Tag Archives: iowa

Tuesday Vote; 2012 Consequences

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Elections, no matter the year, do make a difference. Sure, some are more important than others. Michael Davis, who led the Indiana Chamber’s political affairs efforts before joining BIPAC in Washington, offers his analysis of what next week’s national votes mean for the states involved and for 2012. Here are some excerpts:

With three states holding gubernatorial contests, four states holding state legislative elections plus numerous special election and ballot initiatives, the 2011 elections may give us an early preview of how upset voters will be throughout next year.

The results for next week’s elections, particularly the fights for control of the Virginia State Senate and the Mississippi House of Representatives, may give us an early indicator of what issues will be top of mind for voters (economy, jobs), which voter base is more motivated (look for turnout numbers of those identified as younger voters, Tea Party supporters, 2008 Obama supporters and independent voters) and if voters will continue to be more than willing to retire incumbent candidates seeking re-election (should be higher than historical averages, but will they be higher than that of the last couple of cycles?).

One of the big stories of the night could be the locking up of the South by Republicans.  If the GOP can gain control of the Virginia Senate and Mississippi House, Republicans will control the State House, State Senate and Governor’s office of every Southern state except Arkansas.

Here is a list of top races to watch on Tuesday, November 8:

Control of the Virginia Senate.  Democrats currently control the State Senate by a 22-18 margin, but Republicans in Richmond are optimistic they will win back control.This would give Republicans control of the Senate, House and Governor’s office at the same for only the second time in state history. Following the election, control over the state’s congressional redistricting process looms large.

Control of the Mississippi House. Democrats currently control the House by a 68-54 margin with Republicans strongly knocking on the door to win control. Like in Virginia, this would give Republicans control of the Senate, House and Governor’s office. The Republican playing field is large enough and there are clearly enough districts with favorable numbers to put Republicans in control.

Ballot measures. Issue 2 in Ohio, an effort to repeal a 2011 act that places limits on collective bargaining for public employees, will likely attract the most national attention.

Iowa State Senate District 18 special election. With Democrats holding a 25 to 24 majority, this special election will result in either Democrats holding a 26 to 24 majority or the State Senate being evenly split 25 to 25 heading into the 2012 legislative session. Anyone who has been through an evenly a legislative session with an evenly split legislative body can give you an excellent definition of "chaos" or "gridlock."   

Pres. Obama Losing Support of Independents

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Here are some interesting — though maybe not surprising — findings from a poll following our latest government debt deal drama. It shows President Obama is losing the independent voters that were so crucial to his initial election. Although, does this mean they’ll be voting for the GOP in 2012? My gut tells me a lot of people will stay at home with a case of disgust that day, although much could change for both parties between now and then.

President Barack Obama has sought to cut deals with congressional Republicans, including the “grand bargain” to cut the deficit and raise the debt limit, partly to appeal to independent voters, aides suggest.

It appears Mr. Obama still has a long way to go, according to a CNN/ORC International poll.

In a hypothetical matchup with former Massachusetts Gov. Mitt Romney, the GOP race’s front-runner, the president loses the all-important independents 53% to 41%. Among the larger survey of registered voters, Messrs Obama and Romney are running neck and neck, 49% to 48%.

In a matchup with Texas Gov. Rick Perry, Mr. Obama is ahead 51% to 46%, while independents split evenly –46% –for the two men.

The survey of registered voters has a margin of error of three percentage points. The margin increases to 4.5 percentage points for responses from independents.

Mr. Obama still tops every declared Republican candidate in the poll’s hypothetical contests, but it shows voters prefer former New York Mayor Rudy Giuliani, who has not taken any serious steps toward running, over Mr. Obama, 51% to 45%) But independents generally decide elections – they sent Mr. Obama to the White House in 2008, and they gave Republicans control of the House in 2010.

  

More States Challenge Legality of Health Care Law

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It seems the controversial federal health care law is not going through without serious rebuttal from what is now over 50% of America’s states. A state press release has more on the ongoing lawsuit and Indiana’s role:

Today six additional states sought to join the group of 20 plaintiff states — including Indiana – that have brought a legal challenge to the new federal health care law. Attorney General Greg Zoeller, who joined the lawsuit on behalf of Indiana in May, issued this statement:

“Now that the number of plaintiff states has expanded from 20 to 26, it underscores that this lawsuit is widely understood to have merit. After the health care law was ruled unconstitutional in a separate lawsuit in Virginia that raised many of the same arguments, no one now can claim that this legal challenge is a frivolous lawsuit,” Zoeller said.

“Regardless of the eventual ruling by the federal court in our case, it is important that the states have an opportunity as sovereign entities to challenge the constitutionality of the federal government’s claims of authority. Under our federalist system, this respectful legal challenge is a proper check on the role of the federal government,” Zoeller added.

“We and the other plaintiff states contend the federal mandate that individuals purchase a private health insurance product or face a penalty is unconstitutional, and that ultimately this question should be decided by the United States Supreme Court. Having met with Hoosiers across our state, I agree that some type of health insurance reform is needed in this country, but implementing it ought to be done in a constitutional manner,” Zoeller said.

In addition to Indiana, the group of 20 plaintiff states bringing the legal challenge included Florida, South Carolina, Nebraska, Texas, Utah, Louisiana, Alabama, Colorado, Michigan, Pennsylvania, Washington, Idaho, South Dakota, Mississippi, Nevada, Arizona, Georgia, Alaska and North Dakota. Also joining as plaintiffs were two private individuals and the National Federation of Independent Business (NFIB).

Today, the plaintiffs filed a motion with the court to amend the complaint so that six more states can join the case: Ohio, Kansas, Wyoming, Wisconsin, Maine and Iowa, bringing the total plaintiff states to 26. The U.S. Department of Justice represents the federal government defendants.

Indiana’s Business Tax Climate: Not a Perfect One, But a Good 10

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We’re No. 10! We’re No. 10! Not exactly the rallying cry one is used to hearing, but a refrain that deserves more plaudits than usual. Here’s why Indiana’s ranking in the Tax Foundation’s 2011 State Business Tax Climate Index is noteworthy:

  • It’s not easy to make substantial improvements in this area. Indiana has ranged between No.12 and No. 14 over the last five years
  • The top eight seemingly head the list by default as they do not impose one of the big three taxes (sales, income or corporate income). So, without too much of a stretch, you could say Indiana is second on the list
  • We’re far away from the bottom 10; in order from No. 50, that’s New York, California, New Jersey, Connecticut, Ohio, Iowa, Maryland, Minnesota, Rhode Island and North Carolina

The Indiana Chamber’s advocacy efforts certainly are contributing factors to the state ranking. Historic tax restructuring in 2002 (including elimination of the inventory and corporate gross receipts levies) is among the Decade of Policy Victories document reflecting major legislative accomplishments from 2000-2009. The Chamber has also achieved success in general property tax reductions and an expansion of a variety of tax credits (good for business, but not earning high marks in this report).

According to the Tax Foundation, the worst tax codes tend to have:

  • Complex, multi-rate corporate and individual income taxes with above-average tax rates
  • Above-average sales tax rates that don’t exempt business-to-business purchases
  • Complex, high-rate unemployment tax systems
  • High property tax collections as a percentage of personal income

Indiana’s rankings in the five categories are: corporate tax index, 21st; individual income tax index, 11th; sales tax index, 20th; unemployment insurance tax index, 12th; and property index, 4th.

Since this tax analysis game is not for the faint of heart, a little more from the Tax Foundation on how it all works.

The methodology of the State Business Tax Climate Index is centered on the idea of economic neutrality. If a state’s tax system maintains a “level playing field” for businesses, the index considers it neutral and ranks it highly. However, each state’s final score depends on a comparison with the other 49 states.

The overall index is composed of five specific indexes devoted to major features of a state’s tax system. Each of these five indexes is composed of several sub-indexes.

Each state’s laws and tax collections were assessed as of July 1, 2010, the first day of the 2011 fiscal year. Newer tax changes are the subject of commentary in an appendix but are not tallied in the scores and rankings.

The Tax Foundation has data charts, further analysis and a full 60-page report. By the way, you have to go west for most of the rest of the top 10 (in order): South Dakota, Alaska, Wyoming, Nevada, Florida, Montana, New Hampshire, Delaware and Utah.

And finally, going into a state budget year that will bring pressure to raise revenues, let’s all keep the vital importance of the tax climate in mind on business attraction and expansion decisions.

Looking for a Lottery Rebound

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Personally, I have nothing against the lottery. In fact, I joined co-workers back in the 1990s in one of those infamous "everybody throw a few dollars in and we’ll all retire early when we hit it big" plans, only to never, ever get close in several years of playing. We really only earned enough once in a while to buy more tickets. But then I guess that’s why they call it a game of chance.

The number of lottery games have seemingly multiplied at a rapid pace since then. But with the Great Recession of the last few years, and certainly a few other factors, far fewer lottery players have been taking their chances.

According to the National Conference of State Legislatures, lottery revenues declined in 25 states in fiscal year 2009. In addition, they were flat in 10 states and increased in only seven. Indiana had the dubious distinction of the biggest drop, with revenues going down 18.1%. Puerto Rico, Oregon and Arizona were the only others with double digit drops.

North Carolina, with a relatively new lottery, saw revenues increase 17.4%. Others on the positive side of the ledger: North Dakota, Iowa, Ohio, Kentucky, Louisiana and Minnesota.

Finally, the seven states that have not authorized lotteries: Alabama, Alaska, Hawaii, Mississippi, Nevada, Utah and Wyoming.

At one point, many in Indiana questioned whether the lottery was a good idea. That was before horse racing, riverboats, racinos and the like. The tax dollars generated by the gaming industry have become an essential part of the state budget. That’s the safest bet one can make.

More Campuses Just Saying No to Smokers

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In 2007, about 60 colleges and universities had enacted a smoke-free policy. That number has grown to nearly 400.

There has been some external push. Clean air laws in Illinois, New Jersey and Wisconsin require smoke-free university housing. Smoking is prohibited on all public campuses in Arkansas and at every school (public and private) in Iowa. A couple of big players soon join the list, with no smoking at the University of Florida this fall or at any of the three University of Michigan campuses starting in 2011.

For those that still allow lighting up, more have policies that restrict the number of areas and move smokers away from building entrances. What have student reactions been? According to a CongressDaily story:

A Student Tobacco-Free Task Force was created when the University of Denver went smoke-free in January. Similar associations have been created at other colleges to help enforce the policy and support the change.

However, students who oppose the ban on smoking cigarettes outdoors have not remained silent. Groups of students held daily "smoke-ins" in protest when the University of Pennsylvania attempted to ban smoking at all 14 of its campuses in 2008.

The University of Denver found that about two-thirds of the student population was in favor of banning tobacco. "Interestingly, these divisions were not necessarily based on one’s personal use of tobacco," said Katie Dunker, the assistant director of health promotions at the school. "We had students who use tobacco who were for it and students who didn’t who were against it."

A list from the American Nonsmokers’ Rights Foundation puts campuses of 15 Indiana colleges and universities in the total smoke-free category. There are another nine Hoosier campuses rated smoke-free with the exception of some remote outdoor areas.

Business Owner: Entrepreneurs Stunted by Excessive Taxes

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Michael Whalen, policy chairman of the National Center for Policy Analysis and owner of a chain of restaurants and inns in Iowa, offers a personal anecdote about the struggles American entrepreneurs are facing — and he insinuates most elected officials have no clue about the impacts of the many taxes and charges placed upon business owners:

One of the properties my company owns is a 100-room limited-service hotel in Iowa. Let me talk about the taxes this one place pays.  I’ll use 2008 numbers.

For starters, we pay property taxes to the tune of about $199,000 annually.

Next, there is a 7 percent "pillow tax" that generates about $162,000 annually. Then we pay a 6 percent sales tax on revenue that yields about $124,000 annually. Then we also pay sales tax on things like toilet paper, shampoo, soap, continental breakfast food and amenities and other items that the state of Iowa says are not really part of the product we sell because it says we are selling space.  It may come as a surprise to you that toilet paper is not part of what you are buying when you rent a hotel room in Iowa, but the state considers it a gift. Those extra sales taxes come to about $1,800 per year.

Now on to Round 2. This little hotel also pays about $3,000 a year in various licenses and fees. Payroll taxes come to about $60,000. The federal government says the depreciable life of a hotel is 39.5 years, but we refurbish the hotel on a constant basis and pay sales tax on related purchases, such as new carpet, mattresses and bedding, and even paint. Anyone who does not believe we already have a partial value-added tax (VAT) like Europe, isn’t in business. Now, between Round 1 and Round 2, we are at $548,000 in taxes annually.

So, even if we don’t make a dime of profit, and before we pay the mortgage to the bank or buy new stuff, we pay $548,000 in various taxes, licenses and fees.

Round 3 is income taxes at the federal and state level.  I am not going to tell you these numbers, but I can tell you they can be substantial. Because the hotel is owned by a Subchapter S corporation, in which taxes are paid by shareholders rather than the corporation, the income is reported on my personal income-tax return even though it’s not really my personal money.   But President Obama and many in Congress think we don’t pay enough in taxes because we are "rich."

A few years back, I was telling this story of taxes on one little hotel to an important elected official. He replied, "You don’t pay those taxes, your customers do. I don’t get your point." I stood there dumbfounded and simply replied, "My customers pay all of our taxes? Where do you think money comes from?" I swear this is a true story.

I understand that most folks in state legislatures and Congress have never been in business, paid these taxes or met a payroll.  But I cite the experience of venerable pro-tax Sen. George McGovern, who went into the bed-and-breakfast business after he retired from the Senate. Unfortunately, he went bankrupt. When asked what this experience had taught him, he said that he would have voted a lot differently if he had been in business before going to Congress. He is an honest man.

Changing Chairs (Without the Music) in the Senate

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Washington insiders and business interests in several industries are keeping a close eye on what happens as a result of last month’s death of longtime Massachusetts senator Edward Kennedy. The question is who will be the new permanent chair of the Health, Education, Labor and Pensions (HELP) Committee.

Christopher Dodd (D-Connecticut), who guided health care overhaul legislation through HELP as acting chairman, must decide whether to remain as head of the Banking Committee or make the move to HELP. He cannot serve as chair for both.

Bankers are apparently hoping Dodd makes the latter choice. They say Dodd has taken a hardline approach against their industry in an effort to boost his sagging poll numbers as he approaches re-election. If Dodd moves on, Tim Johnson (D-South Dakota) would likely be offered the Banking Committee chairmanship. Johnson would be expected to be a more moderate influence on the panel.

An outside possibility has Iowa’s Tom Harkin giving up leadership of the Agriculture Committee to take over HELP.

Stay tuned. Decisions should be made soon.

Iowa’s Odd Couple

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Chris Cillizza of The Fix had an interesting post today, in which he pontificated upon a reader’s question regarding what state had the most politically opposite Senatorial tandem. He answered "Iowa." Here’s the rub (and having worked in Iowa politics a couple of years ago, I can tell you there’s probably no state as politically charged — and engaged — as the Hawkeye State):

In last week’s first official Fix chat — every Friday at 11 a.m. — we got a question that intrigued us.

"Which state’s senate delegation is the most politically schizophrenic, i.e., has the two senators who are the most diametrically opposed politically?" asked a Fixista from Jackson, Mississippi.

These are the very sort of political debates we L-O-V-E. So, we spent the weekend thinking about the Mutt and Jeffs in the Senate. (Yes, we are aware how dorky that sounds.) Add your own in the comments section below and we’ll update the post to create a full list!

The most obvious Mutt and Jeff tandem is in Iowa where Tom Harkin (D) and Chuck Grassley (R) are on opposite end of the partisan spectrum. In National Journal’s 2008 vote ratings, Grassley ranked as more conservative than 82.3 percent of the Senate while Harkin scored as more liberal than 76.5 percent of his colleagues.

Interestingly, despite their disparate ideological views, both Harkin and Grassley have proven to be unbeatable in the Hawkeye State. Grassley, first elected in 1980, has won his re-election races with 66 percent, 70 percent, 69 percent and 70 percent; Harkin, who claimed his Senate seat six years after Grassley, has had a tougher time of it but has repeatedly beaten back quality foes and was re-elected in 2008 with 63 percent of the vote. 

Less Time in School? You Have to be Kidding

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The article we’re going to link to at the end of this post is from the Des Moines Register, generally regarded as a strong newspaper. The author, Staci Hupp, is a former education reporter for the Indianapolis Star who did an admirable job covering education issues while here in Indiana. (Both are Gannett publications, but we’ll save the fate of newspapers for another day.)

Staci writes a thorough story explaining why an Iowa school district wants a waiver to go to a four-day school week. Money is driving the move, with past questionable budgets and a bookkeeping error putting the district in financial trouble.

While saving money is good, this isn’t the proper route. The absolute most important two sentences of this story are the last two (at least in the online version; we’re sure the research box was a more prominent sidebar in print). They read: 

"Students in Asia and Europe typically attend school an average of 220 days a year. The U.S. average is 180 days, according to the National Conference of State Legislatures."

We can’t afford less classroom time. We’re already falling behind the rest of the world in educational achievement, particularly in the math and science areas.

Iowa, and Indiana, are at that 180-day figure. There are several bills in the Indiana General Assembly that, while not taking the four-day-a-week approach, would also dilute the education effort. The focus should be on more dollars to the classroom, expanding school choice and more. Instead, we’re fighting back gimmicks that would serve no useful purpose and, in fact, prove detrimental to our competitiveness and our young people’s futures.

Here’s the Iowa story. Read to the end as it also references a previous IU study that disputes the potential savings.