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Representative Ro Foege
Report from the Iowa Legislature
January 27, 2002
Iowa Venture Capital
Working to ensure a brighter future for every Iowan, a Venture Capital bill was passed in the Iowa House last week. One of the top goals of the Democrats in the Iowa House is economic security now and growth for the future. We want to help new businesses get started and grow, since that is where most new jobs are created. We especially need to encourage the development of high tech, innovative businesses. Iowa needs sources of venture capital to help Iowa entrepreneurs start up these new businesses.
The Venture Capital bill, passed with broad bipartisan support (90-3), will create a “fund of funds,” which will seek private investment by offering state incentives. The bill is modeled after a successful venture capital program in the State of Oklahoma.
One problem we are addressing is that Iowa entrepreneurs have trouble attracting the attention of the venture capital fund managers, who are located primarily on the east and west coasts. This bill will require that three new venture capital fund offices actually open in Iowa. In this way, we will provide Iowans an opportunity to sell their ideas to those who have the money to help them get started.
This bill, by itself, will not provide all the tools that are needed to help Iowa businesses start up, grow and expand. But it is one piece out of many that are necessary to help provide growth for Iowa’s future.
Another problem that the legislature will need to address is the Medicaid shortfall. Due to the economic downturn, which resulted in more Iowans being eligible for services under the Medicaid program, together with the 4.3% across the board budget cut ordered by Governor Vilsack to maintain a balanced budget, the Medicaid program is experiencing a $18.6 million shortfall. Because of the increased enrollment, DHS is currently projecting a shortfall of an additional $30 million in the Medicaid budget for the remained of fiscal year 2002.
Medicaid is a program of health assistance for individuals of low income, which is funded with both federal and state dollars. It is difficult to cut the Medicaid budget, because the federal government mandates many of the program requirements. If an individual meets certain eligibility criteria, they must receive the necessary services at the time of need. They cannot be put on a waiting list for the services, as we sometimes have to do with other programs. And, because Iowa has a large aging population, the state is experiencing a constantly increasing need for the services provided through Medicaid. Some of the providers of these services include nursing homes, hospitals, physicians, pharmacists, dentists, optometrists, chiropractors, ambulance, and physical therapists.
As a member of the Iowa House Medicaid Task Force, I am working to solve this problem, which is nearing crisis proportions. Our choices are difficult. The governor proposed “back-filling” the Medicaid deficit by using a combination of dollars from the Senior Living Trust Fund, the Tobacco Fund and the Vehicle Depreciation fund. Republican leaders rejected this proposal. So, that left us with the choice of cutting much-needed services provided through Medicaid or cutting the reimbursement to providers of the services by 13.2%. Neither of these is an acceptable solution!
As we struggle with our problem in Iowa, we keep an eye on Washington where there is hope that the Economic Stimulus package being debated in Congress will provide some relief to our Medicaid problem. As we probed this potential solution to Iowa’s economic woes, we learned that the so-called economic stimulus package will actually result in a $60 million loss to the State of Iowa! Thankfully, Senator Harkin has a proposal that would result in little or no loss to Iowa and other small population states. As a member of the task force, I will be requesting that we contact the Iowa Congressional delegation on a bipartisan basis, in hopes they will be responsive to our very serious Medicaid problem.
The people of Iowa deserve access to quality medical care. In partnership with our congressional delegation, we will continue to work toward sensible solutions.
You can write me at the State Capitol, Des Moines, IA 50319; call 515/281-3221 or e-mail me at
ro.foege@legis.state.ia.us.
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