Government

Iowa Senate pushes $52 million in cuts

'Reckoning' more than governor sought but needed for year-end cushion

The Iowa State House chamber on Thur. Mar 11, 2016. (Rebecca F. Miller/The Gazette)
The Iowa State House chamber on Thur. Mar 11, 2016. (Rebecca F. Miller/The Gazette)

DES MOINES — Senate Republicans on Thursday proposed $52 million in spending cuts for the current fiscal year — $17 million more than recommended by the governor — that would mean further belt-tightening for state universities and community colleges, Iowa courts and economic development efforts.

Sen. Charles Schneider, R-West Des Moines, chairman of the Senate Appropriations Committee, said the midyear adjustments would not impact K-12 schools, Medicaid or public safety programs but would impact other budget areas in an effort for the state to end the fiscal year June 30 with a $35 million cushion in a $7.2 billion budget.

Shortly after the proposed adjustments were announced, State Court Administrator Todd Nuccio said the proposed $4.83 million cut to the judicial branch likely would leave “no other choice that to close courthouses and eliminate personnel branch-wide.”

He projected 30 county clerk offices would have to be closed indefinitely, and the caseload shifted to other offices.

Overall, the Senate GOP plan, which cleared the Appropriations Committee on a 13-8 party-line vote Thursday, would cut spending by $52 million and scoop $7 million in unobligated economic growth funds. It would supplement nearly $2 million in utility and indigent defense money and leave untouched any state benefits from the federal tax cuts.

“We want to make sure that we’re being fiscally responsible with taxpayer money,” said Schneider in discussing proposed cuts that go deeper than Gov. Kim Reynolds has recommended but are fairly close to levels advocated by majority Republicans in the Iowa House.

“We’re very close,” House Speaker Linda Upmeyer, R-Clear Lake, said of budget talks with Senate Republicans. “We’re probably going to cut a little more than the governor.”

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In her first state budget presentation last month, Reynolds proposed paring current-year funding by $34.7 million via a mix of cuts and adjustments to erase a projected shortfall created by state revenues growing at a slower rate than projected.

But legislative Republicans were looking at deeper spending cuts as they worked to balance the state ledger with five months left in the fiscal year.

“This is part of the process,” Reynolds said in an interview. “This is how it works. I put my budget forward. We looked at everything. We thought this was the most fiscally responsible budget so we could still honor some of the commitments and fund some of the initiatives.”

The governor sought to de-appropriate $19.4 million in selective cuts to various budget areas, while also making a $10 million adjustment in Medicaid spending and using about $11.2 million in revenue the state will gain when Iowans begin seeing lower federal wage withholdings in February that they will owe state tax on.

She proposes plowing any future state gain from the federal tax changes into lower individual state income tax rates, eliminating federal deductibility and simplifying Iowa’s complicated tax system.

By contrast, the Senate GOP de-appropriations bill called for cutting education by $27.3 million, human services (excluding Medicaid) by $11.77 million, justice systems (excluding the Iowa State Patrol and law enforcement training academy) by $7.7 million and economic development programs by $1.12 million.

Senate Democratic Leader Janet Petersen of Des Moines described the GOP cuts as “massive.”

The proposed $19.3 million cut to the regents’ universities equated to $8.7 million for the University of Iowa, $6.9 million for Iowa State University and $3.7 million for the University of Northern Iowa.

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In addition, $5.4 million would be cut in general aid to Iowa’s 15 community colleges and $1.7 million to the Iowa Department of Education.

“The real news today is the Republican budget crisis has gotten worse in the last three weeks,” said Sen. Joe Bolkcom, D-Iowa City, ranking member on the Senate Appropriations Committee. “When you have people who don’t like government running government, here’s what the results look like, and it’s not pretty.”

Senate Majority Leader Bill Dix, R-Shell Rock, said Senate Republicans for years had opposed state spending that outpaced growth that eventually would cause a day of budgetary reckoning — which has now arrived.

“This is what it looks like. We’re going to fix that,” Dix said. “We want to make sure that we do this as quickly as possible, the sooner the better. It gives everybody more time to find a way to accommodate the services that Iowans expect and do it in a manner that gives Iowans a better deal.”

Reynolds’ administration officials had warned state agency directors last fall that midyear budget adjustments could be needed, so many have prepared for the likelihood of making additional spending cuts, Upmeyer noted.

“We were expecting it to come so we were not naive to this,” said Debi Durham, director of the state Economic Development Authority.

“For the last six months we’ve been figuring out how we could adjust to a new normal,” Durham said. “They keep expecting us to do more with less, so I guess we’ll continue to deliver. We’ve been able to lean down the institution, and we’ll continue to do it but we’ll have to prioritize.”

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