Friday, April 17, 2020

ITR Asks Congress to Fix the Federal CARES Act

ITR and a coalition of state policy groups have asked Congress to provide more financial flexibility for states and local governments to utilize the dollars provided through federal relief packages.

A letter submitted to U.S. House and Senate leadership, as well as individual members of Congress, calls for modifications to the $150 billion “Coronavirus Relief Fund” for states and local governments in the federal CARES Act.

Read the letter

While each state is allocated at least $1.25 billion from the fund, the requirements of the program may not help states with what may be their largest financial challenge resulting from COVID-19: a sudden reduction in most tax revenue. 

The CARES Act specifies that funds may be used for emergency expenses, such as Iowa’s rainy day fund allocation for its COVID-19 response, or newly adopted programs. The legislation also prohibits state or local governments from using aid to pay expenses budgeted before the emergency.

Could lead to property tax increases

Unlike the federal government, most state and local governments must balance their budgets. 

Without additional flexibility at the local level, municipalities that depend heavily on sales tax revenue may face pressure to impose significant property tax increases due to a reduction in consumer spending.  The City of Des Moines, for instance, will likely forgo a planned rate decrease for property taxpayers and instead will turn to Des Moines residents and businesses to make up for a shortfall of local sales tax dollars.

Improvements need to be made 

Congress needs to allow dollars from the CARES Act (and other future packages) to:
  • Offset lost tax and fee revenue 
  • Provide one-time tax relief for individuals and businesses
ITR President Chris Ingstad said, "We don’t believe a one-size-fits-all approach from the federal government is the best solution. Rather than letting Washington dictate how to use these funds in Iowa, including ways that might even compel more spending, we want to see our state and local governments given maximum flexibility. It doesn't make sense that the only way to qualify for federal aid is to find new ways to spend money.”

Ingstad went on to say, “If no changes are made to federal relief packages, taxes could increase or funding for essential services may be cut. As we wrote, we are asking Congress to allow states the ability to use their relief assistance in the most prudent and least disruptive way possible.”
Click to Email Your Senators and Representative

"Houston, We Have a Problem"

In a Taxpayers Association of Central Iowa (TACI) email this week, they reminded us of the 50th anniversary of Apollo 13, how property taxes are a problem, and invited ITR members to participate in a virtual town hall. They wrote:
It was 50 years ago this week when this popular (but restated) quotation from Jack Swigert was radioed to Mission Control from Apollo 13. It is apropos today.

Property tax bills, with increases as much as 8%, will be forthcoming at a time when respected economists are forecasting unemployment rates and business failures will approach, or exceed, those of the Great Depression.

One frustrated member wrote: “I can’t believe it! Only the public sector can demand we pay more when we have less.”

As the only non-partisan, Central Iowa focused association, we been encouraged to be the convener for the discussion and will be doing so, starting with a Zoom Town Hall.

The Town Hall will be held Wednesday, April 22, from 4:30-5:30 PM. Have a refreshment, Zoom in, and join the dialog.

If you are interested in the content and participating, email
ITR staff will be participating and will share taxpayer input from around the state. Hope to see you online!

Iowans Are Hurting

Governor Reynolds has to make tough decisions about how to balance legitimate economic concerns with equally legitimate health and safety concerns, as do all her gubernatorial colleagues across the country. Multiple news outlets reported the Governor and her department heads are beginning talks this week that focus on how and when to re-open the economy.

Over the coming days and weeks, we hope they find ways to get people back to work as soon as it appears safe to do so, which is not an easy task. As the President of the Foundation for Economic Education, Zilvinas Silenas, wrote last week, “The real world has real trade-offs with real consequences. Painless solutions to serious problems are incredibly rare.”

Rather than waiting for a blanket “all clear” declaration for the entire state, re-opening regions, counties, or even zip codes may be a wise strategy. Additionally, ITR encourages our leaders to evaluate jobs and workers not just as essential or non-essential, but also high-risk or low-risk (in terms of spreading the virus). A lawn care service, for instance, may not be deemed essential, but the chances it could spread the virus are likely low.

Regardless of when Iowans can begin getting back to work, the economic impact is painful. ITR members from across the state have shared how the economic slowdown is affecting them:
"Our sales are 25% of what they would normally be, and six people, four full time and two part-time, have temporarily lost their jobs. While unemployment is there to catch them, my business will be on the hook for the next three years, paying for this through raised rates."
"We opened our restaurant on February 3rd. Things were going great, and the business grew quickly. Now, just a few weeks later, we were forced to shut down due to COVID-19. Our future is uncertain."
"This is not the fault of any Iowan or the state. The state of Iowa needs to look hard at ways to help Iowans get back up and running. All in all, my family and I are happy that we are all safe and well and looking forward to being "free" again."
"We are both on Social Security and Medicare: Parts A & B (supplement insurance). We just need to adjust our lifestyle by being frugal. We need to stop raising our property taxes and encourage less government."
"I applied for unemployment. It took some time to find a form available to self-employed folks who have no employees, but I did. A couple of days later, I got a note in the mail saying I wasn't eligible because I hadn't made any money in the last quarter. Being required to close our business for a month cuts off our income while our mortgage and utilities continue."
If you have the ability, please help those in need by giving directly, through your church, or another organization. Visit to find opportunities to help those in need. 
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Telehealth House Calls

There was a time when it was common for doctors to make house calls. Now, the coronavirus pandemic and technology are once again allowing patients to receive medical care without leaving their homes. 

As part of Public Health Disaster Emergency, Governor Reynolds mandated health insurance carriers reimburse health care professionals for telehealth services on the same basis and at the same rate as the health insurance carrier would apply to services provided in person.

The Des Moines Register reports thousands of Iowans are now using telehealth services. At one health system in Des Moines, virtual urgent care visits have increased by 176% in just one month.

Using telehealth during a pandemic saves valuable PPE (personal protective equipment) and keeps doctors, nurses, and patients from being exposed to or spreading disease. 

If it's good during a crisis, why not all the time?

When this crisis is over, those benefits will still hold true. Additionally, time is money, and Iowans would save many hours by not having to travel or sit in waiting rooms. 

Unless it is extended, the Governor's mandate for insurance companies to provide telehealth coverage will expire on April 30. When lawmakers reconvene, they need to quickly act to provide equal reimbursement for virtual healthcare.

You've Got Mail

(And part of it is an absentee ballot request form)
For the first time, every registered voter in Iowa will be sent an absentee ballot request form before an election. The forms for the June 2nd primary election should start arriving in mailboxes April 23nd and will include prepaid postage for return mailing to county auditors.

Iowa is not moving to all-vote-by-mail for the primary election but is pushing absentee-by-mail voting. Each county still will have at least one polling place open on election day, but don't be surprised if your regular polling place isn't open. Auditors are temporarily combining precincts for this election because they don't have enough poll workers. 

For additional voter information, visit the Iowa Secretary of State website.
Previous Watchdog Email Updates

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Exposed and vulnerable

Tom Brady keeping his distance – from taxes

Rollback and give back
It’s easy for politicians to yield to noisy special interest groups when the taxpayer keeps quietly paying the bills.
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