Here’s what’s in Iowa’s $8.5 billion budget for the coming fiscal year

DES MOINES — Iowa lawmakers sent the last of Iowa’s 2024 budget bills to Gov. Kim Reynolds’ desk for approval on Thursday, directing billions of dollars to departments and operations across the state.

The general fund budget totaled $8.5 billion for the fiscal year starting July 1, a 3.7 percent increase over this year’s budget. More than $1 billion will be appropriated from other funds.

According to an analysis from the nonpartisan Legislative Services Agency, the expected state surplus after the 2023-24 budget year will be more than $2 billion.

Reynolds still needs to sign the bills before they become law, and she has authority to strike individual budget lines.

Here is a rundown on the budget. The top-line dollar amount represents spending from the state general fund and does not include other funds.

K-12 Schools & Standings: $4.4 billion

Funding for Iowa’s K-12 schools represents the bulk of this appropriation. Schools will see a 3 percent increase in per-pupil funding, or about $107 million more than this fiscal year.

Iowa’s nine Area Education Agencies, which provide special education services to Iowa students in public and private schools, would see a nearly $30 million decrease in the upcoming fiscal year..

However, Rep. Taylor Collins, R-Mediapolis, said all but one Area Education Agency in the state will still receive more money than last year, thanks to the 3 percent increase in state supplemental aid to public schools. The Mississippi Bend AEA will see a $32,000 reduction.

Democrats argue Republicans are intentionally underfunding education in Iowa, noting the state has a nearly $2 billion general fund budget surplus, full cash reserves and a Taxpayer Relief Fund projected to total nearly $3.4 billion by the end of next fiscal year.

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“We have the money. We don’t have the will,” said Rep. Beth Wessel-Kroeschell, D-Ames. “This is a hoarding problem. We are stockpiling taxpayer dollars.

“There are a lot of ways we can give it back to the taxpayers through quality services, a high-quality public education, public safety, clean water infrastructure, higher education, mental health and substance abuse services.”

Economic Development: $41.8 million

This budget supports economic and workforce development efforts in the state, including funding for the Iowa Economic Development Authority, Iowa Workforce Development and Iowa Finance Authority, among other agencies.

It includes an increase of $125,000 to the World Food Prize; a new $1.4 million for the administration of the Iowa Arts Council; and a $215,000 increase in the rent subsidy program administered by the Iowa Finance Authority.

Education & Higher Education: $982.9 million

The budget funds the state’s education system, including the Department of Education, Iowa’s public universities and Department of the Blind, among other agencies.

It includes a combined $7.1 million more for specific programs across Iowa’s three public universities — a fraction of the $32 million increase in general fund dollars the Board of Regents sought.

The UI College of Nursing would get an additional $2.8 million to hire more staff.

Iowa State University would get an extra $2.8 million to support its agriculture innovation and science, technology, engineering and mathematics programs by expanding degree and certificate programs in the high-demand professions.

The University of Northern Iowa would get an additional $1.5 million to recruit students interested in becoming teachers, including a stipend for student teachers.

The bill also bars Iowa’s regents universities from new spending on diversity, equity and inclusion programs and training, including new hires. It also requires the state Board of Regents to review of its campuses’ current DEI programming.

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Rep. Carter Nordman, R-Panora, and chairman of the House education budget subcommittee, said lawmakers “want to get to the bottom of where these resources are being spent — good, bad or indifferent.”

Judicial system: $212.5 million

The bill would raise the pay of private attorneys who agree to represent indigent defendants by $5 an hour and provide $35 an hour for travel time, plus mileage, as some attorneys spend hours driving around Iowa to court hearings.

Iowa Supreme Court Chief Justice Susan Christensen, in her annual Condition of the Judiciary address in January, told lawmakers the indigent defense systems was “on the verge of snapping.”

Democrats criticized Republicans for removing more than $1 million in funding to hire four new district associate judges to address the state’s backlog of cases.

“Everyone in this room knows what the right thing to do is, and yet we don’t seem to be able to do it,” Rep. Ken Croken, D-Davenport, said.

Rep. Brian Lohse, R-Bondurant and chairman of the justice system appropriations subcommittee, said, “It is what it is.”

“We won what we could win (in negotiations with the governor’s office and Senate), and we survive to live another day,” Lohse said. “We will continue to work and fight for the resources that the judicial branch needs in order to provide justice to Iowans.”

Justice System: $669.2 million

The budget funds the Iowa Attorney General’s Office and state departments like corrections, the Iowa National Guard, Iowa State Patrol, and Department of Inspections, Appeals and Licensing. It includes a $1.25 million increase for the Iowa Attorney General’s Office to hire 11 new full-time positions.

The budget adds $1.1 million for salaries and bonuses for Department of Corrections officers and $650,000 for the State Public Defender’s Office to hire seven additional full-time positions.

Democrats argued the Corrections increase was not enough to address understaffing and improve working conditions for correctional officers in the wake of the killings of an Anamosa correctional officer and a nurse in 2021.

Lawmakers punted on deciding how to spend $345 million over the next 18 years resulting from settlements with pharmaceutical companies, distributors, pharmacies and others over the nation’s opioid crisis. The Iowa Opioid Settlement Fund currently contains about $20 million.

Lohse said lawmakers plan to work this summer on a holistic approach for how best to use the settlement funds for prevention, harm reduction, treatment and recovery services.

Health and Human Services — $2.1 billion

The new budget includes a $13 million increase in Medicaid reimbursement for mental health services and $15 million to nursing homes.

The budget includes a new family medicine obstetrics fellowship program, directing $560,000 to fund fellowships in rural or underserved areas. It also will direct $1 million to the More Options for Maternal Support program, which funds crisis pregnancy centers that provide pregnancy support and discourage abortion.

Those items were part of Gov. Kim Reynolds’ proposed maternal health care bill, which did not see passage, but portions of the bill made it into the HHS budget.

Democrats said the budget does not go far enough to fund Iowa’s biggest health needs, like child care assistance and mental health.

Democrats proposed spending $5.6 million to extend coverage of postpartum care under Medicaid from 60 days to 12 months. Iowa is one of only a handful of states that has not expanded that coverage under a provision in the 2021 American Rescue Plan Act.

Republican lawmakers have said they may consider expanding the coverage next year.

Administration and Regulations: $135.2 million

This budget funds state departments like the Department of Administrative Services and the Department of Inspections, Appeals and Licensing. It also sets the budget for elected offices like the governor, secretary of state and state auditor.

The bill would increase the governor’s budget by $494,000 while maintaining the number of employees in her office. A spokesperson for Reynolds said the funds would be used to recruit and retain staff to the office, noting that the governor’s office budget has not changed in a decade.

But Democrats protested the increase, arguing there was not enough explanation of what the money will be spent on.

The bill also increases funding by $1.4 million to the Iowa Utilities Board, which handles permitting and regulation of utilities in the state. The money will fund five new full-time employees to increase technical support.

Agriculture and Natural Resources: $43.5 million

This budget funds the Department of Agriculture and Land Stewardship, the Department of Natural Resources, and related state initiatives.

The bill transfers $500,000 from Iowa State University’s Nutrient Research Fund into the Ag Department’s Water Quality Initiative Fund. The transfer could put at risk the network of sensors that measure nitrogen and phosphorus levels in Iowa waterways.

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While some Democrats protested, Sen. Dan Zumbach, R-Ryan, said the focus on improving land practices would make a bigger impact on water quality.

“When we made the decision on how to appropriate dollars, it was all about let’s put practices that help clean our water,” he said.

The budget also strikes a provision from Iowa law that requires at least 10 percent of Iowa land area be protected, public open space by 2000. Despite the requirement, only about 3 percent of Iowa’s land is publicly owned, according to Summit Post, an outdoors website

Supporters of the change said the DNR should focus on maintaining the land it already owns, and that it would decrease costs for Iowans to purchase land.

But Democrat Sami Scheetz of Cedar Rapids said public spaces are “critically important” to attracting people to the state and improving quality of life.

Rebuild Iowa Infrastructure Fund: $181.2 million

This budget funds building maintenance and infrastructure improvements using gambling revenues in the Rebuild Iowa Infrastructure Fund as well as money from the Technology Reinvestment Fund.

The budget includes an extra $5 million, one-time appropriation to the Renewable Fuel Infrastructure Fund, which helps gas stations convert equipment to offer renewable fuels.

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It also directs $6 million to improve Honey Creek resort, a state-owned resort on Rathbun Lake in south-central Iowa that Rep. Jacob Bossman, R-Sioux City, said has “fallen into disrepair.”

“This is a responsible place to find that money to get Honey Creek back up to standards and make it an operational facility again,” he said.

Transportation: $446.5 million

The transportation budget funds the Department of Transportation and other transportation operations out of state road-use tax fun