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Wednesday, May 4, 2016

Legislative Report

Monday, April 4, 2011

Legislative session to last longer

This legislative session is scheduled to end around the first of May. Last year at this time, we were adjourned. How did that happen? Well, last year the Governor and the Majority Party in each chamber were in the "get out of Dodge fast" mode. It was an election year and the budget situation was dire. Polling data showed that Republicans were poised to win the Governor's race and take the majority in the House. Democrats were being blamed for running the states' finances into the ground with four years of unsustainable spending. So, the idea was to leave town before anything else bad happened. The majority party took a bunch of one-time money, such as federal stimulus dollars and money from several different funds, plugged a few holes, and went home. They really didn't solve the main problem of run-a-way over spending.

This year is different. The new Governor has insisted on passing a two-year budget in order to do long range planning, and the new majority in the House has vowed not to spend more than we take in. This takes time and discipline. We have to get things back under control now. The revenue picture in Iowa looks better compared to a year ago, and there is always the temptation to spend any "surplus" money. We are not going to do that this year. The majority party leaders in the Senate have indicated they are willing to spend every penny they can get their hands on. So, there will be intense negotiations, and these take time. We will, in the end, pass a balanced budget without using one-time funding. It will take longer than last year, but I want to get it right. The people of Iowa deserve nothing less.

Budget bills are beginning to move on the House floor, and the first two passed late in the week. The Federal Block Grant bill is flow-through money from Uncle Sam and over half of it goes towards human services. Other users of this money include the Board of Regents, the Department of Transportation and the Department of Public Defense. This $6.3 billion is more than the state's general fund budget. It is a lot of money, and every state receives funding. Imagine how many dollars flow through states like New York and California. It is no wonder there is so much fraud and waste.

The other appropriations bill to clear the House is the Department of Transportation's operations measure. The legislation spends around $350 million for DOT operations and maintenance. This is not concrete and re-rod. This money goes for such things as equipment, salaries, salt, garages and fuel. I was the floor manager for this bill and it passed fairly easily, but not without controversy. Nobody asked me about the numbers, but Democrats were upset that we did a 2-year budget. I'm not really sure why. Oh, they gave their reasons, but they did not really add up. I'm sure we will hear the same complaints on every budget bill.

As Iowans discuss the possibility of additional power generation being constructed in the state, a new national report shows the impact on state economies when power projects are not built.

The United States Chamber of Commerce last week released "Progress Denied: A Study on the Potential Economic Impact of Permitting Challenges Facing Proposed Energy Projects". Their study found that over the past decade, 351 different energy-related projects had been stopped by issues related to receiving permitting approval by state and federal regulators.

For Iowa, the Chamber identified four different projects proposed for construction in Iowa that did not occur due to regulatory road blocks. The best known of these would be the proposed Alliant power generation facility that was slated to be constructed outside of Marshalltown. This project, which was proposed to replace an existing coal-fired fire plant in the area, was shelved in 2009 when state regulators continued to impose new requirements on the company in order to proceed.

One of the other uncompleted projects was LS Power's proposal for a 750 megawatt generation facility outside of Waterloo. This project was proposed in 2007, but immediately ran into regulatory barriers imposed at the state and local level. In 2009, LS Power announced its intention to abandon the project. The other power projects identified in the report were the Big River Resources Ethanol plant proposed for Grinnell and the Green River Express transmission lines that were to move electrical power from South Dakota to Chicago.

Constructing these four projects would have brought 19,300 jobs to Iowa and an investment of $10.2 billion dollars. The annual economic output of just these four projects would have been $1.1 billion, with $200 million of that going out in salaries and benefits to the 5,400 permanent jobs that would have been created if they had been able to be built.

On a national level, the study found that the construction of the 351 proposed projects would have generated $1.1 trillion in economic activity and 1.9 million construction jobs. Once in operation, 791,000 Americans would have been needed to keep the facilities operating.

The report clearly shows that meeting the power needs of American businesses and consumers has tremendous impact on the economy. As federal policy moves to limit the options for power generation, meeting these needs has the potential to be a major driver in the economic recovery of Iowa and the nation.