This week was marked by more debate. Of particular note was HF 549, a bill to revise the arbitration process for school district employees. We debated this bill from roughly 4:30 PM until nearly 10:00 PM, and then took it up again the next morning, debating from 8:30 AM until after noon. The debate was loaded with rhetoric from the opposition, but in the end the bill passed the House. I will discuss this bill in more detail in my next newsletter.
Other Bills of Note
HJR - 8 deals with Article V Convention of the States. The United States Constitution provides a method for the states to come together to address an out-of-control federal government. HJR-8 is Iowa's application to Congress for a convention of states under Article V, joining many other states in this action. The resolution calls for this convention of states to propose an amendment to impose fiscal constraints on the federal government and limit their power and jurisdiction. This bill passed the Iowa House 54 to 43. I voted for the measure.
Our current budget year, 2015, is not turning out well. The budget passed in 2014 of $6.994 billion was based on a $6.998 billion revenue estimate. Unfortunately the economy is not performing as expected, especially the agriculture sector. Farmers are expected to lose up to 32% of their income over last year, largely due to corn prices. Actual revenue for July 1, 2014 to June 30, 2015 is now expected to be $6.767 billion, $227 million short of our appropriations. This shortfall will be taken from the “ending balance” that accumulated a few years ago when corn prices were higher. This reduction of $226 million along with a $120 million reduction that has been returned to the taxpayers as an income tax credit, and reductions resulting from paying off state debts incurred during the Culver administration, leaves the ending balance at $420 million.
This Thursday, March 19, the Revenue Estimating Conference met in the capitol to set their March estimate. The result was that the estimate was lowered by $19.1 million below the December estimate, compounding budget issues. We therefore have a revenue estimate of approximately $7.175 billion dollars, roughly $180 million more revenue than last year’s budget.
With the $6.994 billion budget from last year as a starting point, we must account for the following: nearly $165 million in increased Medicaid costs for the coming year, an additional $100 million in spending on K-12 education that we have committed to including this year’s 1.25% Supplemental State Aid and the Teacher Leadership Compensation funds committed to in 2013, and $133.7 million in already committed property tax relief. That totals $7.393 billion in needs against estimated revenue of $7.175 billion. That is $218 million short before we factor in any other needs such as requested increases for the Regents schools, funding a broadband initiative, or increasing hospital and other health care provider rates. In other words, funding levels for the current year will need to be cut for the coming year in many other programs.
Please rest assured that the House Republicans will stick to our budget principles that we have relied on these previous four years of sound fiscal management. We will not spend more than the state collects, we will not use one-time money to fund on-going needs, we will not balance the budget by intentionally underfunding programs, and we will return unused tax dollars to Iowa’s taxpayers.
As always, feel free to contact me at email@example.com with your thoughts and concerns about our state government.