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PMCI Annual Meeting: State Budget Challenges Put Spotlight on Tax Credits, Expenditures

 

Iowa Office of Management’s Dave Roederer and Iowa Representative Pat Grassley presented the many challenges facing Iowa with respect to budget in their presentations at the Annual Meeting.

Roederer reviewed the dozens of factors considered in estimating revenues for the State. He then presented recent data from those factors and the trends in the data. While he moved through each data presentation quickly, a few data trends stood out:

  • 54% of state budget revenue is from individuals, 33% sales tax, 7% corporate and 6% other.
  • 56% of the state’s expenditures are on education, 25% on health and human services, 9% justice, and 10% other.
  • 70% of agriculture is exported – Trade agreements on the federal level will have an impact on our state’s economy
  • 42% of employers have less than 50 employees, while 16% have greater than 500.
  • 72% of businesses are non-farming; however, they can be tied to it.  For instance, 22% of manufacturing is tied to agriculture.
  • Federal decision-making impacts Iowa’s budget.  For example, the farm bill provides $2.7 billion in revenue.  There are 120-130 items to review in the new Federal tax package that will impact the state’s budget.
  • Sales tax revenue is down in rural counties due to online sales.  While sales tax should be remitted on those items with tax returns, it is rarely done.
  • Diesel consumption is up based on reports for the Department of Revenue.  More diesel use is correlated with more product being shipped out of the state.

Roederer was followed by Representative Grassley. Grassley opened by stating that Medicaid is the biggest concern when it comes to the state budget. Costs are rapidly rising. If 38 other states have implemented a managed care system that works, he believes Iowa can too. 

Grassley then discussed tax credits.  He stressed that, when it comes to tax credits, he believes it is his job to "look under every rock."  He admitted this approach might not be popular, but he strongly believes that every tax credit should be scrutinized, even renewable fuel tax credits. Referring to the tax credit bill he introduced in 2017, he noted that it was fairly aggressive and may not be the bill for the future. He also commented that no decision has been made on what will be done with his bill from last year. Whatever does happen, he believes it will take at least three years to unwind what is in place with taxes in general.

In addition to these state leader insights, PMCI leaders shared the state of the association with members. PMCI Chair Jason McDermott recognized Board members for their contributions to a successful year. He touted some of the accomplishments over the past, including the addition of 29 members, a strong member retention rate in a year where the Board made the difficult decision to raise dues, and our improved member outreach.  He also highlighted our advocacy wins, such as the statewide preemption bill, maintaining the refundable income tax credits for marketing biodiesel, and funding the infrastructure grants our member receive for installing renewable fuel compatible equipment.

PMCI Treasurer Steve Kimmes review PMCI’s financial position.  Trust Chair Bryan Bandstra and RINAlliance Chair John Gilroy presented the key accomplishments and strong financial positions of their respective organizations.  LMC and EMC representatives highlighted some of the free assessments and guidance provided to participants in the PMCI Safety Insurance Program, and shared that they anticipate this year to be a record-breaker with respect to the safety dividend.

Industry leaders were also recognized for their contributions.  PMCI President & CEO Dawn Carlson recognized Jason McDermott of McDermott Oil for his selfless service as chair of the PMI Board.  Under his leadership, PMCI has made important improvements in its operations and has taken on his challenge to know our members better. Through his actions and commitment, Jason demonstrated an earnest desire to ensure the PMCI continues to be led by a board committed to the cause and committed to the success of its members.

Iowa Secretary of Agriculture Bill Northey announced that PMCI members Kwik Trip, Inc. the Iowa 80 Truckstop in Walcott are the 2018 winners of the Secretary’s Ethanol and Biodiesel Marketing Awards, respectively.

Kwik Trip, Inc. currently has 25 locations in the state of Iowa selling E15 and 25 locations selling E85.  Kwik Trip, Inc. began its commitment to marketing high ethanol blends in 2003 when they began marketing E85.

Iowa 80 Truckstop has offered biodiesel since 2002, which makes this the 15th anniversary of their program. The company received an Iowa Renewable Fuels Infrastructure Program grant to install the necessary equipment to offer biodiesel, and the truck stop now offers between B11 and B20 blends throughout the year.

The meeting concluded with PMCI’s legislative briefing, highlighting the association’s legislative priorities for 2018:  fuel tax credits, motor fuel labeling, the UST program and the bottle bill.

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