Word of the Day
Callifudge – trick, a hoax, a swindle
Francis Taylor’s Speech of South Lancashire, 1901

Bonding Plan

• According The Des Moines Register, 71 percent of Iowans oppose the bonding plans proposed by Democrats.
• Democrats aren’t even saying how they will pay for it – only that future legislatures will have to come up with the money.
• Republicans are skeptical of the Democrats plan to borrow between $700 million and $750 million through bonding.
• Paying for any of the projects under discussion will cost the taxpayers more through bonding than through a pay-as-you-go strategy. Senate File 376 currently has $175 million in bonding in it and will cost taxpayers $316 million in principal interest. Senate File 474 has $100 million in bonding in it and will cost the taxpayers $217 million in principal and interest.
• According to the State Auditor, using the RIIF for infrastructure (vertical or horizontal) would provide, in just a 3-year period, more than the $700 million of bonding proposed by the Governor that requires a 20-year payback.
• If the infrastructure fund was used for what it was intended instead of spending it on various non-infrastructure priorities, this borrowing discussion wouldn’t be happening.
• Had Democrats not used well over $200 million in infrastructure dollars for non-infrastructure things, some of the projects listed directly below could have been paid for without borrowing anything.
• Over the last two years, Democrats in the Legislature have used well over $200 million in infrastructure dollars for non-infrastructure spending. That means we could be using a pay-as-we-go approach instead of a borrowing plan for projects like:

Some of the projects Democrats want to borrow money through bonding to pay for include:

• $5 million for the Cedar Rapids Public Library
• $5 million for the Cedar Rapids Public Works Building
• $10 million for the National Czech and Slovak Museum
  • The above three projects are among the $46 million targeted to Cedar Rapids. None of this $46 million is dedicated to flood prevention.
• $25 million for public broadband technology
• Undetermined amount for state parks
• $7 million for community colleges
• $12 million for community attractions and tourism
• $10 million for river enhancement community attractions and tourism
• $100 million for regents institutions

Here are some of the places Democrats want to spend infrastructure dollars in 2009:
Continue reading about the callifudge…

Quote of the Day
“The wise and correct course to follow in taxation and all other economic legislation is not to destroy those who have already secured success but to create conditions under which every one will have a better chance to be successful.”
~ Calvin Coolidge, Inaugural Address 1925

Lyrics of the Day
“He taxed their property,
He didn’t give them any choice,
And back in England
He didn’t give them any voice.
That’s called taxation without representation,
And it’s not fair!

But when the Colonies complained
The king said: “I don’t care!”

He even has the nerve
To tax our cup of tea.
To put it kindly, King,
We really don’t agree.
Gonna show you how we feel.
We’re gonna dump this tea
And turn this harbor into
The biggest cup of tea in history!”

~ Schoolhouse Rock, 1975

Republican Budget Savings Plan

• Speaker Murphy and Majority Leader McCarthy said in January that Democrats would perform a thorough line-by-line examination of the state budget. They have failed to live up to that promise.
• House Republicans have identified over $200 million in budget savings. Some of those savings are: salary reductions for state employees, higher contributions from state employees for their own health care, sale of the state vehicle fleet and a freeze on the purchase of private land by the DNR. Over the last two weeks, Republicans offered measures that:
  • Eliminates all funded, unfilled FTE positions that have been open for six months – savings of $25 million state government-wide.
  • Requires consolidation of state information technology and email systems – savings of at least $20 million, possibly much more in FY 2010.
  • Privatized grass cutting and yard work at the Capitol complex –savings of at least $100,000.
  • Requires DAS to privatize the state vehicle fleet – savings of $27 million in FY 2010, $10 million in FY 2011 and beyond.
  • Reduced office supplies, service contracts, equipment purchases – savings of $2.1 million in FY 2010.
  • Reduction for all printing, binding, communications and a 50% reduction for advertising and publicity – savings of $450,000 in FY 2010.
  • Prohibits purchases for the state vehicle fleet until June 30, 2010 – savings of $11 million in FY 2010.
  • Prohibits the purchase of vehicle add-ons like GPS systems and bug shields.
  • State employees must provide meal receipts instead of claiming maximum.
  • Eliminates charter flights for DOT commissioners.

Elimination of Federal Deductibility

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Word of the Day
In scuggery – In secrecy, hid.
William Marshall’s Provincialisms of East Yourshire, 1788

Republican Budget Savings Plan

• Speaker Murphy and Majority McCarthy said in January that Democrats would perform a thorough line-by-line examination of the state budget. They have failed to live up to that promise.
• House Republicans have identified over $200 million in budget savings. Some of those savings are: salary reductions for state employees, higher contributions from state employees for their own health care, sale of the state vehicle fleet and a freeze on the purchase of private land by the DNR. This week Republicans offered measures that:
  • Eliminates all funded, unfilled FTE positions that have been open for six months – savings of $25 million state government-wide.
  • Requires consolidation of state information technology and email systems – savings of at least $20 million, possibly much more in FY 2010.
  • Privatized grass cutting and yard work at the Capitol complex –savings of at least $100,000.
  • Requires DAS to privatize the state vehicle fleet – savings of $27 million in FY 2010, $10 million in FY 2011 and beyond.
  • Reduced office supplies, service contracts, equipment purchases – savings of $2.1 million in FY 2010.
  • Reduction for all printing, binding, communications and a 50% reduction for advertising and publicity – savings of $450,000 in FY 2010.
  • Prohibits purchases for the state vehicle fleet until June 30, 2010 – savings of $11 million in FY 2010.
  • Prohibits the purchase of vehicle add-ons like GPS systems and bug shields.
  • State employees must provide meal receipts instead of claiming maximum.
  • Eliminates charter flights for DOT commissioners.

Elimination of Federal Deductibility

• Federal deductibility helps Iowans save money. For example, if an individual makes $50,000 and pays $15,000 in federal taxes, their base income for state tax purposes is $35,000.
• For many taxpayers, the amount of tax payments made to the federal government is the only – or largest – deduction available to them. For example, middle income taxpayers who do not own a home or have children cannot utilize income tax deductions and credits available to others; such as mortgage interest, property taxes and the child and dependent tax credits.
• Double taxation (tax on a tax): eliminating federal deductibility will allow the state to tax income never realized by taxpayers (i.e. $15,000 example above).
• Winners and losers: Under the bill 541,108 or 39.8% of Iowa taxpayers will see no change in their tax liability or see their tax liability increase in tax year 2009. The bill increases taxes on some Iowans to pay for a tax cut for other Iowans.
  • 350,246 or 25.7% of all taxpayers will see a tax increase.
  • 190,862 or 14.1% of taxpayers will see no change in their tax liability.
  • 818,921 or 60.2% of taxpayers will receive a tax cut.
  • 25% of the individuals (87,076) whose taxes will increase under the bill make less than $40,000 per year.
  • 60% of the individuals (208,984) whose taxes will increase under the bill make less than $60,000 per year.
  • 12,218 individuals who make more than $200,000 will receive a tax cut under the bill.
• On December 31, 2010, or tax year 2011, the federal tax cuts of 2001 & 2003 will expire increasing federal taxes on Iowans by $154 million. Nothing in HF 807 requires this additional revenue to go towards tax relief, or prevents the legislature from using this revenue for additional spending.
• The majority of Iowa businesses are small businesses and their income is taxed at the individual rate. If their tax liability increases, they will either eliminate jobs or pass the added expense to the consumer to absorb the cost.

Budget Big Picture

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Word of the Day
Japeworthy – Ridiculous, a trick, a jest.
Thomas Tyrwhitt’s Poetical Works of Geoffrey Chaucer, 1874

Elimination of Federal Deductibility

• Federal deductibility helps Iowans save money. For example, if an individual makes $50,000 and pays $15,000 in federal taxes, their base income for state tax purposes is $35,000.
• For many taxpayers, the amount of tax payments made to the federal government is the only – or largest – deduction available to them. For example, middle income taxpayers who do not own a home or have children cannot utilize income tax deductions and credits available to others; such as mortgage interest, property taxes and the child and dependent tax credits.
• Double taxation (tax on a tax): eliminating federal deductibility will allow the state to tax income never realized by taxpayers (i.e. $15,000 example above).
• Winners and losers: Under the bill 692,713 or 50.9% of Iowa taxpayers will see no change in their tax liability or see their tax liability increase in tax year 2009. The bill increases taxes on some Iowans to pay for a tax cut for other Iowans.

• 450,292 or 33.1% of all taxpayers will see a tax increase.
• 242,421 or 17.8 % of taxpayers will see no change in their tax liability.
• 667,314 or 49% of taxpayers will receive a tax cut.
• 40% of the individuals (180,300) whose taxes will increase under the bill make less than $40,000 per year.
• 69% of the individuals (314,885) whose taxes will increase under the bill make less than $70,000 per year.
• 12,470 individuals who make more than $200,000 will receive a tax cut under the bill.

Republican Budget Savings Plan

• Speaker Murphy and Majority McCarthy said in January that Democrats would perform a thorough line-by-line examination of the state budget. They have failed to live up to that promise.
• House Republicans have identified over $200 million in budget savings. Some of those savings are: salary reductions for state employees, higher contributions from state employees for their own health care, sale of the state vehicle fleet and a freeze on the purchase of private land by the DNR. See the Appropriations section for more details.

Budget Big Picture

Continue reading…

Word of the Day
eggtaggle – The act of wasting time in bad company.
John Jamieson’s Etymological Scottish Dictionary, 1808

Budget Big Picture

• The global Democratic target of $5.8 billion represents a 4 percent reduction compared to adjusted FY 2009. However, the 99 percent expenditure limitation only allows spending of $5.7 billion. That means Democrats must come up with at least $105 million in transfers or tax increases in order to balance the budget.
• Even with these new numbers, remember that the two budgets Governor Culver and the Democrats have approved over the last two legislative session are the highest spending and second highest spending budgets in the state’s history.
• The original and revised FY 09 budget is the first budget to exceed the $6 billion mark. The budget that Gov. Culver and the Democrats will approve this session will be the third highest spending budget (not counting the stimulus money) and will be almost a half a billion dollars more than the last budget approved by Governor Vilsack and House Republicans.
• If Democrats simply went back and approved the last budget House Republicans approved when we were in charge of both chambers (FY 05), the state would have a surplus.

Bonding Plan

Gov. Culver has proposed a $750 million bonding plan that if approved will need to be paid back over 20 years. Some of the project submitted to the Governor’s Office to be included in the plan are:

• The Tower of Invincibility: A grand tower of at least 10 stories built in the center of Vedic City in Jefferson County that will allow grand vistas of the city in all directions.
• Bronze Sculptures: Two full-size bronze sculptures of John Bloom’s WPA mural “Shucking Corn” in downtown DeWitt to create an entrance identity for DeWitt.
• Golf Practice Green Relocation: Relocation , landscaping, bridge replacements and cart path extensions for a golf course in LeMars.
• Football Coaches Offices: Coaches office addition at the Athletic and Wellness Center at Loras College in Dubuque.
• Parking Ramp: 392 stall parking ramp for the University of Dubuque.
• Land for the Des Moines Airport: Purchase of 600 acres for future runway replacement at Des Moines International Airport. NOTE: This would seem to be the opposite of a “shovel-ready” project.
• Library Book Drop: Constrution of a library addition for a book drop for the library in Newton.

Transparency

Keep reading…

Word of the Day
Buy the rabbit – When a person gets the worst of a bargain, he is said to have “bought the rabbit.”
John Camden Hotten’s Slang Dictionary, 1887

Budget Discussions

• Republicans believe the Governor and Legislative Democrats should accept their share of the blame for the fiscal mess the state is experiencing. It is not the fault of misguided federal policies, greedy Wall Street bankers or the natural disasters. We must be clear– when we left last May we had already had built ourselves a $563 million shortfall. We now face $800 million shortfall. Most of the shortfall was caused by a lack of discipline and a failure of foresight with Iowans’ dollars not by Washington or Wall Street or natural disasters.
• Republicans are skeptical of the governor’s request to borrow $750 million through bonding. According to the State Auditor, using the RIIF for infrastructure (vertical or horizontal) would provide, in just a 3-year period, more than the $700 million of bonding proposed by the Governor that requires a 20-year payback.
• If the infrastructure fund was used for what it was intended instead of spending it on various non-infrastructure priorities, this borrowing discussion wouldn’t be happening.

Big Union Bailout

• “Fair Share” isn’t fair, it is a big union bailout. Unions are failing to retain and grow membership on their own so they are turning to their political allies in the Legislature to save them.
• “Fair Share” is forced unionism. It forces non-union employees to pay dues to an organization that not only do not belong but also one that may disagree with substantially on political and social issues.
• House Republican are opposed to the forced payment of union dues by non-union employees. House Republicans are also opposed to forcing unions to represent non-union employees.
• A representative from SEIU told the Des Moines Register in January that the forced union dues won’t go to cover their costs associated with represented non-union members but instead will go to increased organizing and recruiting.

Doctor Shopping

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Word of the Day
Lethiferous – Deadly, fatal, occasioning death or destruction
T. Edward Zell’s Popular Encyclopedia, 1871

Big Union Bailout

• “Fair Share” isn’t fair, it is a big union bailout. Unions are failing to retain and grow membership on their own so they are turning to their political allies in the Legislature to save them.
• “Fair Share” is forced unionism. It forces non-union employees to pay dues to an organization that not only do not belong but also one that may disagree with substantially on political and social issues.
• House Republican are opposed to the forced payment of union dues by non-union employees. House Republicans are also opposed to forcing unions to represent non-union employees.
• A representative from SEIU told the Des Moines Register in January that the forced union dues won’t go to cover their costs associated with represented non-union members but instead will go to increased organizing and recruiting.

Doctor Shopping

• This destroys an employer’s opportunity to contract for health care. As a result insurance premiums will increase greatly.
• The bill, HF 530, provides that an employee may select their own doctor by having that doctor on file with the employer. There is no requirement that the doctor be a specialist or occupational physician or have any experience or specialty in the injury sustained by the employee.
• This bill attempts to “fix” a system that is not broken.
• Iowa workers already enjoy the highest maximum benefits of any state in the Midwest. Iowa’s rate of $1,206 per week outstrips the next highest performer, Minnesota, by $456 per week, and is far ahead of Nebraska, Illinois, South Dakota, Kansas, Missouri, and Wisconsin. In fact, Iowa is ranked third nationally, behind only the District of Columbia and New Hampshire.

Prevailing Wage

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Word of the Day
Bodword – An old word for an ominous message
John Brockett’s Glossary of North Country Words, 1825

Big Union Bailout

• “Fair Share” isn’t fair, it is a big union bailout. Unions are failing to retain and grow membership on their own so they are turning to their political allies in the Legislature to save them.
• “Fair Share” is forced unionism. It forces non-union employees to pay dues to an organization that not only do not belong but also one that may disagree with substantially on political and social issues.
• House Republicans are opposed to the forced payment of union dues by non-union employees. House Republicans are also opposed to forcing unions to represent non-union employees.
• A representative from SEIU told the Des Moines Register this week that the forced union dues won’t go to cover their costs associated with represented non-union members but instead will go to increased organizing and recruiting.

Prevailing Wage

• The battle over the prevailing wage bill isn’t over. Democratic leaders and the Governor have vowed to pressure those Democrats who voted “nay” into voting “aye” before the end of the session.
• The prevailing wage bill favors large contractors at the expense of small rural contractors. The fringe benefit requirements contained in the bill price many small contractors out of the bidding process.
• The bill requires all contractors to offer fringe benefits such as a pension and vacation. The problem for small rural contractors is that since some of their job will only last a few weeks, instead of paying the fringe benefits they are required to increase the pay of the employee by the same amount.
• The same Fiscal Note estimated that project costs would increase 10 percent to 12 percent increase due to prevailing wage.
• The last state to pass prevailing wage legislation was Minnesota, in 1973. Nine states have since repealed their laws, including Ohio. When Ohio repealed the prevailing wage for school construction, the projects saw a 10 percent reduction in project costs.

Other Message Points

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Word of the Day
Gardyloo – A warning cry about dirty water thrown from window to the streets.
Alexander Warrack’s Scot’s Dialect Dictionary, 1911

Deappropriations Bill

• HF 414, the deappropriations bill for FY 2009, is part of the repairs the Governor and the legislators are forced to enact to deal with the overspending from the last two fiscal years. The bill reduces General Fund appropriations by $30 million. However it then transfers $48 million of revenue into the General Fund and spends most of the $48 million transfer.
• Which in reality makes this a spending bill instead of cutting bill.

House Republicans will offer several changes. Here are three of key amendments:

1. The first amendment cuts office supplies and equipment purchases by $8 million. Across state government, taxpayers pay for $20 million in office supplies and equipment purchases each year.
2. Another amendment prohibits the Department of a\Administrative Services from purchasing new state vehicles for the state vehicle fleet for the remainder of FY 2009 and all of FY 2010. The state regularly purchases as many as 600 new vehicles each year.
3. A third amendment eliminates all open full-time positions in state government that have been unfilled for at least 6 months (exempting correctional officers and stat troopers).

Other Message Points

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Word of the Day
Moonflaw – The wild fancy of a lunatic.
Charles Mackay’s Lost Beauties of the English Language, 1874

• The prevailing wage bill favors large contractors at the expense of small rural contractors. The fringe benefit requirements contained in the bill price many small contractors out of the bidding process.
• The bill requires all contractors to offer fringe benefits such as a pension and vacation. The problem for small rural contractors is that since some of their job will only last a few weeks, instead of paying the fringe benefits they are required to increase the pay of the employee by the same amount.
• A 2007 Fiscal Note from the nonpartisan Legislative Services Agency stated that a prevailing wage law will force the state to hire 17 new employees and cost almost $1.4 million.
• The same Fiscal Note estimated that project costs would increase 10 percent to 12 percent increase due to prevailing wage.
• Prevailing wage laws negative economic impact derives not from requiring union rates, but from requiring rates higher than the free market would offer.

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