communities focus on bringing military veterans to Iowa by assisting them in finding good jobs. The new counties to join in are Webster, Hancock, Humboldt, Carroll, and Clay. The requirements in order to become a Home Base Iowa Community are: Ten percent of the businesses in the designated area become Home Base Iowa Businesses. The community develops its own welcome/incentive package for veterans. The community prominently displays the Home Base Iowa Community designation. The community obtains a resolution of support from the appropriate local governing body. In addition to the five new counties signing on for the Home Base Iowa designation three Iowa educational institutions have also joined: Mercy College of Health Sciences, Iowa Central Community College, and Eastern Iowa Community College. Iowa educational institutions can receive designations similar to those for cities and counties for offering services such as on-campus veteran resources and centers for veterans. With all of the new designations this month there are now 13 Home Base Iowa Communities and 11 Home Base Iowa Educational Institutions. Other Home Base communities include the city of Marion and Union, Mitchell, Dubuque, Greene, Howard, Clarke and Floyd counties. Other participating academic institutions include the University of Iowa, Iowa State University, the University of Northern Iowa, Hawkeye Community College, University of Dubuque, Upper Iowa University, Des Moines Area Community College and Mount Mercy University. House Ways and Means Passes $520 Million Income Tax Cut for Iowa Taxpayers This week the House Ways and Means Committee passed House Study Bill 215 out of committee with a vote of The bill provides for an alternative income tax system with a 5 percent flat rate on all taxable income. It also provides for an increased standard deduction as compared to the current system as well as a complete exemption of all pension income from income tax. The result is a $521.4 million tax savings for Iowans. The bill establishes a new calculation of base income. The calculation will start from the same place as the current system Federal Adjusted Gross Income. From that number, the taxpayer makes the following adjustments: Subtract the standard deduction ($6,235/$12,470). This is more than triple the current system s standard deduction ($1,920/$4,740). Subtract interest and dividends from federal securities (federal law). Subtract the amount of social security benefits taxable under section 86 of the Internal Revenue Code. Subtract the total amount of a governmental or other pension or retirement income including defined benefit or defined contribution plans, annuities, IRAs, plans maintained or contributed to by an employer, and deferred compensation plans or any earnings attributable to the deferred compensation plans. The current system does not provide for this full exemption of pension income with the exception of military pensions. The current system provides for an exclusion of the first $6,000/$12,000 of pension income. 6

7 After these adjustments are made a tax of 5 percent is imposed on the balance (base income). The bill also provides that if a taxpayer makes the election for the alternative flat tax system the taxpayer will not be able to claim any refundable or nonrefundable credits allowed in the current system with the exception of credits for withheld tax and estimated tax paid. House Study Bill 215 states that the elderly taxpayer filing thresholds of $24,000 and $32,000 apply to the alternative flat tax system. The bill is retroactive to January 1, 2015 for tax year 2015 and beyond. House Republicans continue to support a flatter, fairer, and simpler income tax system for Iowans. This legislation provides the opportunity for Iowans to choose the income tax system that gives them the greatest benefit. There are no losers only winners. House Study Bill 215 now moves to the House floor for further consideration. Closing Thoughts With bills moving to the floor for debate, I encourage you to watch it all happen live at The tentative debate schedule can be found on the House Calendar at Have a great weekend! Contact Information At the Capitol: Home: Telephone: (515) Telephone: (515) chip.baltimore@legis.state.ia.us chip@chipbaltimore.com 7