The Legislative Services Agency has released its report on September, 2009 tax receipts, as well as analysis of FY 2010 compared to FY 2009 data (what’s available after July, August & September — the first three months of the 2010 fiscal year).   I’ve copied the opening conclusion of the report below, but you can read the entire report for yourself here (and see all the nice graphs).

FY 2010 Compared to FY 2009
Year-to-date FY 2010 total net receipts (excluding transfers) decreased $141.1 million (- 9.1%) compared to FY 2009.

Major sources and their contribution to the FY 2010 change include:
• Personal income tax (negative $34.0 million, – 4.6%)
• Sales/use tax (negative $1.2 million, – 0.2%)
• Corporate tax (negative $26.5 million, – 27.5%)
• Other taxes (negative $17.3 million, – 11.7%)
• Other receipts (negative $12.2 million, – 9.4%)
• Tax refunds not including school infrastructure refunds (negative $12.2 million)
• School infrastructure sales/use tax refunds (negative $37.3 million)

UPDATE: House Republican Leader Kraig Paulsen (R-Hiawatha issued the following statement today in regards to the nonpartisan Legislative Services Agency’s report that revenue was down $141 million or 9.1 percent compared to the first quarter of FY 09.

“Based on the numbers released today and the recent record unemployment numbers, it’s clear that the governor’s $1.7 billion borrowing plan is simply not working.

“We continue to be in this fiscal mess because Gov. Culver signed the largest budget in the history of Iowa.  I have very serious concerns that Gov. Culver will use this as an excuse to raise taxes on hard-working Iowans.  The problem has now carried in to the 2010 budget, which is clearly out of balance.

“House Republicans offered over $337 million in budget savings during the last legislative session and we will continue to offer ideas and create a plan that brings Iowa’s checkbook back into balance without shifting more burden to the taxpayers.”

UPDATE: Republican gubernatorial candidate Chris Rants of Sioux City, a state legislator, quickly issued a statement early this afternoon.

Rants: First Quarter Tax Report Pegs Budget Deficit at $300M

“With the end of the first quarter, Iowans now have a clear picture on the size of Culver’s budget deficit.  Revenues for the quarter are negative -9%.  Half of that is due to Culver’s budgetary slight of hand, and half is a real decline in tax receipts. If you extrapolate that out over the rest of the fiscal year, Culver has a $300 million shortfall, and he’s already a quarter of the way through the year,” said Rep. Chris Rants, candidate for Governor from Sioux City.

“I would expect to see the Governor issue a 5% to 6% across the board cut in the next few weeks.  A smarter move would have been to reconvene the legislature to make selected cuts and whole eliminations.”

UPDATE: Steve Kettering, a banker from Lake View who is a Republican member of the Iowa Senate, issued a statement via Senate Republican staff.

DES MOINES – The nonpartisan Legislative Services Agency released new numbers today stating that yearly revenues were down 9.1% or $141.1 million compared to the same period last year.

Senate Republican Whip Steve Kettering (R-Lake View) released the following statement:

“While the new Iowa revenue numbers are low they are not unexpected.  Iowans know that there is less money in their pockets yet all they hear from the Governor is that everything is OK.  It’s time for the Governor to take a proactive approach to this deepening crisis.

“During the past legislative session, Republicans offered hundreds of millions of dollars in cuts while warning the Democrats of their overspending.  Now the chickens have come home to roost in the taxpayer barnyard.  Unfortunately Governor Culver and Legislative Democrats once again chose partisanship and party politics over the health of Iowa’s budget.  Governor Culver is again choosing not to lead by taking yet another wait and see approach to Iowa’s budget.

“Most Iowans have recognized and reacted to the changing economy while the Governor continues to wait for the REC to meet on October 7th.  Most experts believe the revenue estimates for the state’s tax receipts to be decreased or downgraded at that meeting.  That will leave the Governor no choice but to call for a special session or, more likely, issue a massive across the board reduction.  A reduction that could have been avoided had the Governor acted earlier in a more decisive manner by reducing state expenditures in his FY 2010 budget.

“Senate Republicans will continue to provide leadership by offering budget solutions that would reign in our state’s out of control spending.  Senate Republicans stand ready to work with the Governor in bringing fiscal responsibility back to the Capitol.”

UPDATE: The chairman of the Republican Party of Iowa issued a statement, via email.

Des Moines, IA – Republican Party of Iowa State Chairman Matt Strawn today challenged Governor Culver to finally take responsibility for the budget crisis facing Iowa and come clean with Iowans about our budget deficit.  Strawn said, “The days of hiding your budget mess are over, Governor.  Your failure to act earlier this summer means any coming spending cuts will have to be harsher and deeper than if you had been honest with Iowans from the beginning.”

This last July Governor Culver suggested a one-time accounting adjustment in gross sales tax receipts was evidence of economic recovery in Iowa and he credited, at least partially, his billion-dollar I-JOBS debt scheme for the beginnings of a turn around.  Most observers scoffed at the suggestion and pointed to a drop in net receipts of 6.1% as a clear warning that state spending would grossly exceed revenue in the coming year if no quick action were taken.

Now, two months later, the slide in state revenue continues.  According to the Legislative Services Agency (LSA), net receipts to state government for the first three months of fiscal year 2010 have declined by 9.1% as compared to one year ago.  Accounting for the fiscal shuffle Culver danced last week to “balance” the FY2009 state books, it appears Iowa state government is on course to run at least $300 million short this year.  This is in addition to the nearly one billion dollar hole projected for the next budget year.

“This year Governor Culver and his majority Democrats in the Iowa Legislature passed the single biggest budget in Iowa’s history–despite overwhelming evidence state revenue was still in a steep decline.  Well Governor, you can’t fool Iowans any longer and you can’t hide behind your phony budget tricks.  You spent too much, borrowed too much, and your refusal to aggressively act on the obvious warning signs is going to cost all Iowans dearly.

“Whether it will be deeper than necessary cuts in state services, higher property taxes that result from massive across the board cuts, or tax increases that the Governor and majority Democrats pass to close this gaping hole, no one will be spared the pain caused by Governor Culver’s continued mismanagement of our great state,” concluded Strawn.

The LSA report on Monthly General Fund Receipts through September 30, 2009 show revenue has declined in virtually every major category (personal income tax, -4.6%; sales/use tax, -0.2%; and corporate income tax, -27.5%) for the first three months of FY 2010.  Total net state receipts declined by 9.1%, or $141 million, for the first quarter compared to the same time period last year.

Democrats control the debate agenda in the Iowa Legislature because Democrats occupy a majority of seats in both the Iowa House and Senate.  None of the top Democrats issued a statement. Instead, the chair of the committee in the House that drafts the state budget issued a statement.  Republican legislators and a GOP gubernatorial candidate issued statements, too.  Read all below.

STATEMENT FROM HOUSE APPROPRIATIONS CHAIR JO OLDSON ON BALANCED 2009 BUDGET

“Despite these tough economic times, we’ve balanced the state budget without raising taxes and ended the 2009 Fiscal Year with healthy reserves. As we did last year, we will take any action necessary to keep the 2010 budget in balance and continue our work to find savings for 2011.  We know there are difficult decisions ahead, but our priority has been and will continue to be helping middle class families while keeping the state’s fiscal house in order.”

(DES MOINES)—House Republican Leader Kraig Paulsen (R-Hiawatha) released the following statement today in response to the governor dipping into the economic emergency fund to balance the 2009 budget:

“The governor’s actions today once again prove that Legislative Democrats and Gov. Culver were reckless with taxpayer dollars, spent too much money, and borrowed even more to cover their excessive spending.

“When the 2009 books closed, the governor came up short so he raided our savings account to balance the checkbook.  Not only is this kind of budgeting irresponsible, but it also puts Iowa’s economic future for fiscal year 2010 and 2011 in further turmoil.

“House Republicans remain committed to reining in out-of-control spending and protecting Iowa taxpayers.”

Rants: Tax Refunds Delayed to “Balance the Budget”

“Governor Culver isn’t telling Iowans that $30 million in tax refunds that should have been paid in July and August were delayed so that he could close the books and declare the budget balanced.  California at least had the courtesy to issue IOUs to taxpayers.  Iowa just kept their money,” said Rep. Chris Rants, candidate for Governor from Sioux City.

The Revenue Estimating Conference projected over $70 million in anticipated refunds.  Culver’s press release reports paying only $43.9 million in refunds.   The Dept of Revenue paid the missing $30 million in refunds starting on September 2nd after they stopped counting accruals.    An examination of past years practice shows that corporate tax refunds of $24M and $30M were paid in July and August during FY 08 and FY 09; while this year only $8.5 M was paid.  Yet in previous years $14M and $15M in refunds have been paid in September, while this year $44.6 M has been suddenly paid.

“There is no such thing as coincidence – not in electoral politics and budget gimmickry.  They held the refunds to make things look better.  That’s a dishonest way to balance the budget,” added Rants.

DES MOINES, IA – Senate Republican Whip Steve Kettering (R-Lake View) issued the following statement today regarding Governor Culver’s shifting of funds to pay for the largest budget in state history:

“During the legislative session, Governor Culver forgot about teachers and flood victims by choosing not to couple with federal income tax law. Apparently, the Governor forgot about them again today when he claimed he balanced the budget without raising taxes.”

“Iowans expect an open and honest budget done in broad daylight and not secret deals in back rooms to shift money around to balance the budget.”

“Iowans can expect Senate Republicans to continue to offer smart solutions to curb excessive spending, reduce the size of state government and provide accountability and transparency.”

GOVERNOR CULVER: FY2009 BUDGET BALANCED

DES MOINES – Governor Chet Culver announced today that the Iowa Department of Management has closed fiscal year 2009 with a balanced budget.

“The national economic recession has created challenges for state governments across the country, but we kept our word to the taxpayers of Iowa and ended a tough financial year with a balanced budget,” said Governor Culver. “We did it without raising taxes, like many states have done, and we did it without holding a special legislative session, like many critics said would be needed. We did it because, in good times and bad, we’ve managed the state’s finances.

Governor Culver added: “In spite of the economic challenges brought on by the world-wide recession, and a projected shortfall for the fiscal year 2011 budget, Iowa not only has a balanced budget for fiscal year 2009 but a budget surplus of well over $450 million for the current fiscal year.”

Based on revenue projections made by the Revenue Estimating Conference (REC) over the past year, Governor Culver directed a 1.5 percent across-the-board budget cut and took other measures totaling nearly $180 million throughout FY2009.

The following chart indicates the final differences in actual state revenue compared to the REC’s most recent estimates:

Categories Below Revenue Estimating Conference

• Gross Receipts $57.7 million
• Refunds $43.9 million
• Changes to SILO $31.3 million

Categories Above Revenue Estimating Conference

• Accrued Revenues (Net) $20.3 million
• General Fund transfers $8.3 million

In addition to the above figures, $12.4 million in reversions and $1.9 million in adjustments to standings contributed to the balanced budget.

Finally, the FY 2009 budget included a projected ending balance of $44.7 million.

Governor Culver today signed an Executive Order to authorize the transfer of $45.3 million from the state’s Emergency Fund. Under Iowa Code section 8.55, Iowa Governors have the authority to transfer up to $50 million to balance budgets at the end of the fiscal year.

“As Governor, I am going to take the steps necessary to balance the state budget without putting the burden on Iowa taxpayers,” added Governor Culver. “We cut state spending while holding the line on taxes last year, and I will take that same approach this year. We are not going to overreact or under react but will do what is necessary to maintain Iowa’s financial strength in the midst of this national economic recession.”

The next REC meeting is scheduled for October. 7.

NOTE: Below is a copy of Executive Order 18, signed today by Governor Culver

EXECUTIVE ORDER NUMBER 18

WHEREAS, the State Revenue Estimating Conference (REC) reduced its Fiscal Year 2009 net General Fund revenue estimate at the December 12, 2008, meeting by. 1.6 percent from $6.151 billion to $6.052 billion; and

WHEREAS, as a result of the December 12, 2008, REC meeting, I issued a uniform reduction, as required in Iowa Code section 8.31, of 1.5 percent, or $89.1 million, while also imposing additional expenditure reductions and recommendation on program eliminations to bring the State General Fund back into balance; and

WHEREAS, the REC, again, reduced its Fiscal Year 2009 net General Fund revenue estimate at its March 20, 2009, meeting, by 1.3 percent from $6.052 billion to $5.970 billion; and

WHEREAS, as a result of the March 20, 2009, REC meeting, I negotiated with the Iowa General Assembly and signed into law, a Fiscal Year 2009 General Fund budget that was balanced and had a positive ending balance; and

WHEREAS, since the March 20, 2009, REC meeting, as a direct result of the national recession, gross state revenues unexpectedly and precipitously declined in May and June – the last two months of Fiscal Year 2009 – by $77.6 million; and

WHEREAS, the Department of Management has informed me, as expected, that a transfer from the State’s Economic Emergency Fund established in Iowa Code section 8.55, would be necessary to balance the Fiscal Year 2009 State General Fund; and

NOW, THEREFORE, I, Chester J. Culver, Governor of the State of Iowa, by the power vested in me by the Constitution and laws of the State of Iowa, do hereby order the transfer of $45.3 million from the State Economic Emergency Fund to the State General Fund, as provided under Iowa Code section 8.55. The Department of Management shall take all necessary steps under Iowa law to effectuate these transactions. Actions taken by the Department of Management to implement this order shall commence on September 25, 2009.

But now, a statement from the Iowa Attorney General’s office counters that.

“It is the Attorney General’s responsibility to determine the State’s obligations and liabilities under the Film Tax Credit Program, and we are working on that intensively. The State’s obligations and liabilities may not be determined solely by whether a contract has been signed by the parties, and statements by State officials to that effect are mistaken,” reads the statement from the Attorney General’s office (emphasis added by me). “We understand the difficulties suspension of the program poses for companies doing business in Iowa, and we will weigh that carefully case by case as state officials determine how best to proceed.”

The Legislative Oversight Committee met this morning and during the first four minutes of the meeting, Representative Vicki Lensing (D-Iowa City) — the panel’s co-chair — made some comments about the film office scandal.  The committee won’t be opening an investigation today.  (The panel’s other co-chair, Senator Rich Olive (D-Story City), spoke with Radio Iowa earlier this week but said nothing during the opening of today’s meeting.)

Lensing actually began the meeting by advising the committee that a group of high schoolers might be along over the lunch hour to talk with them about state government.  Lensing said the “second issue I want to address” was the film office. After Lensing spoke for about a minute, Representative Ralph Watts (R-Adel), started to speak.  ”Is there nothing that we can discuss about that at this point in time?  Three employees have left,” Watts began  That sentence can barely be heard on the audio recording of the meeting because Watts forgot to turn his microphone on in order to be heard in the cavernous meeting room.

“Can’t hear you,” Senator Tom Courtney (D-Burlington), said from across the table.

“Use your microphone,” Lensing advised Watts.

Watts began speaking and by the sixth word in his next sentence, he’d switched on his microphone. “I know the attorney general is involved with that at this point in time.  But is there nothing that we could discuss at this point in time to…”

Lensing interjected: “We don’t really have any information yet. I think as the attorney general works through it and the auditor works through it, and the Department of Revenue, there will be things that we can, that they will be able to share with us and then questions that we will be able to ask.  We just can’t at this point in time.”

Watts continued. “Are we assuming, then, that the govenror will not reinstate any of the tax credit issues or reinstate that program until, I would hope that the legislative group would have some review of that before it’s reinstated,” Watts said.

Lensing responded: “You know, I can’t speak for the governor.”

Watts replied: “I understand.”

Lensing continued:  ”But I assume that he will also kind of be waiting anxiously to hear back from the different groups that are investigating this and, you know, and I think we will as a committee go ahead and proceed as we have in the past, you know, to ask those questions and see what we need to do or what things, you know, if there’s legislation that needs to be fixed as we’ve done with other issues, we will proceed in that fashion.”

Watts said: “Thank you.”

Lensing said: “All right.”

After that illuminating two-minutes-and-17-seconds [Download MP3 file], the meeting moved on to the next topic.  About an hour later, Watts issued the following written statement on the matter:

The following is a statement by Rep. Ralph Watts (R-Adel) in response to the Democratic leadership’s refusal to investigate the recent film tax credit scandal:

“The Oversight Committee has a history of looking into scandals such as Atalissa and CIETC and providing open and honest discussion for Iowans.

“The Legislature approved the film tax credit and has a responsibility to find out why the program has been mismanaged and abused.  Frankly, the only thing keeping that discussion from happening today is politics.”

Watts is the Ranking Member of the Government Oversight Committee.

Here is yesterday’s latter from Senate President Jack Kibbie (D-Emmetsburg) and House Speaker Pat Murphy (D-Dubuque) about the Oversight Committee and a film office investigation:

September 23, 2009
Dear Rep. Paulsen and Sen. McKinley:

In response to your September 21 letter, we are writing to assure you that we share the same goal: To provide the taxpayers of Iowa with an open and honest account of the actions of the Iowa Film Office and the Iowa Department of Economic Development.

For that reason, we echo our previous statements that it was proper for Governor Culver to announce plans yesterday to involve Attorney General Tom Miller, State Auditor David Vaudt and Department of Revenue officials to ensure that every fiscal and legal avenue is pursued against anyone who has abused this program.

At this time, however, we believe that it would be imprudent for the Oversight Committee to bring officials from the Department of Economic Development/Film Office, State Auditor’s office, Attorney General’s office or Department of Revenue before the committee because it could impede or interrupt this joint investigation. We are especially concerned about the effect of such testimony on any potential criminal proceedings in light of Chief Deputy Auditor Warren Jenkins’s statement that criminal charges against some individuals are possible.We will keep your request on file and we will encourage our Oversight Committee members to invite the appropriate officials to appear before the committee at the appropriate time.

Sincerely,
Representative Pat Murphy, House Speaker
Senate President Jack Kibbie, Senate President

Here is the list (some tax credits are included which have been repealed or replaced as the full report tracked back several years for comparison purposes):

Appendix: Description of Iowa’s Tax Credit Programs

1. Accelerated Career Education Program (ACE) (260G): This withholding credit is administered by Iowa’s Community Colleges and provides credits for employers that sponsor training slots at community colleges. Section 260G, Code of Iowa.
2. Agricultural Assets Transfer Tax Credit: This credit is awarded by the Iowa Agricultural Development Authority to taxpayers that lease agricultural assets to qualified beginning farmers. Section 175.37, Code of Iowa.
3. Assistive Device Tax Credit: This credit is awarded by the Iowa Department of Economic Development (DED) to taxpayers who make investments in assistive devices that allow for disability workplace accommodation. Section 422.11E, Code of Iowa.
4. Biodiesel Blended Fuel Tax Credit: This credit is available to retail dealers who sell biodiesel blended fuel equal to over 50 percent of their total diesel sales. Section 422.11P, Code of Iowa.
5. Charitable Conservation Contribution Tax Credit: This credit is available to taxpayers who make an unconditional charitable donation of a qualified real property interest located in the State of Iowa to a qualified organization exclusively for conservation purposes. Section 422.11V, Code of Iowa.
6. Child and Dependent Care Tax Credit: This credit is available to individual taxpayers who have eligible child and dependent care expenses. Section 422.12C, Code of Iowa. (Repealed) Cow-Calf Tax Credit: Eligible individual and corporation income taxpayers who operate cow-calf beef operations in Iowa are eligible for a cow-calf credit. This credit was repealed effective for any claims made on or after November 1, 2008. Section 422.120, Code of Iowa.
7. Disaster Recovery Housing Project Tax Credit: The credit is available to taxpayers investing in a qualifying disaster recovery housing project. The amount of the credit is equal to 75 percent of the qualifying investment. Section 16.191 through 16.192, Code of Iowa.
8. E85 Gasoline Promotion Tax Credit: An income tax credit, on a rate per gallon sold basis, is available to retail dealers of gasoline who sell E85 gasoline. Section 422.11O, Code of Iowa.
9. Early Childhood Development Tax Credit: The Early Childhood Development tax credit is equal to 25% of the first $1,000 of expenses paid for early childhood development expenses for each dependent from the ages of three to five. Section 422.12C(1A), Code of Iowa.
10. Earned Income Tax Credit: This credit is available to individual taxpayers who qualify for the federal earned income tax credit. The credit is equal to 7% of the federal earned income credit. Section 422.12B, Code of Iowa.
11. Economic Development Region Revolving Fund Tax Credit: This credit is awarded by DED and is equal to 20% of the contribution made to an economic development region revolving fund. Section 15E.232, Code of Iowa.
12. Endow Iowa Tax Credit: This credit is awarded by DED and is equal to 20% of a taxpayer’s endowment gift (up to $100,000 for a single taxpayer) to a qualified community foundation. Section 15E.305, Code of Iowa.
13. Enterprise Zone Program (EZ): This program, administered by DED, encourages investment in Iowa’s economically distressed areas by providing local and state tax credits, refunds and exemptions to qualifying companies that expand or locate in designated Enterprise Zones. Section 15E.191 through 15E.196, Code of Iowa.

(Replaced) Ethanol Blended Gasoline Tax Credit: A tax credit is available to service stations at which more than 60 percent of the total gasoline sold is ethanol blended gasoline. The credit is equal to two and a half cents for each gallon sold in excess of 60 percent. This credit was replaced in 2009 by the Ethanol Promotion Tax Credit.Section 422.11C (2), Code of Iowa.
14. Ethanol Promotion Tax Credit: This credit replaced the ethanol blended gasoline credit beginning in 2009. It is based on the amount of pure ethanol gallons sold. Section 422.11N, Code of Iowa. (SUSPENDED BY GOVERNOR, effective 9/18/09) 15. Film, Television, and Video Project Promotion Program: This program, administered by DED, provides a 25 percent tax credit for investments and a 25 percent tax credit for qualified expenditures in film projects produced in the State of Iowa. Section 15.391 through 15.393, Code of Iowa.
    (Replaced) High Quality Jobs Program (HQJP): This program, administered by DED, provides tax benefits to eligible companies that create high-paying jobs and make capital investments. The program was created in 2005 and replaced the New Jobs and Income Program (NJIP) and the New Capital Investment Program (NCIP) beginning in FY 2006. Section 15.326 through 15.337, Code of Iowa.
15. 16. Historic Preservation and Cultural and Entertainment District Tax Credit: This tax credit, administered by the Iowa Department of Cultural Affairs, provides a 25 percent tax credit for investments made in the rehabilitation of eligible historic properties. Section 404A, Code of Iowa.
16. Iowa Industrial New Jobs Training Program (260E): This program, administered by Iowa’s Community Colleges, assists businesses that are creating new positions with new employee training. Participating companies divert withholding taxes that would be remitted to the Department of Revenue to a community college to pay for training for company employees. Section 260E, Code of Iowa.
    (Replaced) New Capital Investment Program (NCIP): This program, administered by DED, was replaced by the High Quality Job Creation Program, beginning in FY 2006. Section 15.381 through 15.387, Code of Iowa. (Replaced) New Jobs and Income Program (NJIP): This program, administered by DED, was replaced by the High Quality Job Creation Program, beginning in FY 2006. Section 15.326 through 15.337, Code of Iowa.
17. Redevelopment Tax Credit: This credit is available to taxpayers that invest in redeveloping a brownfield or grayfield site. Section 15.291 and 15.293, Code of Iowa.
18. Renewable Energy Tax Credit: This credit is available for a producer or purchaser of energy from a renewable energy facility approved as eligible by the Iowa Utilities Board (IUB). The Department of Revenue determines the amount of the tax credits and issues tax credit certificates, which authorize credits to be claimed, to eligible applicants. Section 476C, Code of Iowa.
19. Research Activities Tax Credit: This credit is 6.5 percent of Iowa’s apportioned share of qualifying
expenditures for increasing research activities. The Iowa research credit is based on the federal research
activities credit, with the Iowa credit based on the ratio of Iowa research expenditures over total research
expenditures. Section 15.335, Code of Iowa.
20. School Tuition Organization Tax Credit: This credit, administered by IDR, is for 65% of the amount of a voluntary cash contribution made by a taxpayer to a school tuition organization. Section 422.11S, Code of Iowa. (Repealed) Soy-Based Cutting Tool Oil Tax Credit: A manufacturer is eligible to take a credit equal to the costs incurred for the purchase and replacement costs relating to the transition from using nonsoy-based cutting tool oil to using soy-based cutting tool oil. This program was repealed effective December 31, 2006. Section 422.11I, Code of Iowa. (Repealed) Soy-Based Transformer Fluid Tax Credit: Electric utilities may claim this credit, administered by IDR, for the costs incurred by the utility for the purchase and replacement costs relating to the transition from using non-soybased transformer fluid to using soy-based transformer fluid. This program was repealed effective December 31, 2008. Section 476D, Code of Iowa.
21. Targeted Jobs Tax Credit from Withholding: This pilot program, administered by DED and four pilot project cities, provides for a withholding credit equal to 3% of the gross wages paid by the employer to each employee under the withholding agreement. These funds are to be used by the pilot city for an urban renewal project related to the employer. Section 403.19A, Code of Iowa.
22. Tuition and Textbook Tax Credit: This credit is available to individual taxpayers who have one or more dependents attending grades K-12 in an Iowa school. The credit percentage is 25% of the first $1,000 paid for each dependent for tuition and textbooks. Section 422.12 (2), Code of Iowa.
23. Venture Capital Tax Credit – Iowa Fund of Funds: This contingent tax credit, administered by the Iowa Capital Investment Board (ICIB), is allowed for investments made into the Iowa fund of funds. The tax credit is only allowed to the extent that the actual rate of return on these investments does not meet the rate of return guaranteed to investors. Section 15E.61 through 15E.69, Code of Iowa.
24. Venture Capital Tax Credit – Qualified Business or Community-Based Seed Capital Fund: This credit, administered by ICIB, is 20 percent of the equity investment made into a qualifying business or communitybased seed capital fund. Section 15E.41 through 15E.46, Code of Iowa.
25. Venture Capital Tax Credit – Venture Capital Funds: This credit, administered by ICIB, is 6 percent of the equity investment made in a venture capital fund. Section 15E.51, Code of Iowa.
26. Wage-Benefit Tax Credit: This credit, administered by IDR, is based on creating new jobs with good wages and benefits. The credit is either 5 percent or 10 percent of wages (depending on total wages and benefits relative to county average wage) for up to five years, as long as the job is retained. Section 15I.1 though 15I.5, Code of Iowa.
27. Wind Energy Production Tax Credit: This credit is for electrical production facilities that produce electricity from wind and are approved as eligible by the local board of supervisors and the IUB. The Department of Revenue determines the amount of the tax credits and issues tax credit certificates, which authorize credits to be claimed, to eligible applicants. Section 476B, Code of Iowa

GOVERNOR CULVER APPOINTS FRED HUBBELL AS INTERIM DIRECTOR OF IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT

Joe O’Hern Appointed Interim Deputy Director at IDED

DES MOINES – Governor Chet Culver today announced that Fred S. Hubbell has agreed to serve as the interim director of the Iowa Department of Economic Development (IDED). Hubbell, of Des Moines, has led global companies as well as civic initiatives in Iowa. Because of previous commitments, he will begin the interim appointment on October 5.

In addition, Governor Culver announced that Joe O’Hern, deputy director at the Iowa Finance Authority (IFA), will serve as interim deputy director at IDED, focusing on IDED’s flood recovery efforts.

“The history of the Hubbell family runs parallel to the history of Iowa, and I am honored that someone with Fred’s experience, integrity and commitment to our state will serve in this key position,” said Governor Culver. “Fred’s leadership will help us ensure that proper oversight is in place for IDED programs. And he will play a vital role in our work to support business and job opportunities to help Iowa work our way out of the economic recession.”

“Economic development in Iowa is a critical engine for growth,” said Interim Director Hubbell. “I look forward to helping both Governor Culver and the department address this issue and focus on what IDED does well, which is creating and retaining jobs.”

Added Culver: “Joe O’Hern’s experience makes him an important addition to IDED. He will focus on making sure progress continues with our housing initiatives, the use of CDBG funding, and other initiatives critical to our flood recovery efforts.”

Hubbell has a long history of service to the people of Iowa. He was appointed to serve as chair of the Iowa Power Fund Board by Governor Culver in 2007, and will continue to serve on the board as the representative of IDED. In addition, Hubbell was appointed co-chair of the Iowa Disaster Collaborative, which raised millions of dollars on behalf of those affected by last year’s natural disasters.

Hubbell was a member of the Executive Board and Chairman of Insurance and Asset Management Americas for ING Group, a Netherlands-based banking, insurance and asset management company. Hubbell served as an Executive Board member from May 2000 through April 2006. He was also responsible for Nationale Nederlanden, ING’s largest Dutch insurance company, and ING’s asset management operations throughout Europe beginning in May 2004. Mr. Hubbell retired from ING Group’s Executive Board in April 2006.

Hubbell was formerly Chairman, President and Chief Executive Officer of Equitable of Iowa Companies, an insurance holding company, serving as Chairman from May 1993 to October 1997, and as President and Chief Executive Officer from May 1989 to October 1997. Hubbell served in various capacities with Equitable of Iowa Companies since 1983, in addition to serving as Chairman of Younker’s.

O’Hern is a graduate of Princeton University who spent more than 20 years drafting legislation in the Iowa legislature. President Bill Clinton nominated him to serve as the regional representative for the U.S. Department of Housing and Urban Development in Kansas City, KS. After a number of years at HUD, he took a newly created position as head of the Fannie Mae Partnership Office in Iowa, where he helped non-profit housing groups build more and better housing for low-income families. During his time at IFA, he was appointed to the Governor’s Rebuild Iowa Task Force to help coordinate efforts in rebuilding communities after the natural disasters of 2008.

Governor Chet Culver made a statement today at a news conference in Cedar Rapids which put film industry folks on notice: don’t blame the film office flap for your failure to pay your workers. Culver read his statement during a news conference in Cedar Rapids after he and a top FEMA administrator had toured flood recovery efforts. Culver advised the media throng he had a statement to read, then added to the rest of the crowd: “If people need to move to the next flood related event, they can.” That got a few chuckles, then Culver started reading. Read Culver’s statement below.

CEDAR RAPIDS – Governor Chet Culver made the following statement today about developments at the Iowa Film Office and the Iowa Department of Economic Development during a stop in Cedar Rapids:

“When information was first brought to my attention last week about Iowa’s film tax credit program, I was troubled. But as we began our investigation into this program, and more information has come to light, frankly, I am outraged – not only that a program involving millions of Iowa tax dollars was so mismanaged but that some companies were taking advantage of this situation.

“This problem first came to my attention last week when I was traveling on Tuesday with former director Tramontina. At that time, I asked him to prepare for me a memo outlining problems with the program. And, after receiving that memo, I took immediate steps to protect the taxpayers of Iowa.

“On Friday, I froze state funding for this program until all questions have been resolved and adequate oversight has been resumed. That same day, I accepted the resignation of the director of the Department of Economic Development.

“Yesterday, I asked Attorney General Miller and Auditor Vaudt to help review the film tax credit program and to provide advice and recommendations on how best to proceed with the program. At the same time, we have dismissed the manager of the film office and accepted the resignation of the deputy director of the Department of Economic Development.

“These actions are intended to protect the best interest of Iowans, and not to harm the growing film and television industry in our state. This program should continue only after we have the controls, oversight, and due diligence in place to assure that it operates properly.

“But, while there were clearly not the controls and oversight in place at the Iowa Film Office, we need to make sure that the film and TV productions in our state are following the rules.

“For example, projects must have commitments for at least 50% of their funding before even applying for assistance under the program.

“In addition, projects are not to receive tax credits until after their work is complete and they have submitted invoices of qualified expenses.

“And, we expect film and television productions to obey Iowa’s labor laws – which mean people get paid for the work they do. That does not mean they wait until after their tax credit has been approved.

“Iowans will not be taken for suckers. While we need to make changes to strengthen management of this program, we are not going to be taken advantage of – and if we are, we are going to claw back and make sure any money wrongfully provided is returned.

“Again, the actions I have taken are to protect the best interest of Iowans, not to harm the growing film and television industry in our state. I hope we move forward, but before we do we must assure that the film program has the oversight in place to assure that it operates properly.”

“Information brought to my attention in recent days regarding the Iowa film tax credit program has prompted me to take immediate steps to protect the taxpayers of Iowa.

“My first act was to freeze state funding for this program until all questions have been resolved and adequate oversight has been resumed. In addition to this temporary suspension of the program we have dismissed the manager of the film office, and accepted the resignation of the top two employees at the Department of Economic Development. Finally, I have asked Attorney General Miller and Auditor Vaudt to help review the film tax credit program and to provide advice and recommendations on how best to proceed with the program.

“My actions are intended to protect the best interest of Iowans, and not to harm the growing film and television industry in our state. This program should continue only after we have the controls, oversight, and due diligence in place to assure that it operates properly.”

DES MOINES – Governor Chet Culver announced today the departure of two officials from the Iowa Department of Economic Development (IDED).

The manager of the Iowa Film Office, Thomas Wheeler, has been dismissed from his position effective this afternoon. The Iowa Film Office is a division of IDED. Amy Johnson will serve as the interim manager of the Iowa Film Office.

In addition, the resignation of Vince Lintz as deputy director of IDED has been accepted.

IDED is currently reporting to Richard Oshlo, director of the Department of Management, while new leadership for the department is being considered.

Earlier today, Governor Culver asked the Attorney General, State Auditor and Department of Revenue to assist in a review of the Film, Television and Video Project Promotion Program. On Friday, Governor Culver accepted the resignation of IDED Director Mike Tramontina and asked the Economic Development Board to not approve further film tax credit certificates until questions about the administration of the program are answered.