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FD Area Chamber of Commerce key legislative issues

April 11, 2010
Messenger News

City update

State update

Such issues as the newly passed law that bans texting while driving, elimination of certain tax credits, improved benefits for trailing spouses of our military and the opportunity for Iowans to support the refurbishing of the battleship USS Iowa as a museum were approved.

The main focus of the General Assembly was a balanced budget for FY 2010 that left an estimated surplus in the General Fund of $64.7 million.

The balance sheet showing all of the spending that will be approved for fiscal years 2010 and 2011 session paints a bleak picture. According to the nonpartisan Fiscal Services Division of LSA the built-in spending approved so far exceeds $1 billion for FY 2012.

Future funding for Medicaid provides a picture of the challenges ahead. In the FY 2007 state budget, $652 million of the $771 million of state funding spent on Medicaid came from the state's General Fund. Over the last four years, while the cost of Medicaid has grown, the use of General Fund resources to pay for it has dropped.

Next fiscal year, the state will use almost as much one-time money and nonrecurring funding for Medicaid as it will from the General Fund and the 2007 cigarette tax increase. Among the sources will be $225 million of federal stimulus funds, $187.8 million taken from the state's Cash Reserve Fund, and the final dollars will come out of the Senior Living Trust Fund.

This may get the state through FY 2011, but it creates a monumental problem in FY 2012. With a normal growth factor for the program of 6 percent, Iowa would need $1.071 billion to maintain the current program. The recurring revenue that would be spent on Medicaid is $534 million. This means that the next governor and the 84th General Assembly will have to find $537 million in new money to maintain Medicaid as it is today, let alone funding for other human service programs, education, public safety and other priorities.

Federal update

Just like the state budget, the federal budget is in deep trouble. It is estimated that in the next budget year, 40 cents of every dollar raised by taxes will go toward financing interest on our out-of-control debt. We still don't know for sure how we will be able to finance the newly passed health care reform package, so Congress and the president are in a tough situation. Most other issues have yet to be addressed as they were held up by the long and tough debate on health care reform.

If there are other issues of importance that you feel are not being addressed, please contact the Chamber's Legislative Committee at

Submitted by the Fort Dodge Area Chamber of Commerce Legislative Committee.



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