Linda Upmeyer
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Iowa House of Representatives State Representative Linda Upmeyer Address: State Capitol, Des Moines, IA 50319 Phone: (515) 281-3221 E-Mail: [email protected] For the week of March 24—28, 2008 Appropriations Revenue Estimating Conference to Meet April 4th, Majority Party Looking to Spend Additional Revenue In an exchange on the House floor this week, Representative McCarthy said the majority party had a balance sheet but would not be sharing it because it would be “meaningless”. This is because the majority party is waiting until after the Revenue Estimating Conference (REC) meets on April 4 to decide if they should scoop any additional revenue that is forecasted. The REC consists of Charlie Krogmeier (Department of Management Director, Governor’s designee), Dennis Prouty (Legislative Services Agency Director, Legislature’s designee), and David Underwood (retired CFO and Treasurer, AADG, Inc. in Mason City, designee of the other two members). The REC is responsible for setting the revenue estimate to be used by the Governor and the Legislature when formulating the budget. According to Chapter 8.22A of the Iowa Code: • By December 15 of each fiscal year the conference shall agree to a revenue estimate for the fiscal year beginning the following July 1. That estimate shall be used by the governor in the preparation of the budget message and by the general assembly in the budget process. • If the conference agrees to a different estimate at a later meeting which projects a greater amount of revenue than the initial estimate amount agreed to by December 15, the governor and the general assembly shall continue to use the initial estimate in the budget process for that year. • However, if the conference agrees to a different estimate at a later meeting which projects a lesser amount of revenue than the initial estimate amount, the governor and the general assembly shall use the lesser amount in the budget process for that fiscal year. The REC gross revenue estimate for FY 08 is 6.9 percent and the estimate for FY 09 is 2.7 percent. Although there are some ominous economic signs on the horizon, year-to-date revenue growth is running at 11 percent above FY 07. Therefore, while the REC might stay at 2.7 percent for FY 09 (or go lower), it will be more than made up for by the expected increase for FY 08. If, for instance, the REC were to increase the FY 08 estimate to 7.9 percent, it would increase available revenue by $60 million provided they do not increase the estimate for tax refunds. That would allow the REC to lower the estimate for FY 09 to 1.8 percent. This is because 1.8 percent growth on the higher base of 7.9 percent will actually generate just as much revenue as 2.7 percent on a 6.9 percent base. Since Krogmeier will likely push for the higher estimate for FY 08, he will probably have to agree to lower the FY 09 estimate in order to address Underwood’s concerns about the future of the economy. Conversely, with revenue running above 11 percent, it will be difficult for Underwood to argue that the FY 08 estimate should not be revised upward. Under this scenario, the majority party would not have to notwithstand the expenditure limitation law (as outlined above) because they would simply be increasing the amount of supplemental appropriations and like last year, allow the money to be carried forward into FY 09. Considering they approved $50 million of supplemental spending in FY 07 which was carried forward into FY 08, this would be one way to increase spending without having to notwithstand the expenditure limitation law. Despite these additional funds however, the majority party will need one-time proceeds from another round of tobacco securitization ($103.3 million) and shift up to $90 million of general fund spending into the Rebuild Iowa Infrastructure Fund (RIIF) in order to finance the excessive spending approved last year. This level of spending (approaching $1 billion over two years) is simply not sustainable. House Republicans continue to push for sunshine when it comes to Iowa’s budgeting process in anticipation of the REC meeting on April 4. Agriculture DNR Reminds Livestock Producers/Crop farmers to Test Soils Before Applying Manure On Thursday, March 20, 2008, the Department of Natural Resources (DNR) issued a press release reminding farmers who apply manure this spring that under revised DNR rules that went into effect last September they must sample and analyze their fields concerning the amount of phosphorus and the acidity in the soil before manure is applied. This change in manure application regulation is due to full implementation of the phosphorus index that estimates the potential for this crop nutrient to move from the soil and into our state’s surface waterways, where an excess amount of this element can cause significant degradation of water quality. The phosphorus index takes into account the lay of the land, the distance from a stream and the phosphorus that is in the land. The phosphorus index has been required of livestock producer who built new confinement feeding operation for the last several years, but is not required for everyone who is required to submit a manure management plan. The soil testing aspect of the phosphorus index requires at least one soil sample for each 10-acres in a field that will be fertilized with manure. Producers may keep the result of the test on site, but must use the information to complete a manure management plan (MMP) using a phosphorus index every 4 years. DNR stressed that it will not be granting exemptions or extension of the deadline for P-index-based MMP and failure to meet this timeframe will result in enforcement action with a significant fine. For more information about this requirement visit the DNR Web site: www.iowadnr.gov/afo/mmp.html#phosphorus or www.iowadnr.gov/afo/files/pindex_fs.pdf. Check the Iowa State University soil fertility Web site for information about soil sampling at extension.agron.iastate.edu/soilfertility/. Finally, more information about the P index can be found in back issues of Odor and Nutrient Management at the Iowa Manure Management Action Group’s Web site at http://extension.agron.iastate.edu/immag/pubsnl.html. The DNR also issued a related press release n March 20, notifying livestock growers responsible for developing MMP that they can now update the yield data for corn and soybeans which affect the calculation of how much nitrogen from manure might be used by the ensuing crop. Each year the National Agricultural Statistical Service calculates average yields in all Iowa counties. Producers can use the county averages from the last five years to determine their optimum yield for developing a manure management plan for the DNR. Producers can find the updates in Appendix A of the 2 DNR’s manure management plan. It’s available in DNR field offices and on the DNR Web site at www.iowadnr.gov/afo/forms.html . USDA Secretary Announces New Conservation Security Program Sign-Up On Wednesday, March 19, 2008, United States Department of Agriculture (USDA) Secretary Ed Schafer announced a sign-up for the Conservation Security Program (CSP). It is available starting on April 18 to approximately 64,000 potentially eligible farms and ranches in 51 watersheds covering more than 23.7 million acres. "As President Bush has said, those who depend on the land to make a living are the best stewards of the land," said Schafer in a USDA report. "Since the first sign-up in 2004, CSP has offered payments for enhancing natural resources, rewarding those farmers and ranchers who are model conservationists, and providing incentives for other producers to achieve those same high standards of conservation in agriculture." The CSP sign-up is open in the 51 watersheds from April 18 to May 16. One watershed in Iowa is involved and it is the Middle Iowa with the affective reach beginning just below where Minerva Creek joins with the Iowa (Just West of Albion in Marshall County) to Coralville Reservoir Dam near Iowa City in Johnson County. The Middle Iowa watershed is located in Grundy, Story, Marshall, Tama, Benton, Linn, Jasper, Poweshiek, Iowa, and Johnson Counties in East Central Iowa. More information is available at www.ia.nrcs.usda.gov/programs/csp2008.html. This means that nearly one-million acres (908,299) and an estimated 2,781 Iowa farmland owners are eligible for this CSP sign up. This is the eighth watershed in Iowa that has been eligible for CSP sign up. The original pilot projects in 2004 involved the East Nishnabotna, and Blue Earth River. In 2005, the Turkey, Upper Wapsipinicon, and North Raccoon watersheds were eligible for CSP sign up. In 2006, the South Skunk, and Little Maquoketa watershed were eligible for CSP sign up. CSP is a voluntary conservation program that supports ongoing stewardship of private, agricultural working lands and rewards those producers who are meeting the highest standards of conservation and environmental management on their operations. Payments can include three components: 1. An annual stewardship component for the base level of conservation treatment 2. An annual component for maintenance of existing conservation practices 3. An enhancement component for exceptional conservation effort. Enhancement activities could include limited pesticide applications, renewable energy generation, and widening existing riparian forest buffers for restoring critical stream habitat. To apply for CSP, NRCS asks potential participants to complete a CSP self-assessment workbook -- http://www.nrcs.usda.gov/programs/csp/ or from local NRCS offices -- to find out if their operation meets the requirements of the program and qualifies for program participation.