Iowa House, Senate $484 million apart on spending targets

Republicans say they're being 'cautious and careful'; Democrats say they're focused on middle class

Legislative Republicans and Democrats in the split-control Iowa Legislature open their fiscal 2014 budget negotiations about $484 million apart on their proposed spending targets.

Majority House Republicans unveiled a budget proposal for the fiscal year that begins on July 1 that seeks to spend $6.414 billion from the state’s general fund. They say their 3 percent increase would be 98 percent of ongoing state revenue and would spend less than 90 percent of the $7.18 billion in available revenue in fiscal 2014.

Rep. Chuck Soderberg, R-LeMars, chairman of the House Appropriations Committee, said Republicans are being “very cautious and very careful” given that “there’s a great deal of uncertainty in the economy” and a lot of unanswered questions about federal funding levels, drought impact and slow economic growth.

For their part, Democrats who control the Iowa Senate are proposing fiscal 2014 spending targets just slightly under $6.9 billion. If approved, that would be a nearly 10 increase over current funding but remain $321 million below the state’s 99 percent spending limit.

“Iowans want Republican and Democratic legislators to focus our efforts on expanding Iowa’s middle class,” said Sen. Bob Dvorsky, D-Coralville, chairman of the Senate Appropriations Committee. “We will also deliver a balanced budget that is stable and sustainable.”

The Senate Democratic plan includes $50 million for commercial property tax relief and $55 million to increase the earned income tax credit for working poor families from 7 percent to 20 percent. The Senate plan also calls for increased state support for Iowa’s K-12 schools including a 4 percent boost in allowable growth, nearly $50 million in increased funding for colleges and other education programs, and a $68 million increase in Medicaid to expand access to affordable health care for thousands of Iowans.

The House GOP budget targets provide a 2 percent increase in allowable growth in per-pupil spending for K-12 schools, $10.25 million for education reform, $207 million to fully fund tax credits to local governments, and $16.1 million more for regent universities to allow them to freeze tuition.

Earlier this session, Branstad proposed spending nearly $6.54 billion from the state’s general fund in fiscal 2014 that would increase current funding by 4.3 percent beginning July 1. The proposed increases mainly would boost funding for education, human services, local property tax credits, corrections and economic growth initiatives – although the governor’s budget did not include any increase in state aid for K-12 school districts.

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