Monday, June 8, 2020

Back Under the Dome

Lawmakers returned to the Capitol Wednesday and immediately started debating legislation that had been on hold for 11 weeks. Both chambers worked late into the evening on Friday before adjourning for the week.

Bills addressing medical marijuana and voting rights for felons garnered the headlines, but occupational licensing reform and COVID liability protection for businesses advanced as well.

Here are status updates and background information for both issues:

COVID Liability Protection - SF 2338

COVID-19 liability protection was added as an amendment to SF 2383, a medical malpractice limitation bill ITR has supported all session. It was passed on the House floor on Friday night and will now be sent to the Senate for them to consider this amended version.

After being shut down for weeks due to COVID-19, many Iowa businesses have started to reopen. Some restrictions are still in place, and businesses have been encouraged to be cautious and responsible in an effort to protect both their consumers and their employees.

Unfortunately, COVID-19 is not easily detectable. Some individuals who are infected show no symptoms. Particulate matter containing the virus can linger in the air or on surfaces for minutes, hours, or even days.

Sanitizing and distancing help to reduce the possible spread of the virus; even the most diligent efforts used by businesses will not eliminate all risks. Lawsuits against companies trying to reopen will curtail the reopening progress. With so many unknowns, companies may be tempted to retreat or hold back on moving forward.

For this reason, it is important that the legislature act to protect Iowa businesses from coronavirus related lawsuits. If an employer is utilizing reasonable safety measures per CDC guidance, they should not have to worry about being sued if an employee or customer contracts the coronavirus. Without this protection, lawsuits could force many business owners out of business, particularly after weathering the financial difficulty of a government-mandated business closure that lasted for weeks.

While it is important for Iowa businesses to act responsibly and with caution, they should not be liable for spreading the coronavirus if adequate protective measures were in place.


Remove Excessive Licensing Regulations- HF 2627 & SF 2393

Governor Reynolds’s comprehensive occupational licensing reform bill was passed with bi-partisan support by the House Ways and Means Committee this week and is now eligible for debate on the House floor.  The Senate continued to consider their own version of occupational licensing reforms, but may be working toward a merged solution with the House. 

Occupational licenses can serve to protect the health and safety of the public, but overly burdensome licensing becomes a red tape tax on the ability of individuals to work.

At the outset of the COVID-19 outbreak, Governor Reynolds eased many licensing restrictions within the medical community to stop government bureaucracy from preventing those with the medical skillsets needed to combat the coronavirus from practicing medicine. This included allowing individuals licensed in other states to practice medicine in Iowa, provided that they were in good standing in their licensing jurisdiction.

While actions like this can sometimes cause an uproar by the noisy special interests that profit from increasing occupational licensing requirements, when faced with a public health emergency, these calls of impending disaster due to decreased regulation did not come, indicating that much of these arguments are drastically overblown.

The need for licensing reform goes beyond the medical profession. Iowa is the second-most licensed state in the country, with one in four workers requiring a license from the government to work. It is necessary that licensing requirements are reviewed regularly to make sure that current requirements make sense. It is also important that Iowa recognizes the skillsets of those who desire to move to Iowa and grants them a license for work that they know how to do and have been doing in another jurisdiction.

Further, greater consideration needs to be paid to fees, finding ways to reduce or eliminate fees for low-income individuals so that the fees don’t become a barrier to work. Finally, there should be a streamlined approach in dealing with individuals with a criminal history, removing barriers for these individuals to work in cases where it makes sense.

Three weeks ago, Missouri's legislature made it easier for individuals to enter the workforce. Iowa needs to do the same and slash this red tape tax. 

Visit our legislative update webpage to see the progress of other bills we are monitoring. 

Click to Email the Governor and Your Legislators

Reynolds is Delivering Transparency

In response to the coronavirus, the federal government has sent billions of dollars to Iowa. Through various programs, with various sets of rules, Washington, D.C. has asked our state and local governments to distribute those funds across Iowa.

We all know money from Washington isn’t free. In fact, federal tax dollars came from our pocketbooks to begin with! Without transparency, we’d never know if our tax dollars were being spent wisely, or even if they were subject to fraud. 

Fortunately in Iowa, Governor Reynolds, along with the Department of Management and the Legislative Services Agency, has done a great job of providing that transparency.

Iowa's Pandemic Recovery Report contains interactive graphs and maps that show where dollars have come from, what department they’ve gone to, and even what projects in specific communities they’ve supported. As additional information is provided, this will be even more helpful for Iowans to quickly and easily get a sense of how federal COVID support dollars are being spent throughout the state.

If you’re someone who really wants to dig into data, this LSA Financial Update provides even more detail. For instance, the amount of funding allocated to each of Iowa’s colleges and universities through the Higher Education Emergency Relief Fund within the CARES Act is detailed in the LSA report. Similarly, COIVD relief dollars that have gone to K-12 education in Iowa are outlined there, too.

Iowa taxpayers, as well as the media and the legislature, have a right to know where all of these federal relief dollars are going. So far, Governor Reynolds is delivering the transparency Iowans deserve.

Somebody's Going to Pay the Bill

The budget is usually the last issue addressed before the legislative session ends, so legislators didn't address the state's budget issues this week. However, others were still talking about state revenue. 

Last Friday, the Revenue Estimating Conference (REC) reduced its 2021 estimate from $8.24 billion to $7.88 billion. Legislators will use this new REC estimate to create next year’s budget. That amount is slightly more than last year's $7.6 billion budget.

During a TEF Iowa webinar, Dr. Ernie Goss, an economist from Creighton University, said Iowa's state and local governments are "going to have to pull back" spending. He warns that legislators will have to replace funds used from the state's reserves, and that will require spending cuts. 

Goss gave insight into what he thinks will happen nationally by saying, "Somebody's going to pay the bill. In other words, the bill is a federal deficit that's increased now to three to four and probably up to five trillion dollars this year. Now ultimately, it's going to be paid for by higher inflation, higher interest rates, or higher taxes. Or a combination of all three of those. So, that's the warning, I think. I don't think we will see any one of those three until the middle of next year, 2021."

He explained how this is a very unusual recession. It was led by the consumer and happened in leisure and hospitality. Retail sales in the rural areas are "down to the nub" except for the big-box stores. Manufacturers have not been as hard-hit except a few industries that are very important Iowa -- ethanol and food processing.  We are also seeing lower commodity prices in agriculture. The largest decline in consumer spending in terms of dollar value occurred in the medical professions. That's a big issue in rural hospitals and clinics. 

Watch the recorded webinar for more insight into coronavirus's impact on Iowa's economy.  

Links of Interest

ITR OP-ED: Reduced revenue is no excuse for raising taxes on Iowans
- Cedar Rapids Gazette
"Difficult decisions will need to be made to reduce state government accordingly so that taxpayers don’t have to shoulder more of the burden in a way that, frankly, they can’t afford."
Iowa governor signs voting rights bill requiring restitution
- Sioux City Journal

How supply, cost of meat is affecting Iowa’s restaurants
- Business Record

Some Iowa Hospitals could close even with federal coronavirus help

- Radio Iowa

In Case You Missed It

Roadmap to recovery

Freeze government salaries, Don't increase taxes,
Remove excessive licensing regulations, 
Increase government transparency,
COVID liability protection, and Eliminate the welfare cliff effect
Iowa's digital divide - rural internet

Policies to connect more Iowans to broadband
Use taxpayer dollars wisely
Nancy Pelosi pushing more spending

Show Me Reform
Legislature to Reconvene June 3rd
Keeping an Eye on Georgia
Iowa's economy has shrunk $1.6 billion

Disappearing Income, Jobs, and Gov't Tax Revenue
We Don't CARE for Needless Spending
Are federal COVID-19 economic impact payments taxable in Iowa?
Should Iowa Freeze Government Salaries?

No easy answers when budget reductions loom
How bad is the economic impact?
Reopening Iowa: Georgia's approach is worth monitoring

Complete 2020 ITR Watchdog Newsletter Archive
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It’s easy for politicians to yield to noisy special interest groups when the taxpayer keeps quietly paying the bills.
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