Iowa House Republicans set $8.58 billion budget target

DES MOINES — Iowa House Republicans are proposing spending $8.58 billion in the upcoming budget year, an increase of about 4.5 percent from the current year, House Speaker Pat Grassley said Thursday.

The proposal is about $90 million more than proposed by Gov. Kim Reynolds and Republican Senate leaders.

Two bills already signed into law — adjusting an erroneous property tax formula and setting a 3 percent increase in state funding to K-12 schools — pushed the budget goal above Reynolds’ target, and Grassley said House Republicans want to spend another $50 million on other priorities.

“We have other priorities that we would like to have conversations within the caucus, like mental health, ‘rebasing’ for nursing homes (reimbursement rates) and workforce issues,“ he said. " … So we wanted to make sure that those are all reflected, some of the priorities that are still out there, within our budget."

The state revenue panel estimated in recent meetings that Iowa would bring in roughly $9.65 billion in the next budget year. By state law, lawmakers can’t spend more than 99 percent of that estimate.

Republicans have consistently spent less than that 99 percent in the past several years, and Grassley said the budget proposal reflects Republican goals of spending about 89 percent of projected revenue.

“(That) maintains that principle that we’ve had of not using one-time money in the budget, as well as using ongoing revenue to calculate our budget,” he said.

House Republicans also are working on a bill to reduce property taxes, but Grassley said any hit to the state budget from that bill would be covered by the taxpayer relief fund, which is expected to have a balance of about $2.7 billion next year.

Senate leaders last week announced a budget target of nearly $8.49 billion, matching Reynolds’ budget target from January.

“This budget target ensures the tax cuts implemented last year are sustainable,” Senate Majority Leader Jack Whitver said last week. “Iowa has increased funding for K-12 schools every year, it has an ongoing surplus, and income taxes are falling every year for Iowans, including the elimination of the tax on retirement income this year.”

Neither party has announced a line-by-line breakdown of their proposed budgets, and lawmakers will be working separately to come up with budget goals for the state’s departments and services.

Timi Brown-Powers, D-Waterloo, the House Appropriations Committee ranking member, criticized some of the budget priorities of the Republican leadership, saying the party was putting “politics over people.”

She pointed to last year’s tax cuts, which resulted in a lower corporate tax rate, as well as a law this year directing $107 million to private school Education Savings Accounts, which is expected to grow to $345 million over four years.

“As we are looking at this, I am wondering, where (is) the money for mental health, where (is) the money for the things that people are needing at this point?” she said. “That really has to be the focus.”

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