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.

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.

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.

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.

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]

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.