Ernst touts fiscal reforms during start of legislative session
Welcome back into our legislative session!
We jumped headfirst into the new session with the establishment of various committees, subcommittee meetings, and Governor Branstad’s State of the State address.
There is a buzz of excitement around the Capitol as we review interim committee work from the past summer and fall.
One such area was the Re-Open Iowa for Business Tour. I am hopeful that the recommendations we have from our rules and regulations tour will put us on our way to a stronger state economy and our tough budgetary steps in the past session will keep our state on a steady fiscal path.
Fiscal/Regulatory Reform
As the second session of the 84th General Assembly gets underway, Senate Republicans are poised to continue their push for legislation that will foster job growth, a stronger economy, and property tax reform.
Last session Republicans took steps to get Iowa’s budget under control. At the outset there were eighty-nine ongoing programs funded with one-time money that was set to run out – close to $900 million.
Republicans pledged to reduce Iowa’s reliance on one-time funds for the support of ongoing programs. This promise was kept.
After years of overspending by Democrats, spending was brought under control this past session.
Republicans fought to balance our budget using only on-going revenue for recurring programs. In the process, we passed a biennial budget that funded most areas for two years – adding predictability to our budgeting process.
However, Republicans recognize the job is not done. We must continue to cut wasteful government spending and encourage systemic change throughout Iowa’s budget to ensure future generations of Iowan’s are not shackled by needless debt.
Republicans will continue to take the necessary steps to bring our state’s fiscal house back in order by using a common sense approach to budgeting. We will continue our work that started last year and strive to provide Iowans with a budget that focusses on essentials and reflects the character and ideals of Iowa’s hardworking taxpayers.
Senate Republicans will continue fighting for common sense regulatory reform in order to encourage job creators to come to our state and give instate entrepreneur’s additional confidence in choosing Iowa as the place to pursue their dreams.
These reforms will result in a stimulated economy and lead to job growth.
Senate Republicans will not be pulling the ideas for regulatory reform out of thin air. Instead, the ideas for reform have been provided by Iowans.
Ethanol Subsidy Expires
The 45 cent ethanol tax credit expired on January 1st of this year. The tax credit was enacted 30 years ago and has been an integral part of the emergence of corn-based blended fuel.
During the course of the tax credit it is estimated that blenders received over $30 billion in credits.
The tax credit along with fuel standard mandates and innovations in the technology of making ethanol have greatly enhanced Iowa’s economy.
As of 2011, Iowa had 41 ethanol plants that produced 3.7 billion gallons of pure ethanol, up from 3.5 billion in 2010. One gallon of ethanol makes 10 gallons of blended E-10 fuel.
In the past, discussions about the elimination of the subsidy have been very contentious.
Today however, the news has barely caused a reaction. Corn prices have changed the marketplace thanks to strong exports and higher demand for ethanol.
In addition to the removal of the 45 cent tax credit, Congress also has removed the 54 cent per gallon tariff on imported ethanol. Currently Brazil is the leading global producer of ethanol – however, instead of corn-based ethanol their product is made from mostly sugar cane.
In Iowa, retailers have consistently priced E-10 blended fuels at prices below the level of non-blended fuels.
In addition there have been more new vehicles produced that can use E-85 blended fuels.
Last year Senate Republicans worked to pass legislation to get blender pumps that will allow the consumer to choose the percentage blend.
Giving the consumer the choice can potentially increase ethanol usage.
The future for ethanol production in Iowa looks bright and remains a real Iowa success.
The ethanol industry employs an estimated 83,000 people and contributes more than $12 billion to Iowa’s gross domestic product and more than $2.8 billion in household income.
The industry also generates $576 million in state tax revenue.
Innovation and technological advances will continue to make Iowa a leader in renewable fuels and continue to benefit economic activity in our state.
I continue to appreciate your support and as always, I welcome your questions and concerns regarding any issue. Please contact me using any of the information below.
You can follow me on Facebook for updates, just “like” Ernst for State Senate or visit my website at www.JoniErnst.com!
Senator Joni Ernst
Joni.ernst@legis.iowa.gov
515-281-3371