Well, the experienced lawmakers were right; funnel week is very interesting to say the least.  WOW, that is about all I can muster with the energy I have left.  But I wouldn’t trade this experience for anything.  Some of the bills that I thought were in good shape at the end of last week were not and some of the ones that I thought were done, well some of them survived.  It just goes to show that there are lots of different ideas of what is important.

That diversity is one of the things that make our form of government the best in the world.  Democracy is far from perfect and we will continue to try to improve the process.  But it still far exceeds all the other governments in our world.  I am very proud to be an American and to have the opportunity to be here representing you in Des Moines. 

The experience that I am receiving as your elected representative is irreplaceable.  There are very few countries in the world, which someone as myself could grow up and become an active voice and working part of the State Lawmakers. 

The commerce committee met on Thursday, March 13, 2003 in the morning.  The only bill that was discussed in the committee was HSB 293.  Our Chair, Representative Hansen, offered this bill.  When the chair offers a bill or amendment they need to turn the chair over to the vice Chair.  I am the vice chair of the Commerce Committee. 

The bill as amended would affect 5 or 6 of the largest credit unions in the state.  HSB 293, as amended, says that once a credit union has surpassed a level of one hundred and fifty million dollars in assets, or some other details that get too technical to describe in this letter, then the credit union would be liable for a state tax of 5% of their net income less dividends.  This bill actually encourages credit unions to give a higher portion of excess capital back to their members like they were originally intended to do.  If you think about it this bill actually benefits the credit union members and puts more of their money into their own pockets.  After much discussion this bill passed as amended 15-8.  The same bill passed out of the senate earlier in the week.  The bill will most likely be sent to the Ways and Means Committee.

On Thursday, March 6, Standard & Poor’s released a credit rating report, which reaffirmed Iowa’s AA+ credit rating.  The report also classified the state’s outlook as stable and gave a favorable review of the state’s fiscal management.

The report states that Iowa’s credit rating will remain at AA+ because of a stable and diversifying economy, conservative fiscal management with a demonstrated willingness to restrain spending to maintain fiscal integrity, good finances (buoyed by statutory reserves) and a very low debt burden.

On the economy, the report states that while Iowa’s economy retains strong ties to agriculture, the state is moving towards value-added agriculture and biotechnology.  In addition, growth in the state’s substantial finance, insurance and real estate sectors has diversified the economy away from the cyclical and often troubled durable manufacturing and agricultural sectors.  Despite an economic downturn, both income and employment growth have remained positive and the 2002 unemployment rate of 3.7 percent was two full percentage points below the national average.

The report states that the 99 percent expenditure limitation, the statutorily required cash reserves and the Legislature’s ability to make the necessary cuts to sustain fiscal stability and maintain fiscal integrity are all viewed as major credit strengths.  Also, the report states that Iowa has a very low debt burden, with the bonds issued for prison construction, the Iowa Communications Network and Regents’ academic revenue bonds (tuition replacement) accounting for less than one percent of the general fund budget.

The report concludes by stating that the stable outlook reflects the expectation that Iowa’s strong financial management will allow the state to return to balanced operations in the near future and rebuild reserves while addressing a slowdown in revenue growth.

In contrast to the solid rating given Iowa, neighboring states did not fare as well.  Minnesota has been placed on negative credit watch (meaning its credit rating could soon be downgraded) while Illinois, Kansas and Wisconsin have been given a negative economic outlook.

While the Governor attempted to take credit for this announcement (and he deserves credit for signing the bills the Republican-led Legislature sent him), the bulk of the credit should go to House and Senate Republicans who had the courage to cut the budget in order to put the state on a sound financial footing for the future.

I will be out of state this weekend, so I won’t be at the town hall meetings in Burlington.  I will be in Danville on March 22, at two o’clock in the afternoon at the Danville Community Building.

Until next week,

Tom Sands