Thursday, February 26, 2009

Teacher's 403(b) Insurance on Path to Repair

Previously I reported on the 403b issue regarding changes made last year teacher’s insurance that had the effect of forcing them to leave their personal financial advisors to go with advisors mandated by the state.

On Wednesday Senate Study Bill 1257 was filled with the intent of correcting this error. After review with our NAIFA (National Association of Insurance and Financial Advisors) members, we are not satisfied with the changes this bill proposed. CSG plans to file a strike-all amendment preserving only the title of the bill and replace it with language that fixes some of the errors in last year's changes.

Last year’s changes in the 403b law requires the Department of Administrative Services (DAS) to handle all the administrative aspects of 403b insurance, including the selection of a small group of insurance carriers who are allowed sell the 403b insurance to teachers. The main problem arose when teachers were forced to leave their trusted financial advisors, who were no longer eligible to sell 403b insurance, to seek advice from strangers mandated by the state. The other problem arises when DAS decides to change their select group of carriers and teachers are bounced from one agent to the next. No one else is forced to buy their insurance from someone they don’t know or trust – nor would they want to be.

One possible solution is to put a procedure in place to require any licensed insurance agent in good standing to have access to the DAS-selected carriers’ 403b products. This would allow teachers to remain with their preferred financial advisors.

Tuesday, February 24, 2009

Bad for Business Bill: Combined Corporate Reporting

Just as spring comes around once every year, so does a bill at the State House calling for combined reporting of corporate income taxes. However, unlike spring the Combined Reporting Bill is loathed by the state’s corporations and its largest employers.

The bill is Senate File 211, filed by Senator Keith Kreiman (D-Bloomfield). Combined reporting would require corporations such as 3M, who do business in states outside of Iowa, to report their TOTAL income on their Iowa State income taxes – not just their Iowa income as the law is now. 3M’s Iowa State income taxes would increase by 500%.

This bill is bad for corporations in Iowa and will discourage other multi-state corporations from coming into the state and creating jobs for Iowans. Combined reporting is favored by some Democrat legislators because it would generate millions more corporate tax dollars for the state. Taxing corporations exponentially is not in the best interests of Iowans who are worried about the stability of their jobs or are already in search of new ones.

Monday, February 23, 2009

Victory for the Taxpayer in the Prevailing Wage Saga

Monday, the House Majority leader switched his vote to “no” so he could file a motion to reconsider the bill and the speaker closed the vote. The bill failed with a final vote 49 aye – 49 no and 2 absent.

The bill effectively would require that the highest wage paid in the county or district will always be the union wage. Small contractors cannot possibly pay union wages, so it favors big city union contractors.

According to House Minority Leader Kraig Paulson (R-Cedar Rapids), the 4 main objections to the bill are:

1. It will require local governments and schools to spend more money than necessary for infrastructure projects thereby increasing property taxes.
2. It risks putting family-owned contractors out of business.
3. The bill takes immediate effect for Linn and Johnson counties and really hurts those areas trying to rebuild. It’s estimated this could raise the cost of flood rebuilding by as much as 20%.
4. The state will have to add at least 17 new employees and spend over $1.4 million just to administer this law.

Though the motion to reconsider has been filed, it is unlikely the House Democrats will get the 51 votes needed to pass it. This weekend Representative McKinley Bailey (D-Webster City) went on TV committing himself to his “no” vote, and Representative Larry Merek (D-Riverside) promised constituents at town meetings that he would stand strong in his opposition to the bill.

Friday, February 20, 2009

NOT ENOUGH VOTES FOR PREVAILING WAGE

Speaker of the House Pat Murphy (D-Dubuque) will leave the voting machines open all weekend in case anyone changes their minds under pressure. The vote was left at 50 – 46 with 51 votes needed to pass.

House Republicans’ victory over prevailing wage was largely due to the outstanding leadership by House Minority Leader Kraig Paulson (R-Cedar Rapids) and also Jeff Kaufman (R-Muscatine).

The will and resolve of the 5 House Democrats who voted against the bill could not be broken under extreme pressure. One Democrat has not voted yet, but she is believed to be voting “no.”

If this bill ultimately fails it will be a huge victory for Iowa taxpayers.

House to Act on Prevailing Wage

With a nod towards organized labor, the Iowa House of Representatives will take action today on a bill that would require the payment of “prevailing wage” on certain construction projects in the state (HF 333). The bill is expected to be taken up for debate at noon today, but will likely be delayed. Critics cite the potential for property tax increases to pay for the expected 15 to 20 percent cost increases they fear the bill will drive. Union supporters argue that the bill would result in better construction and job safety. If House Democrats prevail, the bill is expected to pass the Senate quickly and be sent to Governor Culver who has pushed aggressively for passage of the measure.

The House also acted on an additional health care mandate proposed in HF 311 that would require health insurance policies in the state to provide coverage for prosthetic devices. A coalition led by the National Federation of Independent Business and the Association of Business and Industry conducted a news conference this week to attempt to highlight the negative impact of health care mandates. In the Senate, the mandate issue is being handled by Senator Tom Rielly (D-Oskaloosa) who has raised concerns about the cost of additional mandates and their affect on the ability of businesses to afford the increases.

A new coalition of businesses and business organizations has been organized to resist passage of a Senate Labor Committee bill commonly referred to as “doctor shopping.” Senate File 155 is on the Senate Calendar, and would completely reverse our current system of selecting medical care for workers compensation cases by allowing the employee to use any doctor. Labor groups support the change while businesses are predicting an immediate 15 to 20 percent workers compensation rate increase if the bill is signed into law.

Wednesday, February 18, 2009

TMC Tractor at State House


CSG brought one of its TMC truck tractors up to the State Capitol briefly Wednesday afternoon. This fine specimen was on display for legislators to see firsthand the thousands of dollars worth of safety equipment installed on the inside - living up to TMC's "Commitment to Excellence."

The use of this safety equipment may be considered “distracting” under the terms of a new bill – which could result in more penalties for drivers who are found to have been distracted at the time of an accident. Senate Study Bill 1217 expands the offense of “careless driving” to include “driving while distracted.” Careless driving is a simple misdemeanor punishable by a fine of $25

Certain activities which are incidental to driving are not distracting activities under the bill, including conversation with passengers, using a global positioning system device, using an installed audio system, using an amateur radio, or calling 911.

Specified distracting activities include using a cellular telephone, text messaging, using a computer or video game device, viewing a television or digital video disc player, personal grooming, eating, drinking, reading, writing, interacting with pets, reaching for or maneuvering unsecured cargo, or interacting with passengers in the back seat of the vehicle

Freshman Representative Chris Hagenow (R-Des Moines) took the opportunity to investigate the inside of the TMC tractor. He was very impressed with all the safety equipment installed including a device that alerts the driver when he is within 3 seconds of the vehicle ahead of him. He reasoned that so much is invested in these trucks that it is in the best interest of drivers and TMC to keep the trucks on the road and accident free.

CSG plans to bring the tractor back up for legislators on a day when the weather is a bit more favorable.

[photo above of your fearless blogger hitching a ride]

Tuesday, February 17, 2009

Republican Rebirth Seen at the Breakfast Tables

The Des Moines Conservative Breakfast Club met Tuesday morning at the Republican Party of Iowa Headquarters. The breakfast tables were packed with upwards of around 70 conservatives. This number has grown steadily over the past several months since Republican’s grave defeat on Election. It is representative of the Rebirth of the Republican Party and new leadership in State Chairman Matt Strawn and Executive Director Jeff Boeyink.

Senator Shawn Hamerlinck (Davenport) and Representative Renee Schulte (Cedar Rapids) – two of the fine class of freshman legislators – both spoke about the hard work they did to get elected and the work that needs to be done going forward to rebuild our party and regain the majorities.

Monday, February 16, 2009

Monday Meetings

The House Rebuild Iowa & Disaster Recovery Committee met Monday afternoon.

Timelines were presented to the committee by Mike Tramotina of the Iowa Department of Economic Development showing the progress Texas made rebuilding after Hurricane Rita. In Texas, only 13% of their money had been spent 706 days after the storm, because, according to Tramotina, that’s how long it takes to spend CDBG (Community Development Block Grant) money. The presentation was an effort to show legislators by analogy how long it takes to obtain and use federal disaster funds.

CDBG monies must be used for low income people in low income areas. 50% must be spent on people below the median area income. Awards of money must go to a local government and then to some other entity adding to the delay in its distribution.

A Senate Transportation Subcommittee comprised of Senators Larry Noble (R-Ankeny), Tom Reilly (D-Oskaloosa), and Steve Warnstadt (D-Sioux City), and met this afternoon to discuss SSB1182 which increases the excise tax on motor and diesel fuel. The proposed bill would increase the motor fuel and diesel fuel excise tax by 8 cents by January 1, 2010.

It is Capitol Strategies position that this tax increase is too fast too soon. Our motor carrier clients recognize the need to repair roads statewide and would be in favor a 4 or 5 cent increase over time.

We are also interested in a tax preference for biodiesel. This would give carriers the option of purchasing regular diesel and the increased rate or biodiesel at the preferred rate.

Tonight at 7:30 the House Chambers will be hosting a public hearing on the issue of prevailing wage. Speakers are limited to 3 minutes and as of 3:00 about 40 people were signed up.

Thursday, February 12, 2009

Ban on Cell Phones in Vehicles Proposed

House File 9 if passed would ban all people from using a cell phone while driving a vehicle. The bill allows for the obvious exceptions for a person to call 911 or if the vehicle is pulled off to the side of the road.

Most people realize that it is probably not the best practice to talk or send text-messages while driving, but is it that bad that it requires a change in Iowa Law? Capitol Strategies thinks not.

Opening the door to restrict the use of cell phones can quickly become a slippery slope leading to other restrictions and prohibitions in our personal lives. When changes are proposed to the state code intending to alter peoples’ habits, there must be some compelling statistics in its favor. No statistics have been presented indicating that driving with one hand and talking on the phone is more dangerous than talking to the person next to you or in the back seat of the car, for example.

Truck drivers are often on the phone getting instructions on deliveries and best routes making it an essential aspect of their job.

We have spoken to the bill’s sponsor, Representative Abdul-Samad (D-Des Moines) who is open to amending the bill to make an exception for motor trucks. CSG plans to bring a truck tractor up to the Capitol to give Representative Abdul-Samad and other legislators a chance to see firsthand how our drivers operate and how safe they are.

Tuesday, February 10, 2009

Featured Freshman: Representative Gene Ficken


Name: Gene Ficken

District: 23

Committee assignments: Education (Vice Chair), Veterans Affairs, Natural Resources, and Joint Education Appropriations

Hometown and current town
Hometown – Spirit Lake; Current town - Independence

Your family
Wife Michelle, Children Travis, Garret, and Paige

Education and Cyclone/Hawkeye affiliation
BA in biology from UNI, MA in biology from UNI Loyal to all

Occupation when not in session: retired

Why you ran for office
To help improve education in the state of Iowa.

What you think are the three most important things the General Assembly needs to accomplish this session, and describe each briefly
a. Disaster relief
b. Economic relief for middle class families
c. Education

What has been your impression of the legislature thus far?
Challenging and high learning curve with an unbelievable and rewarding experience

Click here to go to Representative Gene Ficken's Legislative Page

Monday Meetings

The Senate Labor & Business Committee met Monday afternoon to discuss Senate Study Bill 1119 – providing for employee choice of doctors for purposes of injuries that are workers compensation injuries. Senator Tom Courtney (D-Burlington) chairs the committee. The room behind the Senate Chambers was packed with the business lobby, the labor lobby, and several who were there to give statements before the committee.

A representative from the Iowa Occupational Nurses Association, in a prepared statement, said that employers often know what doctors specialize in treating certain workplace related injuries. She also pointed out that some doctors chosen by employees will do anything to please the injured employee in effort to retain their business.

An employee advocate discussed horror stories from the Case plant in Burlington. Various employees had been given the run-around and were allegedly made worse when they were not initially able to choose their own doctor.

What was missing from the discussion was the fact that Iowa has some of the richest workers compensation benefits in the nation. We also allow employees who are not satisfied with their care to petition the Industrial Commissioner to allow them to use their own doctors. The current system works for 99.9% of Iowa workers and we should do nothing to alter that balance.

House Rebuild Iowa Committee

The House Rebuild Iowa Committee also met to clarify questions raised last week about Rebuild Iowa Office (RIO) Expenditures. Last week the RIO chief of staff Emily Hajek told the committee that that $19,000 was spent to replace the carpet in their office because "the lieutenant governor asked that it be replaced." Monday, General Ron Dardis of the Iowa National Guard, who is now in charge of RIO, did his best to answer committee members’ questions.

Representative Tom Sands (R-Columbus Junction) told General Dardis and the committee that there is “frustration out there, real frustration” from his constituents – some of whom are still living in FEMA trailers. He also pointed out that he has 30 year-old carpet in his office that should probably be replaced, but it is not a priority to him and suggested that it should not have been a priority to RIO.

While both those meetings were going on, Representative Steve King was speaking on the first floor at the Prayer for Life Rally. Hecklers in the audience made themselves known. Sheriffs escorted one man was escorted to the door and subdued the others.

Friday, February 6, 2009

Rebuild Iowa Office Expenses Questioned

The House Rebuild Iowa Committee met on Wednesday this week. Legislators vigorously questioned Rebuild Iowa Office (RIO) executives about seemingly out-of-place expenditures including $19,000 on re-carpeting the office space and $425,000 dollars on lobbying and media personnel.

RIO was established by Governor Culver through an Executive Order to coordinate state-wide efforts to aid in recovery after the onslaught of natural disasters last summer.

On Monday, Governor Culver signed the Rebuild Iowa Bill into law after receiving unanimous votes in the House and Senate. House File 64 allocates $56 million from the state’s rainy day funds to disaster recovery efforts:

• $24 million will go to the Jumpstart Housing Assistance Program
• $22 million for grants to cities and counties for expenses including repairing and rebuilding public infrastructure, and public purchase of land and structures
• $10 million for individual disaster relief grants to be dispersed through the Department of Human Services

Governor Culver has also signed SF 44 which aids cities in federally declared disaster counties to impose a vote for a local option sales tax to raise funds for disaster recovery.

On a different note, on Friday the 3M plan in Ames announced it would be reducing work hours for most of its 350 employees as a result of the nation’s economic woes.

Wednesday, February 4, 2009

Featured Freshman Senator Tim Kapucian


Name: Tim Kapucian

District: Senate 20

Committee assignments
Agriculture, Transportation, Economic Growth, Appropriations, Local Government, Economic Development Approps. Subcommittee

Hometown and current town
Keystone, Iowa (30 miles west of Cedar Rapids)

Your family
Wife since November 29th, Brenda who lives in West Des Moines and works at Farmers Mutual Hail, two stepdaughters and one stepson- in-law and two grandchildren. My mother Betty lives in Keystone.

Education and Cyclone/Hawkeye affiliation
1979 Graduate of Iowa State University, BS in Animal Science. Definite CYCLONE

Occupation when not in session
Farmer – corn, soybeans, some oats and hay. On occasion I feed some cattle. Former cow-calf and farrow to finish operator

Why you ran for office
To make sure rural Iowa keeps its’ representation and support agriculture and small town Iowa.

What you think are the three most important things the General Assembly needs to accomplish this session, and describe each briefly

Balance the Budget – We must curtail out of control spending and keep Iowa prosperous not only for our future but for generations to come. Infrastructure – To continue to not only feed the world but now supply energy as well. We must have a good, safe highway system so we can export our products efficiently. Keep taxes down – Low taxes provide incentive for business growth.

What has been your impression of the legislature thus far?
So far it has been mostly getting organized and then with the inauguration and Mary Lundy’s funeral we haven’t had a lot of time for all our work. However, I feel we will get on track shortly and accomplish the task at hand.

The food you most look forward to at the Iowa State Fair
Iowa Pork Chops and Beef Quarters Steaks

Anything else you would like readers to know about you?
I believe strongly in Iowa, our work ethic is second to none, our citizens are the friendliest in the nation and we have the most productive ground in the world. I am proud of these things and I will do everything I can to support and protect our land, our people, and our future

Click here to go to Senator Kapucian's legislative page

Fair Share or Unsolicited Union Representation?

A bill that will require non-union members to pay their “fair share” for union representation – albeit unsolicited – is expected to hit the bill stack soon. Labor leaders are rumored to be making their way into the State House lobby and meeting rooms behind the House and Senate Chambers.

Union leaders are fed up with non-union members receiving the same benefits they “win” for union employees without paying their dues. So to get around requiring them to join the union, which is prohibited by Iowa’s Right-to-Work law, union bosses will just require them to pay a fee for representation.

Union leaders don’t have to represent those who aren’t paying their “fair share” – they choose to.

Only about 10-12 percent of Iowa's workers choose belong to a union.

Iowa’s neighbors that have fair-share laws include Missouri, Minnesota, Wisconsin and Illinois. Does Iowa really want to replicate anything that Illinois does? I think not. South Dakota and Nebraska do not have fair-share laws and South Dakota is ranked as one of the top states in the nation in which to do business in part for that reason.

When Iowans are struggling to pay bills as it is the last thing they want is to be told they MUST pay for union representation whether they want it or not.

Monday, February 2, 2009

Prosthetics Bill Mandates Increased Insurance Costs

A Senate Commerce subcommittee met today to discuss the Senate Study Bill 1122 which would require employer provided health insurance to cover medically necessary prosthetic devices. The subcommittee members included Tom Rielly (D-Oskaloosa), Rich Olive (D-Story City), and David Hartsuch (R-Bettendorf).

Most employers’ insurance plans already provide some coverage for prosthetic devices, but this bill effectively eliminates the restrictions on what kinds of devices must be paid for. It is not a mandate for insurance companies to sell prosthetics but a mandate for employers to buy. The business community is under more pressure than ever before just struggling to stay open and keep the lights on let alone pay extra insurance on their employees. The debate is a public policy one whereby taking care of a few peoples’ interests must be weighed against employer ability to afford the insurance.

CSG proposes that a commission be established to evaluate insurance mandates and establish a limit on how many are allowed. This would help maintain affordability while the most medically necessary mandates will be in place. The commission would be responsible for deciding which mandates are the most important and cost effective and assign a value to each. If a new mandate is proposed, the commission would determine if its value is greater than one already in place. If so, the commission would replace the lowest valued mandate with the new one – instead of just adding it to the list.

Each new mandate – whether it be for prosthetics, diabetes, or in vitro fertilization – will have some compelling personal story behind it. But the emotional appeal must be balanced with the reality that the employer will have to bear the cost of it. The more mandates that must be paid for, the more the insurance will cost, and the less likely an employer will be to maintain that insurance coverage for his employees. Employers in Iowa currently have a choice of whether or not to provide insurance for their employees. Adding mandates to what is covered increases the cost of that insurance and the ultimate effect is that fewer people in Iowa will be insured because employers will not be able to afford the insurance.