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Lower estimate of state tax revenue, but no more cuts in state budget

December 11, 2009 By

A three-member panel today lowered its estimate of state tax revenue by about 50 million dollars over the next year and half. The governor’s staff says the decline is not large enough to trigger another across-the-board cut in the state budget.

Revenue forecasters now predict an 8.5 percent decline in state tax revenue this year compared to last year. In October, the governor ordered a ten percent across-the-board budget cut, creating enough of a cushion to cover the latest revenue decline.

Dick Oshlo, the governor’s budget director, says there are some signs that Iowa’s economy is entering recovery mode.

“We’re optimistic that some improvement is showing somewhere,” Oshlo says. “It’s still a tight budget in Fiscal Year ’11.”

David Underwood, the retired chief financial officer of a cement company in Mason City, sits on the state’s three-member Revenue Estimating Council. Underwood says consumers continue to be the weak link in the economy.  

“Everybody’s waiting for the deal…whether it’s the ‘cash for clunkers,’ whether it’s buy-a-house-and-get-a-federal-tax-credit,” Underwood says, “or waiting for the 70 percent mark-downs at the retail stores.”  Underwood says he’s “guardedly optimistic” about the future.

Governor Culver issued a written statement, saying the Revenue Estimating Conference report shows there are “tough decisions” ahead, but confirmed “previous reports from (his) Council of Economic Advisors that Iowa has likely seen the worst of the national recession.”

House Democratic Leader Kevin McCarthy of Des Moines says the legislature now will be able to balance next year’s state budget without a tax increase.  “And we’re going to institute an aggressive government reorganization plan, potentially of a few hundred million dollars and unlike almost every state in the country we have health cash reserves — almost $600 million dollars in our cash reserve,” McCarthy says.  “So the (Revenue Estimating Council) recommendation — a status quo recommendation in a sense — given what we could have been facing, is good news.”

The three members of the Revenue Estimating Conference stressed caution about the future, saying it’s extremely difficult to predict state tax revenue during a recession. 

 ”I think it was good that the R.E.C. today was conservative in their estimate, fiscally conservative, because there are a lot of signs that the economy is getting better,” McCarthy says. “Housing starts are up 39 percent. Personal income looks to be slighly up. Holiday sales are slightly up, but they wanted to be conservative so we’re not in a situation in March where we have to make some unexpected cut (in the state budget), but before you can have a recovery in a state, you have to stabilize — and it looks like we have reached that stabilization phase.”

Republican legislative leaders were less optimistic.  House Republican Leader Kraig Paulsen of Hiawatha says the Democratic governor and Democrats in the legislature created a “real budget mess” that wasn’t fully remedied by the 10 percent across-the-board cut.

Filed Under: Business, Politics & Government Tagged With: , , , ,

Labor leaders say it’s time for major tax changes, tax increases

December 11, 2009 By

Two top labor leaders say the state’s tax system is out of whack and it’s time for change. 

“I do think we need to look at the whole system,” says Janice Laue, secretary/treasurer of the Iowa Federation of Labor, AFL-CIO. 

 ”Iowa is a state that has regressive taxes on the whole…The sales tax is the most regressive tax. The income tax is more progressive, but even with the sales tax, the income tax and the property tax — the poor people in this state — the lower income people in this state — pay more as a percentage of their income in taxes than do the well-off.”

[Read more...]

Filed Under: Business, Politics & Government Tagged With: , , , , ,

Weather could cause more travel problems this weekend

December 11, 2009 By

Iowans who plan to do any traveling this weekend will want to check the latest weather forecast and road conditions first. National Weather Service Meteorologist Brad Small says light snow, patchy freezing drizzle and fog could present problems for motorists.

“It won’t be a storm anywhere near like what we saw with the last one or even the previous one over last weekend. This will be much lighter precipitation amounts, but unfortunately even just a light amount of freezing drizzle or light freezing rain can cause travel difficulties,” Small said.

The cold temperatures will persist as well with highs in the 20s to low 30s. The chances for precipitation ramp up after Saturday morning. “Early Saturday looks good, but as we get further in the weekend – late Saturday and Sunday, even into early Monday – that’s when we’re seeing the great potential for precipitation,” Small said.

“Just keep an eye on the forecast and the road conditions before you head out. The conditions, as this precipitation develops, may be different in various parts of the state but we are expecting it to affect all portions of the state at some time or another.”

Check the latest weather here: www.weather.gov

Check Iowa road conditions here: http://www.511ia.com

Filed Under: Weather

Group seeks, support, funds to save the U.S.S. Iowa

December 11, 2009 By

Representatives of the California group seeking to save the U.S.S. Iowa battleship were recently at the state capitol building in Des Moines to try and gain attention and more funding for the effort. Marilyn Wong is a spokesperson for the Historic Ships Memorial at Pacific Square on Mare Island where the Iowa is docked.

She says it’s right outside of San Francisco and is within 10 miles of the internally acclaimed Napa-Sanoma wine country. Wong says the volunteer group has already raised four million dollars which went toward the initial steps in securing the ship. Wong says it has mostly been a California effort and they were successful in moving the ship from Rhode Island to its California.

She says the move will assure the ship’s financial future as a museum and a memorial. Wong says the money also included the work for the formal application to the nave to acquire the ship. The group needs to raise a total of 18-million dollars and needs to show it has raised a significant amount of that money to get the government to sign off on the project. Wong says they would like to get the state to chip in money too, but she admits the economy makes it tough.

Wong says it’s “a terrible time, a most challenging time’ in the evolution of their project, but she says the ship can’t wait and it won’t wait. Wong says the alternatives to making the Iowa a museum are to see the historic battleship go away. She says the ship would be scrapped or sunk in target practice and to the group they are not options.

The U.S.S. Iowa was the namesake for a new class of battleships and was launched in 1942. The ship carried President Franklin Roosevelt to Tehran for meeting of international leaders during the war in 1943. For more information on the fundraising effort, go to www.battleshipiowa.org. Wong says her group plans to visit Iowa frequently to continue seeking donations to help save the ship.

Filed Under: Human Interest, Military

Insight Bowl seeking to get local TV approval from NFL Network

December 11, 2009 By

A representative of the Insight Bowl says they are working to find a way to let thousands of Cyclone fans who do not have satellite T.V. get access to the television broadcast of the bowl game. The game will be shown on the N.F.L. Network, which is not carried by the Mediacom cable system in Iowa. Insight spokesman Jim Fields says they hope work something out.

Fields says the N.F.L. Network has done a good job and has expanded its distribution by 10-million homes. He say one of the things they will do is to work with the network to find a way for people in Iowa to see the game. Fields says they joined with the N.F.L. Network for financial reasons. He says this is their fourth year with the N.F.L. after being on E-S-P-N. Fields says the N.F.L. Network made them an offer they couldn’t refuse.

Iowa State athletic director Jamie Pollard says it is unlikely Mediacom would pick up the game. Pollard says he doesn’t anticipate that Mediacom will change their corporate stance that they aren’t going to pick up the N.F.L. Network. He says the Insight Bowl is working on getting an agreement with an over-the-air station for the game. Fields says they have worked out agreements for the local markets of the teams in the past to carry the game. The Insight Bowl is New Year’s Eve and pits the Cyclones against Minnesota.

Filed Under: Sports Tagged With: ,

Report says Iowa spending less on smoking prevention

December 11, 2009 By

A report from a coalition of public health groups finds Iowa is still getting tens of millions of dollars from the legal settlement with tobacco companies, but is spending less and less on smoking prevention and cessation programs. Danny McGoldrick is vice president of research for the Campaign for Tobacco-Free Kids. He says key elements of the landmark 1998 settlement are being ignored in the Hawkeye State.

McGoldrick says, “Iowa ranks 17th in our report this year so they’ve made a modest investment in tobacco prevention and cessation programs, but still spending just about 30% of what the (Centers for Disease Control and Prevention) recommends that they spend on tobacco prevention.”

The coalition, which also includes the American Heart Association, says Iowa is spending just over 11-million dollars a year on smoking prevention and cessation programs, but the CDC says that figure should be closer to 37-million, as part of the settlement agreement. McGoldrick says, “With 3,500 Iowa kids becoming regular addicted smokers every year, we need to make a bigger investment to reduce the health impacts and the health care costs of tobacco use.” He says Iowa isn’t breaking any laws by not spending more money on prevention and cessation, but the state is going against what was agreed upon.

“The settlements really left it to our state legislatures and governors to appropriate the money,” McGoldrick says. “There were a lot of promises made and unfortunately, the promises haven’t been kept when it comes to using those resources to fund programs that we know will work if we just put the resources to the interventions that are proven to be effective in reducing smoking among kids and adults.”

The report finds 19% of Iowa high school students polled say they smoke, a number that hasn’t changed much in a few years.

“Youth smoking rates have leveled out,” McGoldrick says. “After years of coming down, they were skyrocketing before the settlement and then some states invested some money in tobacco prevention programs and prices went up as the companies raised prices to pay for the settlement. In the last few years, our progress has leveled out.

Nationally, adult smoking actually had a slight uptick in 2008.” He says about one-billion dollars is spent every year in Iowa treating tobacco-related illnesses. He says tobacco use is the number-one cause of preventable death in the U.S., killing more than 400,000 Americans every year and costing our nation nearly 100-billion in health care bills. For more details, visit: “tobaccofreekids.org“.

Filed Under: Health & Medicine Tagged With:

Charities see donations down

December 11, 2009 By

The holiday season is a critical time for charities to raise money, but many are reporting that donations are down this year because of the slow economy. Lois Buntz is president and CEO of the United Way of East Central Iowa. She says overall contributions are down and the organization could end up falling short of its goal by hundreds of thousands of dollars.

“I think it’s going to be a real uphill struggle for us to get to the goal this year,” Buntz said. “We’re just appealing to the public…if you can do a little bit more and you’re employed, we would certainly appreciate it.” The United Way also provides funding to other organizations like Waypoint, which serves women and children affected by homelessness, poverty, domestic violence and sexual assault. Waypoint Executive Director Liz Hoskins says the dip in donations is troubling.

“We’re a little concerned about it, but we’re hoping that our donors will able to come through for us in the end because we really rely on that funding to provide our most critical services,” Hoskins said. Big Brothers/Big Sisters in the Cedar Rapids area had to make staff and program cuts this year because of budget concerns. Big Brothers/Big Sisters spokesperson Kathy Beardsworth says they not only need money, they need volunteers.

“One of our biggest needs is for male role models,” Beardsworth said. “We’ve got a lot of boys growing up in single-parent homes and moms are looking for that male role model.” Just about every charity has some concerns about finances this year, but they’re all hoping people will be generous during the final weeks of December.

By Mark Geary, KCRG-TV, Cedar Rapids

Filed Under: Human Interest
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