Democrats: Budget stretched to fund priorities

By James Q. Lynch 

The Gazette

DES MOINES -- Republicans are warning there will be “pink slips and property tax increases” as a result of majority Democrats underfunding K-12 education by $167 million in the 2011 budget.

However, Democrats say the catch-all “standings” bill, typically the last bill lawmakers approve before adjourning for the year, affirms their commitment to the state's priorities during tough economics times.

“The good news here is that we're still committed to education, we're still committed to keeping our communities safe,” House Appropriations Committee Chairwoman Jo Oldson, D-Des Moines. “We've stretched ourselves as far as we can.”

That stretch leaves K-12 “seriously” underfunded by $167 million, according to Rep. Scott Raecker of Urbandale, the ranking Republican on Appropriations. It troubles him it relies on $657 million in one-time money and creates a huge budget gap for lawmakers to bridge when they come back in January 2011.

“Still, it's not as bad as it could have been,” he said about the 56-page all-encompassing standings bill. “There's no gambling policy in it now. There are no controversial labor pieces. Relative to the past several years, including when Republicans were in control, it's relatively small.”

The budget isn't what Democrats would like, Oldson said, but doesn't necessarily mean local school districts will have to lay off teachers and raise property taxes.

“School boards will have to make those decisions,” she said. “Times are tough. We had to make tough decisions and local governments will have to make tough decisions, too.”

 Lawmakers were faced with a $1.1 million budget gap at the beginning of the session. HSB 741 calls for narrowing that to $1 billion going into next year by using one-time money, such as $252 million from cash reserves and federal stimulus money. The cash reserve funds will cover $187 million for Medicaid, $54.7 million for property tax credits and $10.6 million for FEMA matching funds.

“I'm very thankful for that one-time money,” Oldson said. “That's what it's there for – for situations like this.”

Raecker estimated a 20 percent increase in state revenues will be needed to close that gap next year. Oldson doesn't see that, but said it appears revenue numbers are starting to head in the right direction.

The appropriations bill, as usual, includes several policy changes, including a “bicycle bill of rights” that never gained enough riders to pedal its way onto the House floor.

The House version of SF 117, which the Senate approved last year, would prohibit a motor vehicle operator from steering “unreasonably” close toward a bicyclist on a highway. Neither should anyone “knowingly project” any object or substance at a bicyclist on a highway. Violation of the law would be a simple misdemeanor punishable by a fine of $250.

The bill:

Does not include funds for an $87 million salary bill, which could result in cuts in various departments as well as state employees being ordered to take more furlough days, Raecker said. It's unknown how many days will be required to absorb that $87 million shortfall.

Includes a measure favored by Cedar Rapids and Linn County to allow local governments to increase hotel-motel taxes. Currently, a city or county can impose a hotel-motel tax of no more than 7 percent. The standings bill allows the tax to increase to 9 percent for cities and from 7 percent to 8 percent for counties. If the tax is 8 percent, the county can levy 1 percent on both incorporated and unincorporated areas.

Absolves the Crandic Railroad of liability for damages caused by alterations to its track in Coralville behind the Heartland Inn and Wig & Pen. With I-JOBS funds, the track is being raised four feet to provide greater flood protection.