Iowa House approves government efficiency plan; savings questioned

Following on a 2010 government reorganization effort that saved state government more than $200 million, the Iowa House approved legislation to save less than a half million dollars a year.

It will cost $3.5 million to implement Senate File 396, $3 million a year to maintain and the layoffs of 48 FTEs, but save the state nearly $405,000 a year, according to the Legislative Services Agency.

Despite some lawmakers' reservations about the wisdom of the plan, the House voted 77-20 to send the bill back to the Senate, which approved a slightly different version 50-0. If the Senate accepts the House changes, the bill goes to the governor. If not, it's likely to go to a conference committee.

A major difference between the two versions was the House reinstatement of language consolidating human resources services in the Department of Administrative Services. Floor Manager Rep. Chris Hagenow, R-Windsor Heights, acknowledged the upfront cost, “but there are substantial savings to the state after that.”

At what price, wondered Rep. Vicki Lensing, D-Iowa City, who was involved in the earlier government reorganization effort.

“We're going to be spending $3 million a year to maintain this program to save $400,000 and I still have questions about how it all fits together,” she said. She would prefer that the changes be phased in to give state employees an opportunity to buy into the reorganization.

The changes will be phased in over three years, Hagenow said, “but it's probably good to get started right away.”

The House also amended SF 396 to restrict the authority of the state chief information officer, a new position created to consolidate and organize the state's technology services, to hire more employees than previously approved.

Most lobbyists were neutral on the bill, but emergency medical services and technology companies, such as Microsoft, were registered in support.

Also Wednesday, the House approved House File 641 87-9 to authorize “reinvestment districts” for economic development. Local governments could capture two-thirds of the state sales tax and the state hotel excise tax generated by new projects within an established district to be used for capital investment of the new project. It was referred to as a “sales tax TIF,” referring to Tax Increment Financing that captures new property tax revenue from economic development to pay for capital improvements.

Floor manager Rep. Josh Byrnes, R-Osage, assured colleagues the bill, which came together recently, contains sufficient transparency and accountability, including a provisions requiring reinvestment districts to have oversight and approval by the state Economic Development Authority.

It was generally supported by building and trades unions, builders and some cities, including Iowa City and Cedar Falls. No lobbyists were registered opposing the bill, but several groups were “undecided.”

The House will be in session Thursday, but no floor action is planned.

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